Who has to file an FBAR?

Start with U.S. person status

U.S. citizens generally remain subject to the FBAR rules while living abroad. Resident individuals and entities formed under U.S. law, including corporations, partnerships, and LLCs, can also have obligations. Residency for FBAR purposes requires its own analysis; do not assume that filing a nonresident income tax return under a treaty automatically eliminates FBAR reporting. A foreign citizen does not become exempt merely because the accounts existed before moving to the United States.

Identify accounts and your relationship to them

Foreign bank, securities, and certain other financial accounts can qualify. Account location matters more than the bank’s nationality: an account at a foreign branch of a U.S. bank is generally foreign, while one at a U.S. branch of a foreign bank generally is not. Financial interests can include accounts held through certain entities, and signature authority can trigger reporting without ownership. Joint ownership and accounts held for someone else require attention rather than an assumption that another person will report them.

Apply the combined threshold

Review all reportable accounts together, even accounts with small balances or no income. If their aggregate value exceeds $10,000 during the year, report each required account, not just the account that pushed the total over the limit. Determine each account’s maximum value from reliable records and convert foreign currency using the applicable year-end Treasury exchange rate under the FBAR instructions. The test is not limited to the December 31 balance.

Separate reporting from tax

The FBAR is a financial disclosure, not a calculation of tax on account balances. Interest, dividends, and other income may separately belong on an income tax return. Form 8938 has different coverage, thresholds, and filing rules; filing either report does not automatically satisfy the other. Certain exceptions or coordinated reporting rules may apply, so review both rather than duplicating assumptions. Keep the records supporting the accounts, values, and any exemption claimed.

Common mistakes

• Testing each account against $10,000 separately.
• Ignoring an account because it earned no income or was closed during the year.
• Assuming Form 8938 replaces the FBAR.

Filing requirements

• File FinCEN Form 114 electronically through the BSA E-Filing system, separately from the federal tax return.
• The regular due date is April 15, with an automatic extension to October 15; retain required account records for five years.

Potential penalties

• Failure to file or maintain required records can lead to significant civil penalties; willful violations can also create criminal exposure.
• If prior reports are missing, evaluate the appropriate compliance procedure before submitting them. Relief depends on the facts.

Related IRS forms

• FinCEN Form 114
• Form 8938

What to consider next

• Inventory all foreign accounts and identify owners and authorized signers.
• Collect annual statements and maximum balances, then check Form 8938 separately.
• Ask Chirino USA to review exceptions and any missing years before filing.