June 22, 2020 | FBAR
A Detailed Note – Everything You Need to Know About FBAR Filing
Like filing an annual tax return is the obligation of taxpayers of the United States, filing FBAR is also a duty of every taxpayer of the United States of America who have either $ 10,000 or more overseas financial holdings. Here one thing is noticeable if any US citizen has less than $ 10,000 foreign accounts’ balance but his/her overseas financials touched an amount of $ 10,000 at any point of a financial year, he/she will be liable to file an FBAR.
If someone fails to file his/her FBAR by the deadline or tries to hide his foreign accounts from the IRS, he/she can be harshly penalized. Therefore, it is better to be on the safe side by disclosing your foreign accounts and timely filing your FBAR to the Internal Revenue Service. If you face any difficulties with filing your FBAR or any other issues in your foreign holdings, you can take the help of FBAR tax lawyers. Find and consult FBAR lawyers in New York, they will nicely deal with all your foreign accounts reporting issues.
What Exactly is FBAR?
FBAR stands for “Foreign Bank Account Report.” It was created to keep records of every US citizen who has foreign account holdings. Another motive of creative FBAR was to disclose every tax cheats and money hiding related to offshore financial accounts.
Under the bank secrecy act, everyone who has offshore financial accounts, such as bank accounts, brokerage accounts, and mutual funds is liable to report all foreign holdings to the treasury department. For this, you need to file FBAR on FinCEN form 114. Doing so, you will be on the safe side, but if you hide your foreign accounts, you will be harshly penalized.
Do You Need to File an FBAR?
Every US citizen, resident, corporation, partnership, limited liability company, trust, and estate (who is considered as a taxpayer) with $ 10,000 or more foreign accounts holdings at any point of a financial year needs to file a Foreign Bank Account Report. Keep in mind, whether your foreign accounts’ holdings reach $ 10,000 for a day or a few minutes at any point, you will be liable to report an FBAR. There is another thing to notice if you have multiple foreign accounts with less than $ 10,000 in every account (for instance, $5,000, $4,000, and $3,000 in each foreign account) but your overall foreign holdings touch $ 10,000, don’t think that you can avoid reporting FBAR. You will have to report it. If you do not do so, you could be facing criminal charges and certain penalties.
As per the official website of the Internal Revenue Services, there are some specific cases in which you don’t need to report your financial accounts that are:
Owned by a governmental entity
Owned by an international financial institution
Maintained on a United States military banking facility,
Held in an individual retirement account (IRA) you own or are beneficiary of,
Held in a retirement plan of which you’re a participant or beneficiary, or
Part of a trust of which you’re a beneficiary if a U.S. person (trust, trustee of the trust, or agent of the trust) files an FBAR reporting these accounts.
Now, think where you stand according to this comprehensive information. If you are liable to report FBAR according to these instructions, you must report your foreign accounts to the Treasury Department.
What do You need To File?
There are some specific foreign accounts’ holdings that must be reported to the Treasury Department. Those are as follow:
Foreign stocks and securities held in foreign accounts
Financial accounts held at any foreign branch of any US financial institution
Foreign mutual funds
Foreign life insurance
Foreign brokerage accounts
If you have any of these, you are liable to report all the details of all your foreign financial holdings to the Treasury Department. If you try to hide your foreign account to save your taxes or for any other purposes, you could be harshly penalized.
How to File an FBAR?
The process of filing FBAR is completely different from filing annual tax returns. FBAR is filed to the treasury department, not to the IRS. You must file your FBAR through an electronic system that is named BSA-E-Filing System.
If you want to paper-file your FBAR then you need to call FinCEN’s regulatory helpline number by requesting an exemption from e-filing. If they approve your request, they will send your paper FBAR form and you need to complete and mail that to the IRS
On the other hand, if you want an FBAR lawyer or someone else to file FBAR on your behalf, you must use the form FinCEN report 114a. This will authorize that person to file FBAR on your behalf. However, you don’t need to submit the FinCEN form 114a, you can keep it for your records and show it to the concerned officials upon request.
Hiring FBAR Lawyer
There is no such thing as an FBAR lawyer and FBAR attorney. Every tax lawyer or tax attorney who has comprehensive knowledge about Foreign Bank Account Reports can act as an FBAR lawyer. If you hire FBAR lawyers in New York, you can nicely deal with any types of issues with your foreign accounts reporting. They are expert and experienced lawyers. They know how to deal with any type of complicated FBAR issues. So, if you select them to file your FBAR on behalf of you or hire them to deal with your FBAR issues, you could have a smooth foreign bank account reporting process. You can avoid penalties and criminal charges with the help of an experienced tax lawyer. So, be smart and take assistance from an expert and reliable tax lawyer.