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Foreign Bank Account Reporting

October 13, 2012

FBAR, or Reports of Foreign Bank & Financial Accounts, is a compulsory tax report that all US citizens living abroad must file on or before June 30 of each year. Many are not aware they are required to file their FBAR along with their US expat taxes.  FBAR can be complied by filing a TD F 90-22.1 form and then submitted to the US Treasury Department.

Tax Obligations of all Americans Living Overseas

It is only when the total amount of your money in foreign banks exceeds $10,000 that you need to file for a FBAR along with your US expat tax. It is important to take note that $10,000 is the sum of all your foreign bank accounts, not just one. This means that if you have $2,000 each, in six foreign banks, you are required by law to file a FBAR.

The United States Treasury Department is authorized to impose penalties to American citizens living abroad who did not file their FBAR. The penalties vary from each scenario but it can be as minor as paying fines and as severe as being jailed. Hiding assets overseas is a violation of the law and the IRS monitors and enforces serious jail penalties for those who are caught.

There are special exemptions such as reduced penalty fees to those who are late in filing their FBAR. Such exemptions are extended to those who do not have any records of delinquency or those who have filed their FBAR for the first time.

No other deadline extension is granted to those who are late in filing their FBAR. While it is true that the IRS will accept your tax returns when postmarked, the US Department of Treasury has a different and stricter rule. All FBAR must be filed on the Date Received which means that you should take into consideration the amount of time your returns reach and filed in the Treasury Department. For example, if you live in the Philippines and it takes 3 days for your FBAR to arrive in the Treasury, filing well ahead of the June 30th deadline is necessary.

All hard copy of FBAR must be mailed to the address below:

Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621

Express Mails should be sent to this address:

IRS Enterprise Computing Center
ATTN: CTR Operations
Mailroom, 4th Floor
985 Michigan Ave
Detroit, MI 48226

More information can be found at irs.gov or by contacting Kathleen M Egan CPA PLLC at (602) 569-1003.

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