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If you had a bank, securities or similar account in a foreign country and the combined value of the accounts
at any time was more than $10,000, you are required to complete Treasury Department Form 114.
It does not matter in which country or countries the accounts are located.

This form is filed separately from your tax return.

This form must be filed by June 30 for the preceding year and is not filed with your income tax return.

You may face very severe penalties if you fail to file this form.



The IRS has issued new guidance on how penalties are determined when a US citizen, dual citizen or permanent resident lives outside the US and has not filed tax returns or reported foreign bank accounts (FBAR).  In many cases penalties would be waived altogether.

see BLOG for more information



Foreign Bank Account Reporting

If you have signature authority over a bank, securities or other financial account in a foreign country and the combined value of the accounts at any time during the year was more than $10,000, you are required to complete and file Treasury Department Form TD F 90-22.1. It does not matter in which country or countries the accounts are located.

The total value in the accounts must be reported by each joint account holder or anyone else with signature authority.

Example 1: Suppose you had $5000 in a German bank account and $6000 in a French bank account during the year. Both accounts were closed before year-end and the balances transferred to your bank in the US. You still have to file the Treasury Department form. The total value of $11,000 exceeds the $10,000 threshold. Closing the accounts before year-end would not make any difference as it is the highest balance in each account during the year that must be reported.

Example 2: Your elderly parents live and have their bank accounts in Canada. The highest balance is $12,000 US. They have added you as a co-signer on the accounts in case they become unable to pay their bills. You still have to report the entire $12,000. The fact that you are just a co-signer or you consider the money to be really theirs and not yours, does not alter the situation. As you have signature authority over the accounts and their value exceeds $10,000, you must report them.

Form 114 is not filed with your income tax return as it is not a tax form but rather a disclosure form filed with the Treasury Department.

You are subject to very severe penalties for failing to file or filing late.

In addition to filing the Treasury Department form, you must report foreign bank and financial accounts on your tax return (Form 1040, Schedule B). You must report and pay tax on dividend or interest income from the foreign accounts and list the countries in which the accounts are located.

Useful Links:

IRS: FBAR info

FAQs - Filing Requirements

How A $200,000 UBS Account Grew Into A $21 Million Penalty

See this Forbes Article for more information.









All information presented should be considered general in nature and not advice as to a specific situation.