If you have a financial interest in a foreign finanical account, you may be required to file Form 114 (FBAR) by June 30th. Form 114 is not a tax form, and is not filed with the IRS. The form must be filed electronically and must be filed online through the BSA (Bank Security Act) E-filing system website.
In general, you must file Form 114 if you had an interest in, or signature or other authority over foreign financial accounts that had an aggregated value that exceeded $10,000 at any time in 2015.
Form 114 must be filed by:
U.S. Citizens, U.S. residents, and entities, including but not limited to – corporations, partnerships and limited liability companies created or organized in the United States.
Reporting and Filing Information
A person who has a foreign account may have a reporting obligation even when the account produces no taxable income. The reporting obligation is met by answering questions on a tax return about foreign accounts (for example, the questions about foreign accounts on Form 1040 Schedule B) and by filing an FBAR. The FBAR is a calendar year report and must by filed on or before June 30 of the year following the calendar year being reported.
U.S. Taxpayers May Also Need to File 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, which is filed with an income tax return. Those foreign financial assets could include foreign accounts reported on an FBAR. The Form 8938 filing requirement is in addition to the FBAR filing requirement
Potential fines and penalties for not filing FBAR Form 114
There are quite severe potential penalties for not filing Form 114. 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 nonwillful violations that are not due to reasonable cause. For willful violations, the penalty may be the greater of $100,000 or 50 percent of the balance in the account at the time of the violation, for each violation.
Help Filing FBAR Returns
Freeman Tax Law has decades of experience helping people get and stay in compliance with all offshore reporting requirements. If you need help with FBAR, Form 114, Form 8938, or have any questions concerning your foreign financial holdings – please contact us. The initial consultation is complimentary, and of course all communications will be held in the strictest of confidence.