FBAR Filing for Foreign Bank Accounts and Assets

Any US person — citizen, green card holder or tax resident, and also entities — whose foreign financial accounts had a combined highest balance exceeding $10,000 at any point in the calendar year. It includes accounts you do not own but have signature authority over. The test is aggregate and uses the highest balance during the year, so briefly holding a larger sum, or moving money between two accounts, can trigger it.

They are separate obligations. The FBAR is FinCEN Form 114, filed electronically with the Treasury and not part of your tax return, with the $10,000 aggregate threshold. Form 8938 is a FATCA disclosure filed with your tax return, with higher thresholds that vary by filing status and whether you live abroad, and it covers a wider class of assets than just accounts. Many people must file both, reporting overlapping information.

15 April, aligned with the tax return deadline, with an automatic extension to 15 October that you do not have to request. It is filed separately from your return through the FinCEN BSA E-Filing system, which is why it is possible to file your tax return on time and still miss the FBAR entirely.

Severe, and assessed per account per year. Non-wilful failures attract a substantial penalty per violation, while wilful failures can reach the greater of a fixed statutory amount or 50% of the account balance, with criminal exposure in the worst cases. This asymmetry — a modest account generating a penalty far larger than any tax involved — is why the filing itself matters more than the amounts.

Address it deliberately rather than either ignoring it or simply back-filing. Where income was also unreported — the usual position with NRO interest — the Streamlined Filing Compliance Procedures are the mechanism, and they come in two versions: one carrying a penalty of 5% of your affected foreign assets and one carrying none at all, with the difference decided by a residency test that can favour recent arrivals and that expires as you accumulate US years. Where all your income was reported and only the reports were missed, the position is simpler and is now general guidance rather than a named programme: provided the IRS has not contacted you about a late FBAR and you are not under civil or criminal investigation, file the late reports as soon as possible and give your reason for filing late. What matters most is choosing the route before contact from the IRS, because an examination of your returns for any year — even an unrelated one — closes the streamlined option entirely.