Deadline to Complete the Report of Foreign Bank and Financial Accounts (FBAR) for Calendar Year 2014 is June 30, 2015.
Any U.S. person that has a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account may be required to report those accounts and balances to the Department of Treasury’s Financial Crimes Enforcement Network (FinCen).
Who Needs to File
Only U.S. persons that have a financial interest in or signature authority over foreign financial account(s) that have more than $10,000 maximum value at any point during the year must file. This is an aggregate determination. If the aggregate value of all foreign financial accounts is over $10,000 (even though there is no individual account over that threshold amount), an FBAR must be filed listing all foreign accounts.
- A U.S. person means any person that is a resident of the United States or subject to the jurisdiction of the United States. The term “person” is used in the broad legal sense and includes any individual, corporation, partnership, estate, trust, branch or other organization.
- A financial interest means that the U.S. person is the owner of record or has legal title of the account, regardless of whether the account is maintained for their benefit. This can also include a person acting as an agent, nominee, attorney, or person acting on behalf of someone else with respect to the account.
- Signature authority is the authority of any individual (alone or with another individual) to control the disposition of the assets held in the foreign financial account by direct communication with the bank or financial institution that maintains the account.
Additionally, if there is a U.S. person that owns more than 50% of an entity that has a foreign account, the U.S. person and the entity must each file and report the foreign account information.
What to File
The account(s) and their associated information must be reported on Form 114, “Report of Foreign Bank and Financial Accounts” (formerly known as a TD.F 90-22.1).
Where to File
All FBAR forms must be filed electronically with FinCen through the BSA E-Filing System. That system can be accessed at http://bsaefiling.fincen.treas.gov/, or your KSM advisor can help facilitate this filing.
When to File
All FBAR filings related to calendar year 2014 are due by June 30, 2015. There are no extensions available.
The penalties for failure to file an FBAR are severe. There can be civil penalties of $10,000 for each non-willful violation. Additionally, if it is found that the violation is willful, the penalty can be the greater of $100,000 or 50% of the amount in the foreign account for each violation (each year that an FBAR wasn’t filed is viewed as a separate violation). Criminal penalties are also a possibility, including up to five years of imprisonment with increased monetary penalties.
Please contact your KSM advisor for additional assistance or for help completing this important U.S. government filing.