FBAR (Foreign Bank Account Report), also known as FinCen 114, is a mandatory requirement for all individuals residing in the US, regardless of citizenship status. If you held over $10,000 in total across foreign bank accounts at any point during the year, you must file FBAR.
FBAR is solely a reporting obligation and does not impose taxes on foreign funds. However, failure to comply can result in substantial penalties which is listed below:
- Non-Willful Violations: Failure to file FBAR due to negligence or inadvertence can result in a penalty of up to $12,921 per violation for each year.
- Willful Violations: Willful failure to file FBAR or knowingly providing false information can lead to severe penalties. The penalty can be as high as the greater of $129,210 or 50% of the balance in the account at the time of the violation, for each violation year.
- Criminal Penalties: In addition to civil penalties, criminal penalties may also apply for willful violations, including fines and potential imprisonment.
- Mitigation Factors: The IRS considers various factors when determining penalties, including the taxpayer’s history of compliance, the amount of funds involved, and the circumstances surrounding the non-compliance.
- Reasonable Cause Exception: Penalties may be waived if the failure to file FBAR was due to reasonable cause rather than willful neglect.
If you are unfamiliar with FBAR requirements or have yet to file, contact us promptly. Our team specializes in FBAR filing processes and necessary documentation. We provide comprehensive assistance in completing and submitting the FinCen 114 application online, ensuring full compliance and peace of mind throughout the process.
For any questions regarding FBAR filing, consult our tax experts today. We are dedicated to offering expert guidance and support.