FOREIGN FINANCIAL REPORTING TO TREASURY
FBAR   FATC   OFAC
REPORT OF FOREIGN BANK AND FINANCIAL ACCOUNTS (FBAR)

Every year, under the law known as the Bank Secrecy Act, you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts. You report the accounts by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114.

Who Must File ?

A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:

  • a financial interest in or signature or other authority over at least one financial account located outside the United States if
  • the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.Generally, an account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a “foreign financial account” for FBAR purposes.
But, you don’t need to report foreign financial accounts that are:
  • Correspondent/Nostro accounts,
  • Owned by a governmental entity,
  • Owned by an international financial institution,
  • Maintained on a United States military banking facility,
  • Held in an individual retirement account (IRA) you own or are beneficiary of,
  • Held in a retirement plan of which you’re a participant or beneficiary, or
  • Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.You don’t need to file an FBAR for the calendar year if:
  • All your foreign financial accounts are reported on a consolidated FBAR.
  • All your foreign financial accounts are jointly-owned with your spouse and:
  1. You completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly-owned accounts on a timely-filed, signed FBAR.

Note: Income tax filing status, such as married-filing-jointly and married-filing-separately has no effect on your qualification for this exception.The FBAR Reference Guide (PDF) and FBAR instructions  provide more detailed information. The FBAR webinar explains how to calculate the aggregate value of your accounts to figure if you need to file an FBAR. 

When To File ?

The FBAR is an annual report, due April 15 following the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15. You don’t need to request an extension to file the FBAR.If you are affected by a natural disaster, the government may further extend your FBAR due date. It’s important that you review relevant FBAR Relief Notices for complete information.For certain employees or officers with signature or other authority over, but no financial interest in certain foreign financial accounts, the 2018 FBAR due date is deferred to April 15, 2020.

See Notice 2018-1

How To File ?

You must file the FBAR electronically through the Financial Crimes Enforcement Network’s BSA E-Filing System. You don’t file the FBAR with your federal tax return. If you want to paper-file your FBAR, you must call FinCEN’s Regulatory Helpline to request an exemption from e-filing. See Contact Us below to reach this Helpline. If FinCEN approves your request, FinCEN will send you the paper FBAR form to complete and mail to the IRS at the address in the form’s instructions. IRS will not accept paper-filings on TD F 90-22.1 (obsolete) or a printed FinCEN Form 114 (for e-filing only). If you want someone to file your FBAR on your behalf, use FinCEN Report 114a, Record of Authorization to Electronically File FBARs, to authorize that person to do so. You don’t submit FinCEN Report 114a when filing the FBAR; just keep it for your records and make it available to FinCEN or IRS upon request.

Keeping Records

You must keep records for each account you must report on an FBAR that establish: 

  • Name on the account,
  • Account number,
  • Name and address of the foreign bank,
  • Type of account, and
  • Maximum value during the year.

The law doesn’t specify the type of document to keep with this information; it can be bank statements or a copy of a filed FBAR, for example, if they have all the information. You must keep these records for five years from the due date of the FBAR. Exception: An officer or employee who files an FBAR to report signature authority over an employer's foreign financial account doesn’t need to personally keep records on these accounts. The employer must keep the records for these accounts.

Penalties

You may be subject to civil monetary penalties and/or criminal penalties for FBAR reporting and/or recordkeeping violations.  Assertion of penalties depends on facts and circumstances. Civil penalty maximums must be adjusted annually for inflation.  Current maximums are as follows:

  • Foreign Account Tax Compliance Act (FATCA)
  • The Foreign Account Tax Compliance Act (FATCA), which was passed as part of the HIRE Act, generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments.The Foreign Account Tax Compliance Act (FATCA) will increase information reporting by foreign financial institutions, non-financial foreign entities, and certain U.S. persons holding financial assets outside the United States.
  • Form 8966, FATCA Report
  • Form 8957, Foreign Account Tax Compliance Act (FATCA) Registration
  • Instructions for Form 8966, Foreign Account Tax Compliance Act (FATCA) Report
  • Form 8938, Statement of Foreign Financial Assets
  • Summary of FATCA Reporting for U.S. Taxpayers
  • Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. There are serious penalties for not reporting these financial assets. This FATCA requirement is in addition to the long-standing requirement to report foreign financial accounts on Form TD F 90.22-1, Report of Foreign Bank and Financial Accounts (FBAR).
  • Report of Foreign Bank and Financial Accounts (FBAR)
  • If you own a foreign bank account, brokerage account, mutual fund, unit trust, or other financial account, then you may be required to report the account yearly to the Internal Revenue Service. FBAR Form 114 (Formerly Form TD-F 90-22.1) can be completed by accessing FinCEN’s BSA E-Filing System.
Office of Foreign Asset Control (OFAC) Requirements

All U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S  incorporated entities and their foreign branches. In the cases of certain programs, such as those regarding Cuba and North Korea, all foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S. origin goods to comply.

OFAC web site:
www. https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx