Thursday, February 7, 2013

FBAR: Reporting Foreign Accounts To IRS - Part 1

Quick Summary:

You are required to file form FBAR, if you are (1) Resident of US (how to find out) AND (2) You have one ore more foreign bank accounts (outside USA) AND (3) the combined total of all foreign accounts exceeded $10,000 at ANY point of time (even for one day). There are exceptions to this rule (if you are in military, etc).

If the total in all your foreign accounts never exceeded $10,000 anytime last year, then you are not required to file FBAR. As ALWAYS, talk to your CPA; since tax rules are complex and always changing. Some people may also have to submit form 8938 (see difference).

Note: FBAR form is to REPORT taxes to IRS. To actually PAY taxes to IRS, you will use the usual forms (1040, etc). The amount can be reported in the interest section (1099 INT). Again check with CPA. You can submit FBAR form online.

FBAR Overview:

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

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.

On Jan 9, 2012, the IRS reopened the Offshore Voluntary Disclosure Program following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. This program will be open for an indefinite period until otherwise announced.

If you are confused with all this, we have added lots of questions and answers in Part 2 of this article.


Who Must File an FBAR

United States persons are required to file an FBAR if:
  1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
  2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
United States person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Exceptions to the Reporting Requirement

Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:
  1. Certain foreign financial accounts jointly owned by spouses;
  2. United States persons included in a consolidated FBAR;
  3. Correspondent/nostro accounts;
  4. Foreign financial accounts owned by a governmental entity;
  5. Foreign financial accounts owned by an international financial institution;
  6. IRA owners and beneficiaries;
  7. Participants in and beneficiaries of tax-qualified retirement plans;
  8. Certain individuals with signature authority over but no financial interest in a foreign financial account;
  9. Trust beneficiaries; and
  10. Foreign financial accounts maintained on a United States military banking facility.
Look to the FBAR instructions to determine eligibility for an exception and to review exception requirements.

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 tax return or information return questions (for example, on Schedule B of Form 1040, the "Other Information" section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing the FBAR, satisfies the account holder's reporting obligation.

The FBAR is not 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 is an annual report and must be received by the Department of the Treasury in Detroit, MI, at one of the two addresses below, on or before June 30th of the year following the calendar year being reported.

File by mailing the FBAR to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621

If an express delivery service is required for a timely filed FBAR, address the parcel 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.

Electronic Filing for FBAR Forms
On July 18, 2011, FinCEN announced that it has developed an electronic filing system that will accept the FBAR form. E-filing is a quick and secure way for individuals to file FBARs. Filers will receive an acknowledgement of each submission. For more information about FBAR e-filing, read the FinCEN news release.

New Reporting Requirements by U.S. Taxpayers Holding Foreign Financial Assets (Form 8938)
Taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. The new Form 8938 filing requirement does not replace or otherwise affect a taxpayers requirement to file FBAR. A chart providing a comparison of Form 8938 and FBAR requirements, and other information to help taxpayers determine if they are required to file Form 8938, may be accessed from the IRS Foreign Account Tax Compliance Act Web page.

FBAR Assistance
Help in completing Form TD F 90-22.1 (PDF) is available Monday - Friday, 8 a.m. to 4:30 p.m. Eastern time, at 866-270-0733 (toll-free inside the U.S.) or 313-234-6146 (not toll-free, for callers outside the U.S.). 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.



Continue to Part 2 (FAQ): http://topimmigrationnews.blogspot.com/2013/02/fbar-reporting-foreign-accounts-to-irs_7.html

31 comments:

  1. What should you do when someone missed the deadline to file 2013 FBAR?

    ReplyDelete
  2. GMO foods are a big factor in the growing world wide disease epidemic. Frankly, our food is killing us. This article will show you how to eliminate GMO foods from your diet. Diseases like type 2 diabetes, cancer, and inflammation would not be so rampant if we were eating better. Bad Debt Expense

    ReplyDelete
  3. How do you decide https://buycheapcad.com/matlab.html name of your business? You need to consider a lot more than simply what looks or sounds good. For more information, click here.

    ReplyDelete
  4. cleaning supplies should have earth friendly organic ingredients so that they do not harm the environment** surti undhiyu recipe in hindi language

    ReplyDelete
  5. Funeral directors, crematorium owners, and other mortuary business owners can get so caught up in caring for those who are exiting this life that they forget to plan their own life after work. Having a business succession plan for your funeral home is essential in today's economy, especially if you want to get enough money for your business for retirement. Find out what to look for when planning your retirement from the mortuary business and how to find a trusted to professional to help you when you decide to sell. free Minecraft pocket edition

    ReplyDelete
  6. Woh Everyone loves you , bookmarked ! My partner and i take issue in your last point. cash app

    ReplyDelete
  7. There is no written evidence which can tell us exactly who has coined the phrase educational technology. Although developments in educational technology is of recent phenomenon, still plenty of research studies carried out separately in the field of technology and education during different time interval of the human civilization provides us some clues which can be treated as the source to study the history of educational technology. anime app ios

    ReplyDelete
  8. Very educating story, saved your site for hopes to read more! disney plus free membership

    ReplyDelete
  9. some genuinely choice content on this internet site , saved to my bookmarks . showbox

    ReplyDelete
  10. Hello! I’ve been following your blog for a while now and finally got the courage to go ahead and give you a shout out from Kingwood Texas! Just wanted to mention keep up the good work! pokemon go joystick

