FBAR Reporting: A Simple Guide to FinCEN 114

The IRS requires certain U.S. Persons to file an annual FBAR (Foreign Bank and Financial Account Reporting aka FinCEN 114) each year to meet their FBAR Reporting obligations. The failure to file may result in excessive fines and penalties.

When a person has foreign accounts, they may have an FBAR Reporting requirements. These FBAR requirements require the annual filing of FinCEN 114 forms each year with the IRS to report foreign accounts (aka foreign bank and financial accounts located outside the United States).

What Is the FBAR Reporting Requirement?

The FBAR Reporting Requirement is relative low. The form is required for each year that a person (individual, estate, trust or entity) has more than $10,000 in annual aggregate total in foreign accounts.

What Is Considered a Foreign Account?

The foreign account requirement is very broad. It includes many different types of foreign financial accounts, including:

• Foreign
Bank Account
• Foreign Investment Account
• Foreign Pension Account
• ETF and Mutual Fund Accounts
• Stock Accounts
• Foreign Life Insurance

What Is Reported on the FBAR

In addition to the filers personal information (name, address, social security number of ITIN), the filer has to identify the foreign accounts. For each account, the filer includes:

• Name of the Foreign Financial Institution
• Address
• Account Number
• Maximum Balance.

Do I Still FBAR Report if I am Missing Information?

Yes. Even if you do not have all the required information, you are required to make a reasonable and diligent disclosure.

The form has a separate box available to filers who have unknown Maximum Balances.

What if I have More than 25 Accounts?

If you have more than 25 accounts, you may have to create your own spreadsheet form and keep the form for your records, in case of an IRS audit or examination.

Are You Out of Offshore Compliance?

If you are out of compliance, you should speak with an Attorney before making any affirmative representations or statements to the IRS.

Different Options for Amnesty

At the current time, there are 4 main options for IRS Foreign Amnesty/Voluntary Disclosure:

• IRM (Internal Revenue Manual) Voluntary Disclosure
• Streamlined Domestic Offshore Procedures
• Streamline Foreign Offshore Procedures
• Reasonable Cause/Delinquency Filings

Speak with Experienced Counsel

IRS Voluntary Disclosure law is a specialty. It is important that you speak with an experienced State Bar Board Certified Tax Law Specialist. In IRS offshore disclosure, experienced tax attorneys will generally have 20-years of attorney experience.

ABOUT THE AUTHOR: Golding & Golding
Our Managing Partner, Sean M. Golding, is a 20-year Attorney and Board-Certified Tax Law Specialist (a distinction earned by less than 1% of attorneys nationwide). His team specializes exclusively in IRS Offshore & Voluntary Disclosure matters. They have assisted thousands of clients nationwide and across the globe.

Copyright Golding & Golding, Attorneys at Law

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and.how they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.

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