CPA & Business Advisory Blog

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Avoid Penalties Associated with Foreign Accounts

If you or an associated entity has a financial interest in, or signature authority over, certain foreign accounts, you may be required to report these accounts to the IRS annually on Financial Crimes Enforcement Network Form 114, “Report of Foreign Bank and Financial Accounts” (FBAR). The Bank Secrecy Act (BSA) form is required if the aggregate value of foreign accounts, such as bank accounts, brokerage accounts, mutual funds or trusts, exceeds $10,000 at any time during the calendar year.

Penalties for failure to file required FBARs include substantial monetary penalties and, in extreme cases, imprisonment. In some situations, these penalties may apply to a company’s officers or employees who have signature authority over foreign accounts.

What to Do

The FBAR is a calendar year report and must be filed on or before June 30 of the year following the calendar year being reported. For tax years beginning after Dec. 31, 2015, the due date of FinCEN 114 will be April 15, with a maximum extension for a six-month period ending on October 15. Since FBAR is a BSA form, it is not processed by the IRS. It must be filed separately from your income tax return with the Federal Crimes Enforcement Network (FinCEN). The FBAR is filed electronically through FinCEN’s BSA e-filing system. For detailed filing instructions, see the FinCEN site. In cases where the required forms weren’t filed, there are programs to catch up these filings to avoid potential penalties.

Click here to continue reading about the hottest topics in international tax in our free e-book, Going Global: International Tax Issues to Consider Before Expanding Overseas.

If you have any questions about international tax, or would like to learn how your business can succeed overseas, contact Jason Rauhe at 888-201-4484 or email

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