How to File Your Own Foreign Bank Account Report
Unlike other firms, our firm puts the interests of our clients first. To the extent a client wants to be empowered with the knowledge to handle their own tax affairs, we actively encourage that; however, you do so at your own peril.
Firstly, it’s not an “eff-bee-ay-are.” It’s an acronym, which means you pronounce it like a word: “eff-bar,” which stands for Foreign Bank Account Report (FBAR).
Secondly, an FBAR is not filed with the Internal Revenue Service. It’s filed with the Financial Crimes Enforcement Network (FinCEN); pronounced “fin-sin.” More specifically, it’s filed on FinCEN Form 114.
Therefore, FinCEN Form 114 is the Foreign Bank Account Report (FBAR).
The FBAR became a requirement when Congress passed the Bank Secrecy Act of 1970. This was the time of Pablo Escobar, and the Bank Secrecy Act was targeting criminal organizations like the Medellin Cartel. You see, back then, attorneys were approaching people in Miami and offering them money in exchange for opening a bank account under their own name in places like Panama and Switzerland. It sounded like a good deal; you got a free vacation to Panama or Switzerland and all you had to do was sign a few bank forms while you were at the beach or ski resort. Well, little did you know that you just became a part of Pablo Escobar’s international money laundering network. In order to combat this, Congress passed the Bank Secrecy Act to force Americans to disclose whether they had bank accounts with more than $10,000 USD overseas and made it criminal to knowingly fail to disclose it.
U.S. citizens and U.S. lawful permanent resident “green card holders” worldwide must file the FBAR each year. The due date is the same as the due date for your tax return. If you saw another website with a different date, ignore it. It’s an outdated article. The comment we hear most often: “But I saw a different date on the FinCEN website itself.” Well, guess what, welcome to your inept government that does not even have the sense to update their own website. You see, that’s the problem with confusing Google with quality legal advice. Attorneys exist because we’re better at interpreting the law than government employees. The due date changed in 2015 with the passage of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Section 2006(b)(11). Look it up for yourself.
Under U.S. law, if the cumulative balance of all of your non-U.S. financial accounts (checking/saving, investment, etc.), when converted to U.S. dollars, exceeds $10,000 USD in the aggregate, you are required to file an FBAR. In other words, if you have 5 accounts with $2,000 USD each, you have to file the FBAR.
The penalty for merely negligently not filing by your tax deadline (including extensions) is a whopping $10,000 per year with a six-year statute of limitation, which means they can assess penalties going six years back. And if the IRS has reason to believe the failure to file was intentional, the annual penalty increases to an astonishing $100,000 plus the potential for criminal prosecution. Long story made short is: don’t mess with this. It’s not a joke. It’s just an informational report. You can argue constitutional freedoms and liberty after you file the FBAR. Just give the U.S. government what they want.
Electronically Filing Online
Follow the steps below to file your FBAR via the online form:
1. Go to this webpage: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html
2. Click Start Now under the “Online Form” e-Filing Method.
3. Enter your contact information on the Filer Contact Information page. The email address you enter will only be used to send correspondence regarding the status of your FBAR submission. The additional information is used to identify you as the filer in the event that you contact BSA E-Filing for assistance.
4. Click Start FBAR at the bottom of the Filer Contact Information page to access the FBAR Home page.
5. In the Filing name field, enter a descriptive name to identify your FBAR (e.g. SMITH FBAR 2014). This filing name is also useful when contacting the BSA E-Filing Help Desk for assistance.
6. Complete the FBAR in its entirety. Refer to the FBAR Guide for instructions. Additional parts or accounts can be entered by clicking on the small plus (+) signs located on the report. At the very least, all required fields – identified with an asterisk (*) – must be completed.
7 When you are ready to submit, return to the Home tab and click Sign the Form to accept the signature agreement. If you need to make changes to the FBAR after it has been signed, simply click Remove Signature from the Home tab.
8. When the form is free of any validation errors and electronically signed, return to the Home tab and click Submit. A confirmation page will be displayed at this time.
9. Click Download Copy of My FBAR on the confirmation page to retain a read-only copy of your FBAR submission. Save the confirmation page for your records as well by selecting to save from your browser menu. When saving your FBAR information, be sure to enter a file name and save to a familiar location on your computer to make it easy to find your file in the future.
10. Shortly after submission, you will receive an email notification regarding the status of your FBAR submission. Save this email for your records.
11. In approximately two (2) business days, you will receive a second and final email notification informing you that your FBAR submission has been acknowledged by FinCEN and assigned a unique BSA ID. Save this email for your records. Your FBAR filing is now complete! In the event that you need to amend your FBAR, you must enter the BSA ID assigned to your FBAR on your amendment.
If you still need assistance, I would recommend simply letting us handle it. Nevertheless, for all the die-hard do-it-yourselfers out there, you can contact the BSA E-Filing Help Desk by phone at 1-866-346-9478 or via email at BSAEFilingHelp@fincen.gov.