Notable Exceptions to FBAR Filing Requirements
Aug 21, 2017
It is important to note that certain U.S. persons or foreign financial accounts are excluded from the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (more commonly known as the "FBAR") reporting requirements. These include:
- U.S. persons that are entities included in a consolidated FBAR filed by a greater-than-50% owner;
- Individuals with signature authority over, but no financial interest in, a foreign financial account if the individual is an officer or employee of the entity that owns or maintains the account in certain situations (e.g., an officer or employee with signature authority over an account of a financial institution that is registered with and examined by the SEC or Commodity Futures Trading Commission);
- The spouse of an individual who files an FBAR is not required to file a separate FBAR if: (1) all the financial accounts that the nonfiling spouse is required to report are jointly owned with the filing spouse; (2) the filing spouse reports the jointly owned accounts on a timely filed, electronically signed FBAR; and (3) the filers have completed and signed Form 114a, Record of Authorization to Electronically File FBARs;
- Financial accounts maintained on a U.S. military installation.
- Correspondent/nostro accounts (i.e., bank accounts established by banks solely for bank-to-bank settlements);
- Foreign financial accounts owned by a United States governmental entity;
- Foreign financial accounts owned by an international financial institution (if the U.S. government is a member);
- Owners and beneficiaries of IRAs do not have to report foreign financial accounts held in an IRA;
- Participants in and beneficiaries of tax-qualified retirement plans are not required to report a foreign financial account held by or on behalf of the retirement plan;
- Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust);
Thus, it is important to determine if you have to file an FBAR or fit within one of the above-listed exceptions. A logical starting point is to use the FBAR Wiz app to quickly and easily determine if you have an FBAR and/or a Form 8938 filing obligation - just click the "get started" link above to anonymously determine if you have a filing obligation.