What is FBAR (Foreign Bank Account Report)?

How it works

The FBAR is FinCEN Form 114, filed annually by US persons who have a financial interest in (or signature authority over) one or more foreign financial accounts whose aggregate maximum balance exceeds USD 10,000 at any point during the calendar year.

Two important details:

• Aggregate — sum of maximum balances across all foreign accounts, not per account.
• Any point during the year — even a single day above $10,000 aggregate triggers the filing requirement for the whole year.

Reportable accounts include: bank accounts, brokerage accounts, mutual funds, pension accounts, certain insurance policies with cash value. Crypto exchanges have been the subject of ongoing FinCEN guidance (proposed rules issued 2020, implementation status varies).

Who must file

• US citizens (regardless of where they live).
• US resident aliens (green card holders + those passing SPT).
• US-formed entities (corporations, LLCs, partnerships) with foreign accounts.
• Trusts and estates with US-person status.
• Signatories with signature authority over foreign accounts (even with no financial interest), with limited exceptions.

Filing mechanics

• Filed via the BSA E-Filing System at bsaefiling.fincen.treas.gov — not with the IRS, not with your tax return.
• Standalone filing — separate from Form 1040.
• Deadline: 15 April following the calendar year, with automatic extension to 15 October.
• No paper option — electronic filing only.

FBAR vs Form 8938 (FATCA)

The two are commonly confused but separate filings with different thresholds:

A US person with substantial foreign holdings often files both — they're complementary, not alternative.

Streamlined and Voluntary Disclosure programs

The IRS offers Streamlined Filing Compliance Procedures for taxpayers whose failure was non-willful — file the past 6 years of FBARs + amended 3 years of returns + sworn statement. Reduced or zero penalty.

Beyond streamlined, the Voluntary Disclosure Program (VDP) handles willful non-compliance — disclosure in exchange for criminal protection but with substantial penalties.

Examples

• US citizen consultant in Dubai with $50k in a UAE bank. $50k > $10k threshold → FBAR required annually. Files FinCEN 114 by 15 April (or 15 October with extension). Account also potentially in scope for Form 8938 depending on filing status thresholds.
• US citizen in Paris with €5,000 in a French savings account. €5k = ~$5,400 — below $10k aggregate. No FBAR required. But if she also has a €4,000 brokerage account = aggregate ~$9,700 — still below. Add a third account at €2,000 = aggregate ~$11,800 → FBAR required for that year.

Common mistakes

• Confusing FBAR with FATCA Form 8938. Different forms, different filing systems, different thresholds. Both can apply.
• Forgetting signature-authority accounts. A US person with signature authority over an employer's foreign account may need to file FBAR even with no financial interest.
• Missing the FinCEN BSA portal. FBAR is not filed with the IRS — different system entirely.
• Treating FBAR as low-risk paperwork. Penalties are severe and the IRS / FinCEN are aggressive on enforcement, especially for HNW profiles.