Table of contents:
What is FBAR and who must file FinCEN 114
An FBAR is a Report of Foreign Bank and Financial Accounts that U.S. persons are required to submit to the U.S. Treasury annually. It includes disclosure of various foreign financial accounts such as bank accounts, savings accounts, money market funds, demand deposits, securities accounts, bonds, investments, and offshore structured entities. Refer to the Types of accounts reported on FBAR.
The FBAR, also known as FinCEN 114, is a concise one-page form used to report the identity and location of all the foreign accounts you own or have a financial interest or signature authority with a combined balance exceeding $10,000 at any point during the previous calendar year. It means you must report all non-U.S. bank accounts, even if only one account had a balance exceeding $10,000 for a single day, while the rest had zero balances throughout the year. The IRS is especially interested in instances where funds were transferred from one account to another.
The IRS and U.S. Treasury possess mechanisms to identify individuals with foreign bank accounts. They actively pursue delinquent taxpayers and enforce payment of outstanding taxes. Through information-sharing agreements with certain countries, they conduct investigations and gather data on foreign accounts. Additionally, they receive information through a whistleblower program, and their overseas criminal investigation professionals.
Furthermore, since January 2015, the IRS receives comprehensive information about foreign financial accounts directly from participating Foreign Financial Institutions (FFIs). These institutions are obligated to report your name, address, U.S. Tax Identification Number (TIN), foreign bank account number, account closures from 2013 to the present, end-of-year balance, and gross account earnings.
Types of accounts reported on FBAR (FinCEN 114)
Checking account held in a non-U.S. domiciled bank.
Savings account held in a non-U.S. domiciled bank.
Checking account held at a non-U.S. branch of a U.S.-domiciled bank.
Savings account held at a non-U.S. branch of a U.S.-domiciled bank.
Non-U.S. financial account over which you have signature authority.
Non-U.S. securities or stocks held in a foreign financial institution.
Non-U.S. accounts owned by a foreign entity in which you have at least 50% financial interest.
Non-U.S. mutual funds (additional filing requirements may apply for PFIC 8621).
Non-U.S. accounts held by either a foreign or domestic trust with which you are associated.
Non-U.S. life insurance policy with cash value.
Non-U.S. annuity contract.
All pension accounts should be reported on the FBAR.
Government-mandated Social Security fund (if the fund is privately operated, not by the government, i.e. you have a specific balance to your name contingent on how much money you have contributed).
❗ Important notes:
Property, precious metals, cash, and art should not be included in the list of your foreign bank accounts.
If you do not hold any foreign bank accounts, there is no requirement to prove the absence of such accounts.
FBAR filing by spouses
Assuming both spouses are U.S. citizens or Green Card holders:
If both spouses only have joint accounts, they can file a single FBAR together.
If one spouse has foreign accounts requiring FBAR reporting and the other is a joint owner without any foreign accounts, they can file one FBAR together.
However, if both spouses have at least one individual foreign account, spouses must file FBARs separately (two FBARs in total).
Reporting child's bank account
Assuming its balance is over $10,000:
If you are listed as a guardian with signatory authority on the account, you must report this account on your FBAR.
If you do not have signatory authority over the account, you do not need to list it on your FBAR.
If your child is a U.S. citizen, you must file an FBAR on their behalf, regardless of their age and your signatory authority.
How to prepare and file FBAR (FinCEN 114)
You can fill out and submit the FBAR electronically through the BSA e-filing system (the Department of the Treasury), as it is a standalone form and not a part of your tax return. Refer to the U.S. Treasury instructions.
However, we recommend letting TFX professionals handle this task for you because of the following reasons:
Accuracy: While not conceptually tricky, the forms must be completed 100% correctly to avoid scrutiny and potential rejection by the IRS. It is like putting together a jigsaw puzzle without a manual.
Time required: You may need to set up an account on the Treasury website to file an FBAR.
Changing IRS regulations: Financial accounting reporting regulations by the IRS undergo constant changes that most taxpayers may not be aware of. We stay up to date with these developments throughout the year, whereas you would need to invest time to catch up.
If you would like TFX to prepare either the FBAR (FinCEN Form 114) or FATCA (Form 8938) as part of your tax preparation, when creating a Tax Questionnaire, answer Yes to the question I have financial accounts outside the U.S. and list your foreign financial account details on the Non-US Financial Accounts tab.
Extension of time to file FBAR
U.S. citizens living abroad who fail to meet the annual FBAR due date of April 15th will automatically receive an extension until October 15th each year. Requests for FBAR extension are not required. Please refer to Tax due dates and deadlines for current information on FBAR filing deadlines.
Note: if you have failed to file FinCEN Form 114 when it was required, your filing options will depend on whether you received unreported interest from foreign bank accounts and whether you are subject to additional reporting requirements:
If all interest from foreign bank accounts was reported on the original returns, file the FBAR through the Delinquent FBAR Submission Procedures without amending your tax returns.
Acknowledged’ FBAR reports
'Acknowledged' is the final stage of the FBAR filing process. The Treasury does not 'accept' the report but merely buys it. If your tax preparer has provided you with a filing confirmation that says 'acknowledged,' please process the final signoff.
How to verify if FBAR was filed (similar to a tax transcript)
To verify FBAR filing, please call the U.S. phone number: 866.270.0733.
Callers outside of the U.S. can dial +1 313.234.6146 (this is not a toll-free number).
Hours of operation: Monday to Friday, 7 a.m. to 3 p.m. EST.
Alternatively, you can submit a verification request in writing. The request should include the filer's name, Taxpayer Identification Number, and the filing period.
There is a $5.00 fee for verifying five or fewer forms and an additional $1.00 fee for each additional form. If copies of the forms are needed, there is an extra fee of $0.15 per copy. Checks or money orders in USD should be made payable to the United States Treasury. The written request and payment should be mailed to the following address: