Report of Foreign Bank and Financial Accounts (FBAR)

Report of Foreign Bank and Financial Accounts (FBAR)

Due to all the hidden offshore bank accounts that IRS found this year, this has become a really hot item. If you have a foreign bank account, no matter how small, PLEASE show it on your tax return. It is not illegal to have a foreign bank account, it is only illegal not to claim the income from it, or going into it.

If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund or other type of financial account, you may be required to report the account yearly to the Department of the Treasury. Under the Bank Secrecy Act, each United States person must file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if

The person has a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country, and
The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

A United States person is not prohibited from owning foreign accounts but civil and criminal penalties may apply for failures to properly file FBARs when required. The information reported on an FBAR may be used for governmental purposes, including law enforcement and tax compliance purposes.