By Gary G. Wallace, CPA, Managing Partner
What Individuals and Businesses with Foreign Financial Accounts Need to Know
Overview of Report of Foreign Bank and Financial Accounts
The purpose of the Foreign Bank and Financial Accounts (FBAR) is to track and record foreign financial accounts so that U.S. taxpayers are appropriately taxed on all sources of income. The FBAR is a financial form required to be filed by all United States persons, residents, and entities (such as trusts and corporations) that have:
- Financial interest in or signature authority over at least one financial account located outside the United States AND;
- Those financial foreign accounts have an aggregate value that exceeds $10,000 at any time during the calendar year.
FBAR filing deadline
FBAR filings are generally due by April 15 of the year that follows the reporting year. However, filers receive an automatic extension until October 17, 2022. An extension request is not required.
For those that were impacted by the recent disasters, Financial Crimes Enforcement Network (FinCEN) issued a release for relief on the FBAR deadline.
How to file
Filers do not file the FBAR with their federal income tax return. The 2021 FBAR must be filed electronically with FinCEN and is only available through the BSA E-Filing System website. Individuals who are unable to e-file their FBAR must contact FinCEN at 800-949-2732 or FRC@fincen.gov to request an alternative filing method. Callers from outside the U.S. can contact the helpline at 703-905-3975.
Penalties are substantial for failure to timely file FBARs.
Questions on FBAR reporting? Contact your Keiter Opportunity Advisor.
About the Author
Gary G. Wallace, CPA, Managing Partner
Gary provides tax and business advisory services to business and individual clients. He has advised clients in various aspects of restructurings, including tax aspects of debt workouts and foreclosures, forgiveness of indebtedness, bankruptcy restructurings and liquidations, establishing liquidating trusts and partner-partnership transactions. Gary also has significant knowledge and experience in individual taxation, business taxation, and advising clients on all aspects of tax matters. He is the Managing Partner of the Firm.
More Insights from Gary G. WallaceThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
