FBAR is the annual report of certain foreign financial accounts filed electronically on FinCEN Form 114. It is submitted to the U.S. Treasury Department and is not attached to a federal income tax return.
Who must file an FBAR?
A U.S. person generally must file if the person has a financial interest in, signature authority over, or other authority over at least one financial account outside the United States and the aggregate value of all reportable foreign financial accounts exceeded $10,000 at any time during the calendar year.
U.S. persons include U.S. citizens and residents, as well as corporations, partnerships, limited liability companies, trusts, and estates formed under U.S. law.
The $10,000 threshold applies to the combined maximum value of all reportable foreign accounts—not to each account separately.
Which accounts may be reportable?
- Foreign bank checking and deposit accounts
- Foreign brokerage and securities accounts
- Foreign mutual funds and certain pooled funds
- Entity accounts in which the filer has a financial interest
- Accounts over which the filer has only signature authority
- Reportable accounts even when they produced no income
The absence of income does not eliminate an FBAR filing requirement. Certain retirement, governmental, international institution, trust-beneficiary, and consolidated-reporting exceptions may apply, so each account should be reviewed separately.
How is the $10,000 threshold measured?
Determine each account’s highest value during the year. Convert foreign-currency values to U.S. dollars using the Treasury year-end exchange rate, then consider the aggregate value of all reportable accounts.
Example: One account reached $6,500 and another reached $4,200. Their aggregate maximum value is $10,700. An FBAR may be required even though neither account individually exceeded $10,000.
How is an FBAR filed?
FBARs are filed electronically through FinCEN’s BSA E-Filing System. They are not filed with the IRS as part of the federal income tax return. If another person files on your behalf, FinCEN Form 114a may be used to authorize that filer; Form 114a is retained in your records rather than submitted with the FBAR.
What records must be retained?
Records should identify the name on the account, account number, name and address of the foreign financial institution, type of account, and maximum annual value. The IRS generally requires these records to be retained for five years from the FBAR due date.
Is FBAR the same as Form 8938?
No. FBAR is a separate Bank Secrecy Act report filed with FinCEN. Form 8938 is filed with a federal income tax return to disclose specified foreign financial assets. The thresholds, covered assets, and filing procedures differ, and some taxpayers may be required to file both.
What if the deadline was missed?
FBAR reporting and recordkeeping violations may result in civil monetary penalties and, in some cases, criminal penalties. Treatment depends on the facts, including the nature of the violation and whether reasonable cause exists. If the IRS has not contacted you and you are not under examination, delinquent filing options should be reviewed promptly.
Do not test the filing requirement using year-end balances alone. Review each account’s maximum annual value, joint accounts, and accounts over which you have signature authority.
Official Sources
This guide reflects the following official IRS and FinCEN guidance available as of its publication date.
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Contact us →This material is provided for general information only and is not tax or legal advice. FBAR obligations depend on ownership, signature authority, filer status, and available exceptions. Your circumstances should be evaluated separately.