If you have any financial interest in offshore bank accounts, or if you have signatory authority on any foreign bank accounts, you are required to file a Report of Foreign Bank and Financial Accounts (FBAR). You must file this form for bank accounts, brokerage accounts, mutual funds, and most other types of foreign accounts. The annual filing date for FBARs is April 15, and the maximum extension of the filing deadline is six-months, according to the IRS.
Determining if you must file FBARs, and how to file FBARs, can be complicated. A Washington DC international tax attorney can provide assistance with the filing process so you can comply with legal requirements. A failure to file FBARs could have serious consequences, including substantial penalties for each year that this form is not filed.
What You Need to Know
An FBAR is filed separately from a federal tax return and is filed directly with the Financial Crimes Enforcement Network. The form that you must use to file is the FinCEN Form 144, also called form TD F 90-22.1.
If you are an individual who is filing an FBAR for yourself (as opposed to situations where a tax professional files an FBAR on behalf of a client), you can use the BSA E-Filing System to complete and file your form. You can visit the BSA website to find the appropriate form here: http://bsaefiling.fincen.treas.gov/NoRegFilePDFIndividualFBAR.html.
When you visit the website, you can click on the link to Prepare FBAR. The form should download to your computer. You must have the newest version of Adobe Reader. If you do not have the correct Adobe software, you will get a “Please Wait” message stating: “If this message is not eventually replaced by the proper contents of the document, your PDF viewer may not be able to display this type of document.” There will also be instructions and a link to the PDF viewer you need to use.
If your form opens correctly, you will see fields that you must fill out. You must complete each section of the form, providing updated and accurate information about the type of account, the financial institution, and the value of the offshore account. You also must electronically sign the form that you are going to submit online. Be sure to save your information as you complete the PDF form.
Once you have filled out the PDF form completely, it can be submitted at the same website that you originally downloaded it from. The BSA website has a second link below the one that you clicked on to obtain the PDF. This link allows you to “Submit FBAR.”
When you click Submit FBAR, you must input your email address, your first name, your last name and your telephone number. You will update the PDF version of your Individual FBAR that you completed and then must click Submit.
It is vitally important that you complete this process for all offshore accounts and that you file this form before the deadline. DC international tax attorney Kevin Thorn can provide you with assistance if you have any questions about FBAR forms. An attorney can also help if you were supposed to file FBARs in the past and failed to do so. You could be at risk of large penalties if your prior failures to file are discovered, so contact an experienced attorney as soon as possible to find out what you can do to minimize the potential for financial loss.