A detail that can cause lots of IRS problems
The Foreign Bank and Financial Report (FBAR) is a reporting requirement that is getting lots of attention from the IRS. Here is what you need to know.
Do you have any foreign bank accounts or assets held outside the United States?
Are you a beneficiary of, or a responsible party for someone else who has assets held in non-United States based accounts?
If you answered yes to either of these questions you may be impacted by FBAR disclosure requirements.
The requirements come in two forms;
Information reporting. If you hold $10,000 or more in foreign-based accounts or you have signature authority over similar accounts you must report this information each year. The filing requirement is separate from your tax return and is due by June 30th following the reporting year. Failure to file this report can cause substantial penalties. Willful disregard to this filing requirement can even lead to criminal prosecution.
Tax reporting. In addition to the annual FBAR reporting requirement, you may also need to file this information with your tax return. Tax rules in this area can be complex so it pays to seek guidance regarding your situation.
This is now a major area of focus for the IRS. So if it applies to you it pays to seek advice to be certain you are in compliance with the FBAR requirements.
Want more information? Here is a link to the IRS FBAR reporting requirements web page.