    ReplyDelete
  11. I simply couldn’t go away your website before suggesting that I actually enjoyed the standard information an individual provide on your visitors? Is gonna be back frequently in order to inspect new posts. free disney plus membership

    ReplyDelete
  12. Really nice style and design and excellent content , nothing at all else we need : D. moviebox pro

    ReplyDelete
  13. I’ve been exploring for a little bit for any high-quality articles or blog posts in this kind of house . Exploring in Yahoo I ultimately stumbled upon this website. Reading this info So i am glad to show that I have an incredibly good uncanny feeling I found out just what I needed. I such a lot indubitably will make certain to do not disregard this website and give it a look on a constant. How to Get PlayStation Plus for Free

    ReplyDelete
  14. Hmm it looks like your website ate my first comment (it was extremely long) so I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog. I as well am an aspiring blog blogger but I’m still new to the whole thing. Do you have any tips and hints for rookie blog writers? I’d really appreciate it. wifi hack

    ReplyDelete
  15. My brother recommended I may like this web site. He was entirely right. This publish actually made my day. You can not consider just how so much time I had spent for this information! Thank you! https://autodesk.prosoftstore.com/

    ReplyDelete
  16. It’s really a nice and helpful piece of info. I’m glad that you just shared this helpful info with us. Please keep us informed like this. Thanks for sharing. pokemon go hack

    ReplyDelete
  17. There couple of fascinating points with time in this post but I don’t know if these center to heart. There’s some validity but I am going to take hold opinion until I explore it further. Excellent article , thanks and we want more! Added to FeedBurner likewise popcorn time android

    ReplyDelete
  18. This is very interesting, You are a very skilled blogger. I have joined your rss feed and look forward to seeking more of your great post. Also, I have shared your site in my social networks! buy instagram followers

    ReplyDelete
  19. This is great content! I am swept away by your presentation and unique viewpoints. I agree with so much of your article. I’ll come back. free eshop codes

    ReplyDelete
  20. Government-Backed Loans - Government loans refer to those loans that are guaranteed by one of two federal agencies. The two types of government loans are: Federal Housing Administration (FHA) loans, and Veterans Administration (VA) loans. The advantage of financing using FHA loans are that they are easier to qualify for and allow a borrower to finance more of the loan amount than non-government loans. Whereas with a Conforming loan a borrower may only be able to finance 80% of the loan amount, a FHA loan allows a borrower to finance 97% of the loan amount. FHA loans are recommended for those borrowers who are first-time buyers, have little money to put down, have a short credit history, or are having trouble qualifying for a Conforming loan. The two main advantages of financing using VA loans are that the VA allows borrowers to finance 100% of the loan amount, and that, the VA only requires proof of veteran status to qualify for the loan. The only drawback to government loans is that mortgage insurance is required at all loan to values (LTV), unlike Conventional and Jumbo loans where payment of mortgage insurance is determined by the amount of equity a borrower has in his home. loans for those with bad credit

    ReplyDelete
  21. A business plan does more than describe your idea for a business venture. It is also a sales tool that portrays both you and your concept as viable and trustworthy. Your business plan is the road map to entrepreneurial success. In it you will provide details about your proposed products and services, the business model, plans for marketing and operations and the financial projections. Your plan will be tailored to the specifics of your nascent business and the audience that must be convinced of its viability, in particular lenders or investors. Car Paint

    ReplyDelete
  22. Highest quality fella toasts, or toasts. will most certainly be given birth to product or service ? from the party therefore supposed to become surprising, humorous coupled with enlightening likewise. best man speaches sketchup 2018 vs 2019

    ReplyDelete
  23. The new Zune browser is surprisingly good, but not as good as the iPod’s. It works well, but isn’t as fast as Safari, and has a clunkier interface. If you occasionally plan on using the web browser that’s not an issue, but if you’re planning to browse the web alot from your PMP then the iPod’s larger screen and better browser may be important. how to get free tickets last day rules survival

    ReplyDelete
  24. Absolutely pent subject matter, appreciate it for selective information . garageband download android

    ReplyDelete
  25. The article posted was very informative and useful. You people are doing a great job. Keep going. onlyfans free premium accounts

    ReplyDelete
  26. Really nice style and design and excellent content , nothing at all else we need : D. dls 2020 mod apk

    ReplyDelete
  27. I must admit that your post is really interesting. I have spent a lot of my spare time reading your content. Thank you a lot! fnaf ar special delivery cheat

    ReplyDelete
  28. I must admit that your post is really interesting. I have spent a lot of my spare time reading your content. Thank you a lot! dragon ball legends mod menu

    ReplyDelete
  29. I found your weblog web site on google and check a few of your early posts. Continue to maintain up the superb operate. I just further up your RSS feed to my MSN News Reader. Searching for forward to studying extra from you in a while!… valentines day gifts

    ReplyDelete

Comment Posting Tips:

1. To estimate when priority date can be current, please see this GC Calculator: http://www.mygcvisa.com/calculator

2. View or add your I-130/I-485/NVC case to GC Tracker: http://www.mygcvisa.com/tracker

3. You can browse or post new questions in GC Forum: http://www.mygcvisa.com/discuss


Comments posted above will only appear in this blog post. Comments posted below will appear across all blog posts:

comments powered by Disqus