Tax
Definition
FBAR (Foreign Bank Account Report) is a mandatory annual filing required of US persons who have financial interest in, or signature authority over, foreign bank accounts with an aggregate balance exceeding $10,000 at any point during the year.
FBAR is filed with the Financial Crimes Enforcement Network (FinCEN), not the IRS, and is separate from your federal tax return. It applies to bank accounts, securities accounts, and certain other financial accounts held at foreign financial institutions. The filing deadline is April 15 (with an automatic extension to October 15). Penalties for non-compliance are severe: up to $10,000 per violation for non-willful failures, and up to the greater of $100,000 or 50% of the account balance for willful violations. US persons with foreign accounts should consult an international tax specialist to ensure they are compliant.
Many US persons with foreign accounts — expats, digital nomads, international business owners — are unaware of the FBAR requirement until they receive a penalty notice. The penalties can be disproportionately large relative to the account balance. An international tax advisor can ensure you are filing correctly and help you navigate the Streamlined Compliance Procedures if you have unfiled FBARs.