Purpose Of The FinCEN Form 114, Report of Foreign Bank and Financial Accounts
BSA FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), reports financial interest in or signature authority over foreign financial accounts. Form 114 must be e-filed with the Treasury Department via its BSA E-Filing System. It is an information return only, meaning it will have no information on the filer’s tax liability.
What Is The FinCEN Form 114 Deadline?
This form has an annual filing requirement.
If you are not able to file the form before the regular due date of April 15, the IRS is currently automatically extending the deadline to October 15. This is the same standard six-month extension available for your income tax return.
Who Must File The FinCEN Form 114?
A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 (the taxpayer must aggregate the highest value of each individual account during the calendar year) at any time during the calendar year.
A United States person means United States citizens; United States 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. It does not include non-residents of the United States.
What Is A Foreign Financial Account For The FinCEN Form 114?
A foreign financial account is a financial account located outside of the United States.
A financial account includes:
- Financial (deposit and custodial) accounts held at foreign financial institutions, such as a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution)
- Financial account held at a foreign branch of a U.S. financial institution
- Foreign financial account for which you have signature authority
- Indirect interests in foreign financial assets through an entity if sufficient ownership or beneficial interest (i.e., a greater than 50 percent interest) in the entity
- A commodity futures or options account
- Shares in a mutual fund or similar pooled fund (i.e., a fund that is available to the general public with a regular net asset value determination and regular redemptions)
- Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor
- Foreign-issued life insurance or annuity contract with a cash-value
- Foreign retirement plan that is a personal or individual account plan
Penalties For Not Filing The FinCEN Form 114
The penalties for not filing the FinCEN Form 114 are harsh.
A person who is required to file an FBAR and fails to properly file may be subject to a civil penalty not to exceed $10,000 per violation. If there is reasonable cause for the failure and the balance in the account is properly reported, no penalty will be imposed.
A person who willfully fails to report an account or account identifying information may be subject to a civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation.
In addition, there can also be criminal penalties of up to $250,000 or 5 years in jail or both.
If a person has willfully failed to report and is engaging in a certain pattern of illegal activity, criminal penalties are increased up to $500,000 or 10 years in jail or both.