Report of Foreign Bank and Financial Accounts, also known as FBAR is a mandatory document to submitted to the Department of Treasury if you hold foreign accounts over $10,000. The IRS is questioning some HSBC and Swiss accounts which hold unaccounted money all over the world. The recent guilty pleas and discoveries may lead to huge penalties and criminal punishment.
FBAR
The United States government mandates that all tax payers must submit FBAR if they hold any foreign account in any other country. All citizens, residents, and visitors who pay tax to the United States government must submit FBAR if they hold a foreign account exceeding $10000 in an year.
The tax payers need not submit with federal tax return but must send a separate mail to the Department of Treasury. FBAR form or the TD F 90 -22.1 can be downloaded from the IRS website. The pdf file allows you to enter and save the data. The basic details which you need to fill include:
- Type of Filer
- First and Last Name
- SSN
- Date of birth
- Passport Number
- Country
- Address
- Bank account number and type
- Bank address and contact
- Maximum amount held in the account in the year
You may have to declare all the multiple accounts which you have under your spouse’s name or dependent’s name. Convert the exchange rate in that year and fill the amount in US dollars.
Exceptions and Disclosures
FBAR has some exceptions which need not be declared. For example, norso accounts – banks linked with your current account need not be declared. All the accounts that are owned by a government agency or retirement accounts need not be declared.
The IRS has extended voluntary disclosures if you missed submitting FBAR in the past. You may declare and pay any late penalties to avoid any criminal charges.
Filing
Filing the form is simple as downloading the form, entering all the details, printing., and signing the form. Mail the form to United States Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621. You may call 800-800-2877 after ninety days to confirm the receipt of the form. Note that the deadline to submit an FBAR is June 30 in 2011. There is no extension.
Small businesses and Self-employed tax payers may have to follow separate forms and declarations. In any case, the IRS is watching all your accounts and be cautious! 🙂
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