Do You Have a Foreign Financial Account?

If you own or have authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, you may be required to report the account yearly to the Internal Revenue Service. Under the Bank Secrecy Act, each United States person must file a Report of Foreign Bank and Financial Accounts (FBAR), if

1. The person has a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country and
2. The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

Who Must File an FBAR

United States Person: Refer to the definition of "United States person" found in the July 2000 version of the FBAR. Under this definition, the term "United States person" means (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.

Note: Announcement 2010-16 temporarily suspends, for persons who are not United States citizens, United States residents or domestic entities, the requirement to file Form TD F 90-22.1 for the 2009 and earlier calendar years. The Announcement supplements and supersedes Announcement 2009-51.

Note: Notice 2010-23 provides relief for some persons with signature authority, or other authority, and who own commingled funds. The Notice modifies and supplements Notice 2009-62.

Reporting and Filing Information

A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income. Checking the appropriate block on FBAR-related federal income tax return questions (found on Form 1040 of Schedule B, the "Other Information" section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, satisfies the account holder's reporting obligation.

The FBAR is not to be filed with the filer's Federal income tax return. The granting, by the IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR. You may not request an extension for filing the FBAR. The FBAR must be received by the IRS on or before June 30 of the following year. File by mailing the FBAR to:

U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621.

If an express delivery service is used, file by mailing to:

IRS Enterprise Computing Center
ATTN: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, MI 48226

Delivery messenger service contact telephone number: 313-234-1062

Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.

Exceptions to the Reporting Requirement

Exceptions to the reporting requirement can be found in the FBAR Instructions. These exceptions include:

1. Accounts in U.S. military banking facilities operated by a United States financial institution to serve U.S. Government installations abroad are not considered to be accounts in a foreign country for purposes of the reporting requirement.
2. An officer or employee of a bank that is subject to the supervision of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation, is not required to report having signature or other authority over a foreign account if the officer or employee has no personal interest in the account.
3. An officer or employee of a domestic corporation whose equity securities are listed on a national securities exchange or which has assets exceeding $10 million and 500 or more shareholders of record, is not required to report having signature or other authority over a foreign account if the person has no personal financial interest in the account, and the officer or employee has been advised in writing by the chief financial officer of the corporation that the corporation has filed a current report that includes the foreign account.

Proposed Changes to FBAR Reporting and Instructions

On February 26, 2010, the Treasury Department issued a Notice of Proposed Rulemaking (NPRM) proposing to revise regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts. The Treasury Department also issued draft instructions to the FBAR which accompanied the NPRM.

Written comments on the NPRM and draft instruction may be submitted to the Financial Crimes Enforcement Network (FinCEN) on or before April 27, 2010.

FBAR Assistance

Help in completing Form TD F 90-22.1 (PDF) is available at 800-800-2877, option 2. The form is available online at IRS.gov and Financial Crimes Enforcement Network Web site or by telephone at 800-829-3676. Questions regarding the FBAR can be sent to FBARquestions@irs.gov.

References/Related Topics

• Workbook on the Report of Foreign Bank and Financial Accounts (FBAR)
• FAQs regarding Report of Foreign Bank and Financial Accounts (FBAR)
• Bank Secrecy Act
• Voluntary Disclosure

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