US persons with a financial interest or signature authority over a foreign financial account exceeding $10,000 at any time during a calendar year (with limited exceptions) must file a Report of Foreign Bank and Financial Accounts (FBAR) with the Treasury Department by June 30 of the succeeding year. This requirement often applies to investment funds and/or officers or employees of such funds. Currently, there is an exception to filing for employees and officers of certain financial institutions who have signature or other authority, but no financial interest in the foreign account.
In 2013, the Financial Crimes Enforcement Network (FinCEN) introduced FinCEN Form 114, which supersedes TD F 90-22.1, the FBAR form used in 2012 and prior tax years. US taxpayers with FBAR filing requirements must electronically file Form 114 by the deadline or face civil penalties, including fines of up to $10,000 per violation. Willful non-filing violations could result in criminal penalties and fines of $100,000 or 50% of the balance in the account (whichever is greater).
Click here to download an overview of the Report of Foreign Bank and Financial Accounts with frequently asked questions to help you understand its impact on you and your business.