You might have to fill out the Report of Foreign Bank and Financial Accounts (FinCEN Form 114 or "FBAR") every year if you own or have an interest in any foreign bank accounts or other types of financial accounts that are based outside the United States. This report is filed separately from your income tax return, although the two reports can be interrelated.
The Report of Foreign Bank and Financial Accounts was renumbered from Treasury Department Form 90-22.1, the previous form, in 2013. It was renamed FinCEN Form 114.
Reporting Foreign Bank Accounts
You must report accounts you hold in foreign banks and other financial institutions if the total balance across all your accounts is $10,000 or more at any time during the calendar year. Reporting includes accounts of which you're the owner, as well as accounts for which you have authority to conduct transactions on behalf of the account owner.
Report each foreign financial account you own or on which you have signature authority using FinCEN Form 114. You'll provide information on all your financial accounts held in foreign countries, such as the name of the bank or financial institution where the account is held, your account number, and the account balance.
The Foreign Bank Account Report is filed for each account holder. Married couples can file separate reports or a single joint report.
Accounts that have multiple account holders or persons with signature authority might have several persons or businesses reporting the same account on separate foreign bank account reports.
Types of Reportable Accounts
The following types of financial accounts must be reported on the Foreign Bank Account Report if you meet the filing requirement threshold:
- Bank accounts (checking and savings)
- Investment accounts
- Mutual funds
- Retirement and pension accounts
- Securities and other brokerage accounts
- Debit card and prepaid credit card accounts
- Life insurance and annuities having cash value
Income Thresholds for Reporting
There are separate thresholds for being required to disclose foreign accounts. The threshold starts at total foreign account balances of $50,000 on the last day of the year, or $75,000 at any time during the year for Form 8938 purposes. There are higher reporting thresholds for married couples filing jointly and for Americans living abroad.
Statute of Limitations for Reporting
There's a six-year statute of limitations for the assessment of civil penalties for failing to report. The IRS advises that taxpayers should keep their foreign bank account report for six years.
Penalties for Not Reporting
The Treasury Department can impose very stiff penalties for failing to file FinCEN Form 114:
- The penalty is up to $250,000 and/or up to five years in prison for failure to file or to keep records.
- The penalty is up to $500,000 and/or up to 10 years in prison for any person willfully who violates the requirements to file.
- The penalty for giving false information is a fine of $10,000, up to five years in prison, or both.
When to File FinCEN Form 114
FinCEN Form 114 is due June 30 of each year to report foreign bank accounts owned in the previous calendar year. FinCEN requires that Form 114 be filed electronically.
The IRS indicates that you should file as soon as possible if you're late filing Form 114, perhaps because you didn't realize that you had to. The filing system allows you to enter previous calendar years. You can explain why you're late.
Where to File FinCEN Form 114
A blank copy of FinCEN Form 114 can be downloaded from the Financial Crimes Enforcement Network's FBAR E-Filing page. Click on the link for FinCEN Report 114. The Report is filed directly with the Financial Crimes Enforcement Network (FinCEN), which is part of the US Treasury Department. FinCEN requires that foreign bank account reports be filed through the FinCEN website.
You can call the FinCEN Regulatory Helpline at 800-949-2732 (toll-free inside the United States) if you need an alternative to electronic filing. Call 703-905-3975 from outside the U.S. This line is not toll-free.
Coordinating FBAR with Your Return
The foreign bank account report isn't a tax form and it's not submitted to the IRS, but information relating to the foreign bank accounts might have to be coordinated with information on your tax return.
Income generated inside these foreign financial accounts is reported on the tax return for the year in which the income is earned. You'll report the foreign income based on the type of income being generated. For example, interest and dividends would be reported on your Schedule B, whereas capital gains would be reported on your Schedule D.
Be sure to check the box in Part III, Line 7a of Schedule B, and indicate the country or countries where you have accounts if you earn dividends or interest in these accounts.
You might have to file Form 8938, Statement of Foreign Financial Assets, with your tax return in some cases. This tax form is separate from the foreign bank account report, although it contains similar information.
Exceptions to Filing
You don't have to report accounts held at U.S. military banking facilities, even if they're located in foreign countries. Military banks are considered to be domestic U.S. banks.
You also don't have to report U.S.-based accounts held by a branch or division of a foreign bank.
Where to Get Technical Help
Americans can receive help with their foreign bank account reports by calling the IRS at 866-270-0733 (toll-free inside the United States) or 313-234-6146 (not toll-free for callers outside the U.S.). This telephone hotline is available Monday through Friday, 8 a.m. to 4:30 p.m. Eastern Time.
You can also email FBAR-related questions to FBARquestions@irs.gov.
Contact BSAEFilingHelp@fincen.gov or by calling the BSA E-Filing Help Desk at 866-346-9478 (toll-free inside the United States) for assistance with electronic filing questions. The E-Filing Help Desk is open Monday through Friday from 8 a.m. to 6 p.m. Eastern Time.
Additional questions regarding these issues should be addressed to the IRS toll-free tax assistance line at (800) 829-1040, which is the general hotline for the IRS. The agency has also established a special hotline specifically to address foreign bank account reporting issues at (866) 270-0733 (toll-free) or (313) 234-6146 (not toll-free).
- You are required to report financial account information to the IRS, including foreign accounts, if in the course of the year you had over $10,000 in total holdings.
- The reporting threshold applies to all types of financial institutions such as banks, mutual funds, investment accounts, retirement funds, life insurance, etc.
- Failure to report foreign accounts can result in severe fines, and even imprisonment.
- Though filing the FBAR is a separate process than filing your tax return, it may be useful to coordinate since they can share information.
Frequently Asked Questions (FAQs)
Do foreign banks report to the IRS?
There are a number of ways that the IRS receives information about offshore accounts. Under the Foreign Account Tax Compliance Act, over 189,000 foreign financial institutions in over 110 countries routinely report activity by U.S. account-holders to the IRS.
What does FBAR stand for?
An FBAR is your Foreign Bank Account Report, and it's the form you must file to report an overseas account. It's also called the FinCEN (U.S. Treasury’s Financial Crimes Enforcement) Form 114.
How much money can I have in overseas accounts before I have to report it?
If the sum of all your accounts (including both foreign and domestic) exceeds $10,000 at any time during the year, then you have to report each account to the IRS.