CPA & Business Advisory Blog

New Report Required for Foreign Financial Accounts

If you have a financial interest in or signature authority over a foreign financial account—including a bank account, brokerage account, mutual fund, or other type of foreign financial account—you may be required to file a Report of Foreign Bank and Financial Accounts (“FBAR”). The FBAR is an annual informational report that must be electronically filed on or before June 30. The new FinCEN Report 114 (click here to file)  replaces the old Form TD F 90-22.1. 

An FBAR filing is required if you have an aggregate of $10,000 or more in a foreign financial account at ANY time during the year. The $10,000 refers to all your foreign financial accounts. So, if on any given day during the year you had, for example, $9,000 in a Canadian bank account and $1,100 in a Mexican bank, you would need to file an FBAR.
Additionally, officers of a corporation that have signature authority over foreign accounts are also required to file. There is an exception for officers of a publicly traded company as well other potential exceptions.
The penalties for failure to file can be severe. The civil penalties for noncompliance depend on if the violation was willful or non-willful. A fine for a non-willful violation can amount to $10,000 per account per year. The penalty for willful violations is the greater of $100,000 or 50% of the value of the account for each account for each year. Criminal penalties could also apply.

For more information on your FBAR reporting requirements, please click here to leave a message for one of our tax planning and preparation consultants. Or, feel free to contact us directly at any of our three office locations Cleveland, Akron, or Tampa.

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