Foreign Bank Account Reports (FBAR) Due June 30th

The Treasury Department requires every U.S. citizen or resident, including all forms of organizations, having a financial interest in, or signature or other authority over a financial account in a foreign country to file a Foreign Bank Account Report (FBAR). The report is made for each calendar year using form TD F 90-22.1 and must be received by the government no later than June 30th of the next year. No extension of time to file the report is permitted. The report is a separate filing and is not included with your income tax return, although certain questions in your income tax return about foreign bank accounts must be answered. The report is required if the aggregate value of all foreign accounts exceed $10,000 at any time during the calendar year. Some foreign financial accounts may not be readily apparent.  For example, one local bank offered local companies a sweep account that paid a higher rate of interest that was actually located in the Cayman Islands!  Civil penalties for not filing on time can range from a minimum of $10,000 to the greater of $100,000 or 50% of the account value.  Criminal penalties can range from a fine of up to $500,000 plus 10 years in jail.  Clearly the US government is serious about forcing FBAR compliance.  The government assumes noncompliance is indicative of tax fraud.

The 2010 HIRE Act added new disclosure requirements for those with more than $50,000 of "specified foreign financial assets" for tax years beginning on or after March 19, 2010.  In this situation, disclosure in the income tax return is required, but this does not relieve the FBAR requirement.  The penalty for failing to disclose this information in the income tax return is $10,000 and increases $10,000 every 30 days thereafter, not to exceed $50,000.