Explaining FBAR Basics in Under 10 Minutes - Golding & Golding, Board-Certified Tax Law Specialist

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The US Government requires US Taxpayers who own foreign assets and accounts to disclose this foreign account information on FinCEN Form 114 -- otherwise known as the FBAR -- in addition to filing a US Tax Return. FBAR refers to the Report of Foreign Bank and Financial Accounts, which is filed by US Persons on FinCEN Form 114 and enforced by the Internal Revenue Service in accordance with Money and Finance (not Internal Revenue Code) section 5314 et seq. Unlike other international information reporting forms, the FBAR is not a Tax Form. Still, the IRS is tasked with assessing and enforcing FBAR Penalties -- which has been a US Government compliance priority for several years now. Foreign Bank and Financial Account violations may result in Civil and/or Criminal FBAR penalties -- although criminal penalties are rare. Usually, the US Person will get hit with civil penalties, which can range extensively. To reduce or avoid these penalties the IRS has developed several amnesty programs, collectively referred to as offshore voluntary disclosure. We have prepared a summary explaining the basics of the FBAR, who has to file, and when.