FBAR and FATCA Reporting
Report of Foreign Bank and Financial Accounts (FBAR)
If you have a financial interest in or signature authority over a foreign account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).
U.S. taxpayers holding foreign financial assets may also need to file Form 8938. Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the Internal Revenue Service on Form 8938, Statement of Specified Foreign Financial Assets, which is filed with an income tax return. Those foreign financial assets could include foreign accounts reported on an FBAR. The Form 8938 filing requirement is in addition to the FBAR filing requirement.
We will inquire annually regarding your foreign accounts, advise you regarding your reporting requirements and prepare all required reports based upon the information you provide to us.
NOTE OF IMPORTANCE
The Internal Revenue Service has begun to impose substantial penalties for failure to file. Willful failure to file can result in penalties up to the greater of $100,000 or 50% of the account balance for each incident. In other words, failure to file for a period of three years could result in penalties of 150% of the account balance.