FBAR Requirements

Wednesday, February 17, 2016

FBAR, known as Report of Foreign Bank and Financial Accounts, are meant for U.S. taxpayers who hold international bank accounts, mutual funds and trusts. Taxpayers with foreign financial accounts or Americans living overseas with foreign bank accounts or other assets need to file an FBAR online, since the paper forms are not being used anymore, in order to report their financial status. FBARs are also required of U.S. citizens if they serve in the United States military in a base outside the U.S. This process if in place so that all U.S. taxpayers will file their federal income tax returns even if the accounts are outside the contiguous United States.  FBARs are required by law for all U.S. citizens even in they pay local taxes in the foreign country they live in.  As part of the FBAR requirement, if someone has over $10,000 in a foreign bank account, then there needs to be an FBAR filed. The FBAR is in addition to a federal income tax return.  If taxpayers with offshore bank accounts do not follow the requirements, then they can face IRS audits which lead to penalties. 

The Strategic Tax Lawyers are tax relief lawyers who specialize in FBARs. Advice for taxpayers who have international bank accounts at any time during the year will be required to file an FBAR. If a taxpayer is not in the U.S. during tax season, they are still responsible for filing their tax return and they must report their entire foreign income held in overseas bank accounts.  Any global income earned is subject to income taxes.  

When filing an FBAR, taxpayers need to report the correct exchange rate on their tax return in U.S. dollars if the income is earned in the country’s foreign currency. The tax relief lawyers recommend using the average exchange rate on the FBAR so that the income is accurately reported that year.  If any income was earned on specific days,  then the exchange rates can be used for those specific days. 

FBAR requirements can be confusing or complex, so it may be best to consult with an experienced IRS tax attorney or tax relief lawyer, such as the Strategic Tax Lawyers. 

If you are a U.S. citizen with foreign assets who think they have a tax obligation, contact the Strategic Tax Lawyers at (800) 669-4775.  The Strategic Tax Lawyers can provide taxpayers with a free consultation to discuss the FBAR and your options.