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2020/10/21 at 7:20 am #88481Niwedita JaysawalKeymaster
Posted by Expat Pro Tax
The biggest question I get on a daily basis is “do I need to file the FBAR form?”. Of course that comes after I explain what the FBAR form really is. Simply, the FBAR form is an annual form due by every U.S. Citizen no matter where they live if they have $10,000 or over at any one time in a bank outside of the U.S. (Bank here can be a brokerage account, retirement account, etc). The form is information only and is due by June 30 each year. It is not filed with the annual 1040 form (which is also a requirement of all U.S. Citizens no matter where they live), but instead has its own address to where it must be filed (Unlike tax returns which have to be mailed by the due date, the FBAR must be received by the June 30 date).
There is no tax due with the form – its just informational. However, the penalties for non-filing are HUGE. They can be as high as 50% of the highest balance in all accounts during the year. In fact, just this past year, the Department of the Treasury found a widow that had $42,000,000 in unreported accounts in Liechtenstein she had tried to hide by placing them within a wholly owned Panamanian Company. When she was caught she tried to report the accounts, but the Treasury Department was already aware of her non-filing. She was penalized $21,000,000 and, although she appealed, the penalty was upheld. TWENTY ONE MILLION DOLLARS – all for not filing an information return.
Don’t take that chance. Report what you need to report. With Congress trying to get the FATCA treaty enacted all across the world, the information, sooner or later, will be made available to US authorities. Protest yourself – file them timely each year. If you have any further questions about the FBAR form, feel free to email me at firstname.lastname@example.org
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