FBAR stands for Report of Foreign Bank and Financial Account. It is one of the most important forms that offshore accountholders must file with the Financial Crimes Enforcement Network. It must be filed in order to avoid very substantial financial losses. Civil penalties imposed for failure to file FBARs have, in some cases, exceeded the value of offshore account balances. There is also the potential for criminal charges for failure to file.
It is important to know what an FBAR is, when you must file one, and how you can file this important form. A Washington DC tax law firm can provide you with help filing your form and can discuss your legal options if you were supposed to file a form in the past and failed to do so.
Why is an FBAR Required?
The FBAR form is FinCEN Form 114. FinCEN is short for Financial Crimes Enforcement Network. Financial Crimes Enforcement Network requires that an FBAR be completed by any United States person who has a financial interest in any foreign financial accounts if the aggregate value of any and all accounts is more than $10,000 at any time during the course of a calendar year. This means if you have one or more accounts and the total balance in any or all of the accounts combined exceeds $10,000 even once in the year, you have to file an FBAR. You are also required to file an FBAR if you have signature authority over any foreign accounts.
The definition of a financial account includes any kind of account with a financial institution or with a person or company acting as a financial institution. Securities accounts, options accounts, commodity future accounts, cash value annuities, cash value life insurance policies, mutual fund shares, brokerage accounts, savings accounts, demand accounts, checking accounts, deposit accounts, and time deposits are all considered financial accounts that trigger the FBAR filing requirement.
The FBAR is required because of the Bank Secrecy Act. The purpose of FBARs is to help facilitate compliance with U.S. tax laws by ensuring that the U.S. government is aware of specified foreign financial assets (SFFA) owned by U.S. persons.
To find out more about what an FBAR is, how it works and how to complete this form, you should get legal help well before the deadline when the form must be filed. You should also talk with a skilled DC tax lawyer to find out what options you have if you failed to file FBARs in the past and you want to try to minimize civil penalties and avoid criminal consequences.
Speak with an attorney as soon as possible, as you may be able to participate in a voluntary amnesty program in which you admit past failures to file FBARs and benefit from reduced penalties.
Participation in voluntary amnesty programs is no longer possible if you're under investigation by taxing authorities, so you don't want to wait until it is too late. Your attorney can help you to decide if this course of action is best and can help you to comply with all laws related to FBARs going forward. Contact attorney Kevin Thorn today for help.