Individuals and legal entities who are domiciled in the United States or who are fiscal residents of the country and have a direct or indirect interest in financial accounts or financial applications outside the US need to be aware of another obligation due to the Internal Revenue Service: it is mandatory to complete and submit the Report of Foreign Bank Accounts and Financial Accounts, the FBAR, until April 15.
Who is subjected to FBAR
The obligation applies to those who have final interest or signature authority over financial accounts or investments outside the US territory whose added value is equal to or greater than US$ 10,000.00.
Signature authority is the authority that an individual (alone or in conjunction with another individual) has to control assets held in a foreign financial account by means of direct communication (either in writing or otherwise) with the bank or other financial institution which maintains that account.
The financial account includes, but is not limited to, securities, brokerage, savings, demand, checking, deposit, time deposit or other account maintained with a financial institution (or person performing the services of a financial institution).
A financial account also includes a commodity futures or options account, an insurance policy with cash value (such as a whole life insurance policy), an annuity policy with cash value and shares in a mutual fund or similar pooled fund (a fund that is available to the general public).
The deadline for submitting the form to the IRS is April 15 of each year. If it is not delivered by this day, the deadline is automatically
extended to October 15.
Penalties for failing to deliver the statement or providing incomplete or incorrect information may amount to US$ 100,000.00 or 50% of account balances (whichever is greater).
Need help declaring the FBAR or are you still having doubts? Contact us firstname.lastname@example.org