FBAR (Report of Foreign Bank and Financial Accounts)

Detailed Explanation

The FBAR (FinCEN Form 114) is a Treasury Department report, separate from the federal income tax return, required of any US person with a financial interest in or signature authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during the calendar year. "US person" includes US citizens, residents (including green card holders meeting the residency test), and US-formed entities. The aggregate value test means you must add the maximum value of every foreign account during the year, then report all of them if the total crossed $10,000 even momentarily. Reportable accounts include foreign bank accounts, brokerage accounts, mutual funds, certain insurance products with cash value, and many foreign retirement accounts. The FBAR is filed electronically through the BSA E-Filing System, due April 15 with an automatic extension to October 15 (no separate request needed). Penalties for non-willful violations are up to $10,000 per FBAR per year (post-Bittner v. United States, 2023, the Supreme Court ruled the cap is per-form not per-account for non-willful), inflation-adjusted. Willful violations can reach the greater of $100,000 or 50% of the highest balance per violation, plus potential criminal exposure. The IRS Streamlined Filing Compliance Procedures (Domestic and Foreign Offshore) provide a path to amnesty for non-willful taxpayers, generally requiring 6 years of FBARs and 3 amended returns.