If your business has a foreign subsidiary and/or you have a foreign bank account, you are required to report that money overseas to the government.
This sort of filing requires information on the following:
- Bank account numbers and balances
- Bank contact information
- Ownership information
Who is required to file?
United States persons are required to file an FBAR if:
- 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
- the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
United States person includes U.S. citizens; U.S. 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.
What are the consequences if I fail to file the FBAR form?
Those required to file an FBAR who fail to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50% of the balance in the account at the time of the violation, for each violation.
Please note that FBAR filing may incur an additional fee.
Additional information on FBAR form, FinCen 114, Report of Foreign Bank and Financial Accounts is available from the IRS here: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR.
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