The deadline for the Foreign Bank and Financial Account Report (FBAR) is fast approaching. The FBAR, referred to in some financial circles as the "F" word, is the form required by the Internal Revenue Service (IRS) to claim certain foreign accounts. The form is due by June 15, 2016, for expatriates and June 30 for taxpayers.
Those who fail to file can face harsh consequences, including steep fines and potential imprisonment.
How do I know if I need to file an FBAR?
An FBAR is required for citizens of the U.S. and resident aliens to report any foreign income when such income exceeds $10,000 at anytime during the filing year. This includes income from trusts, bank accounts and securities as well as signature authority over such accounts.
If you need to file, you are not alone. Over one million taxpayers filed an FBAR during 2015.
How do I file?
U.S. citizens and resident aliens can access and file the FBAR online. Expatriates, or taxpayers that relinquished citizenship to the U.S., are still required to file for 2015 if the relinquishment occurred in 2015. This generally requires use of a dual-status alien return, including a Form 8854 - the Initial and Annual Expatriation Statement.
What do I do if I forgot to file or the IRS contacts me?
Those who failed to file in the past or who have received requests from the Internal Revenue Service (IRS) are wise to seek legal representation. It is also important to note that the FBAR is only one possible reporting requirement. Additional forms may also be required.