During the past year(s), did you have a foreign bank account or a financial interest in, or signature authority over, any foreign account? If so, be aware…the IRS wants to know about it.
FBAR Filing Requirements
If the combined aggregate value of all those foreign bank accounts exceeded $10,000 at any time during the calendar year (even if just for 1 day), you are required to file FinCEN Form 114, Foreign Bank Account Report (“FBAR”) with the Financial Crimes Enforcement Network. The online filing of the FBAR is separate from the individual tax return and is due by April 15th, 2026, for tax year 2025. You’re allowed an automatic extension to October 15th if you fail to meet the FBAR annual due date of April 15th.
This reporting may be applicable to US citizens, US residents and domestic entities including but not limited to Partnerships, Corporations, S-Corps, Limited Liability Companies, trusts and estates. The FBAR is e-filed at http://bsaefiling.fincen.treas.gov/.
FATCA Reporting Requirements (Form 8938)
Additionally, if the aggregate value of these accounts exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year, the taxpayer must report these assets on Form 8938, Statement of Specified Foreign Financial Assets under Foreign Account Tax Compliance Act (“FATCA”). Form 8938 is filed with the IRS as part of your personal or business tax return. The account thresholds are different for married and single taxpayers and are higher for those individuals who live outside the United States. The FATCA requirement is in addition to the long-standing FBAR filing requirement. Even though there is similar and often identical information disclosed on both the FBAR and FACTA forms, filing one form does not does not relieve a taxpayer of the requirement to file the other form.
FBAR and FATCA Compliance and Penalties
Non-compliance with the FBAR or FATCA can result into severe penalties starting at $10,000 for failure to file and up to $100,000 or more for willful violations. Criminal penalties may also be imposed.
US taxpayers who fail to voluntarily report their interests in foreign financial accounts can become compliant with their obligations in one of the following four ways:
- Streamlined filing compliance procedures for non-willful conduct
- Delinquent FBAR submission procedures
- Delinquent International information return submission procedures
- Offshore Voluntary disclosure program
If you need help determining if you need to file the FBAR and/or FATCA forms please contact your Wegner CPAs professional.
