The IRS is reminding owners of foreign bank and financial accounts that the deadline for filing a 2021 Report of Foreign Bank and Financial Accounts (FBAR) is April 18, 2022. The IRS has also issued a fact sheet containing information to help U.S. individuals file their FBARs.
Who needs to file an FBAR? The Bank Secrecy Act (BSA) requires U.S. persons to file a FBAR if they have:
- A financial interest in or certain authority over one or more financial accounts (such as a bank, brokerage or investment account) in a foreign country, and
- The aggregate value of all the U.S. person’s foreign financial accounts exceeds $10,000 at any time during the calendar year.
A U.S. person is a U.S. citizen (including a U.S. citizen living outside the U.S.) or resident alien or any domestic entity such as a partnership, corporation, limited-liability company, estate or trust.
Generally, an account at a financial institution located outside the U.S. is a foreign financial account.
Note. Whether the foreign account produced taxable income has no effect on whether the account is a foreign financial account for FBAR purposes.
Taxpayers who need additional time to file their FBAR will get an automatic extension to October 15 to file.
Failure to file an FBAR. U.S. persons who don’t file a required FBAR may be subject to significant civil and criminal penalties. However, the IRS won’t impose penalties on U.S. persons who properly report a foreign account on a late-filed FBAR if the FBAR was filed late due to reasonable cause.Posted on