This is a follow-up to a post we did in March on offshore account disclosure.
As we noted in our March 14 post, disclosure requirements for foreign accounts are becoming more complicated.
It isn’t only that the Report of Foreign Bank and Financial Accounts (FBAR) is still required to be filed – usually by June 30 each year – for offshore accounts of $10,000 or more. A new law, the Foreign Account Tax Compliance Act (FATCA) has added to the compliance burden not only for taxpayers, but for banks and other financial institutions.
In this post, we will take note of two points. One is that there is a different form for the FBAR this year. The other is that the FBAR filing requirement applies not only to U.S. taxpayers, but also to those with “signature authority” over an offshore account that meets the $10,000 threshold.
First, let’s update you on the change in the FBAR form. The old form was TD F 90-22.1. The new one is FinCEN Form 114. It must be filed online.
It is important to keep in mind that this filing requirement does not only apply to individuals with foreign accounts valued at $10,000 or more at any point during the previous calendar year. It also applies to other entities bedsides individuals, including corporations, partnerships and LLCs, as well as trusts and estates.
Moreover, it isn’t only an ownership interest that can trigger the filing requirement. Having signature authority over an offshore account can also do so.
We should also point out that, for individuals, it isn’t only U.S. citizens who may be subject to the FBAR requirement if their accounts are large enough. U.S. residents who don’t have citizenship, such as those who are here on a green card or other visa, may be required to file as well.
Source: IRS.gov, “Report of Foreign Bank and Financial Accounts (FBAR),” Accessed June 17, 2014