Answers to common FBAR questions

What is an FBAR form?

Simply put, the FBAR is a reporting form for those who hold $10,000 or more (in the aggregate) in a foreign financial account. It is called the Report of Foreign Bank Accounts, or TD F 90.22-1 or FinCEN Form 114. Yet the law requires more than bank accounts to be reported. The form is much more complicated that it appears, and the consequences of errors can be severe (but don’t have to be!).

What is the FBAR filing deadline?

It is due when your tax return is due (this is not a typo, it used to be due on June 30th but that changed as of the 2016 filing season).

How do I file an FBAR?

Visit our step-by-step FBAR filing guide if you wish to do it yourself.

What should be reported on an FBAR?

There is where people sometimes get confused. They think only bank accounts need to be reported. Not so. You must also include things like life insurance policies, mutual funds, accounts you only have signatory authority on, and more.

What does it mean to be “willful” or “non-willful”?

Willfullness is “whether there was a voluntary, intentional violation of a known legal duty”. Basically, did you intentionally not file your FBAR? If you are non-willful, it means you had no knowledge of this filing requirement, or were confused by it. If you need assistance, we can represent you in front of the IRS to help prove that you were sincerely non-willful.

What are the penalties of filing my FBAR late, or not filing at all?

There is no “late FBAR penalty”. There are only non-filing penalties, and the IRS can assess you those non-filing penalties if you file even one day late. If it is determined that you were willful in non-filing, the penalty can be up to 50% of the account value the date the FBAR was due. The higher the account balance, the higher the penalty with a cap of 50%.

The maximum non-willful penalty is $10,000 per occurrence. We are often able to get clients into programs where the penalty may only be 5% of the account balance, or no penalty at all.

What if I was supposed to file my FBAR but never did it? Can you help me?

Absolutely. Obviously, you want to avoid extreme penalties. There are disclosure programs you can get into — the difference between willful and non-willful is huge so we recommend getting legal advice about what program is best for you.We know what to say, and what not to say to the IRS when stating your reasons for failure to file.

I was supposed to file an FBAR, but did not. If you file my FBAR now, it will be my first time to ever report it. Will it raise a red flag and increase my chance of being audited?

Our experience has been that the IRS doesn’t look at FBARs as a primary determiner of whether or not to audit someone. Rather, the IRS will look to see if someone already under audit has an FBAR requirement, and then check to see if that FBAR requirement was fulfilled or not.

It’s important to note that if you’re asking that question it means that right now you 100% know about the FBAR filing requirement. If you do not file an FBAR now, the IRS could later say you willfully did not file an FBAR.

I hired someone to file my FBARs and they made errors. Can you fix them?

Yes. FBAR filing is a very specialized field. We regularly have CPAs reaching out to us to ask for assistance when a client of theirs that needs an FBAR filed. We are also routinely hired to fix problems that never should have occurred. We can assist in amending FBARs to fix errors.

We can help you file your FBARs and get into compliance. Call us at 888-727-8796, email us at info@irsmedic.com; your information will be kept confidential. We also invite you to review success stories and case studies of clients of ours.