As established by the Bank Secrecy Act, every year you must report your required foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department by filing a Report of Foreign Bank and Financial Accounts (FBAR) on FinCEN Form 114, and keep records of those accounts.
Many US Expats wonder how does the U.S. government will know if certain foreign financial assets aren’t being reported. The answer lies that in response to the Foreign Account Tax Compliance Act, the United States has entered into international information sharing agreements with 39 countries and is in the final stages of finalizing information sharing agreements with 62 more countries. Through these information sharing agreements, all the participating Foreign Financial Institutions (FFIs) are required to report details on accounts held by US Citizens in foreign countries to the U.S. government.
Participating FFIs share broad information about the foreign bank accounts held by U.S. persons to the United States, including:
FBARS are filed through FinCEN Form 114 and can only be filed online but if you want to paper-file your FBAR, Attorney Sabalier can provide you the legal guidance you need to request and being granted this exception. FBAR filing has nothing to do with your US expat tax return, FBARS are filed to the Treasury Department.
FBARS are periodically due to file on April 15th every year, but you may automatically receive an extension to file them by October 15th. You may not request an extension for filing FinCEN Form 114 (FBAR) after this date. Therefore, it is imperative for you to take action immediately to become compliant with this legal duty to file on a yearly basis by the due date.
You may be subject to civil monetary penalties and/or criminal penalties for FBAR reporting and/or record keeping violations. Assertion of penalties depends on facts and circumstances. But in all instances, the penalties for failing to file FBARS can become serious and severe.
Start your process towards becoming compliant today, and avoid getting into unwanted issues and trouble with the U.S. government, the IRS and the Treasury Department. Contact licensed and experienced Expat International Tax lawyer Alexandra Sabalier for a Legal Consultation.