FBAR Filing Requirements You Do Not Want to Ignore

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Do you have overseas financial interest or assets worth $10,000 or more? If the answer is yes, you probably need to file an annual report of Foreign Bank and Financial Accounts (FBAR). Fail to do this, and you may face serious civil and even criminal penalties. The late filing doesn’t mean the IRS will immediately come after you. But why risk a headache?

Here are five foreign asset filing requirements you should not ignore if you have overseas financial accounts:

  1. If you have complete or partial authority over one or more foreign corporations, report this in Form 5471.
  2. File reportable partnerships and accounts in foreign companies and organizations in Form 8865.
  3. File specific foreign trust events and authority, as well as hefty foreign provisions or contributions, in Forms 3520, 3520-A.
  4. File specified foreign financial assets surpassing stated thresholds in Form 8938.
  5. If you have a specified financial interest in or signature authority over a foreign financial account, checking the YES box on Schedule B will direct you to a possible FBAR filing. This applies to individuals, partnerships, corporations, tax-exempt entities, and estates/trusts. Note: This question is found on Schedule B (Part Three), Form 1040A or 1040 of the Individual Income Tax Return, Schedule B (Item 10), Form 1065 on the Return of Joint Income, Schedule N (Item 6a), Form 1120 of the Corporation Income Tax Return, Part Four (Item 4a), Form 990 of Return of Organization Exempt from Income Tax, and Schedule G (item 3) in the other information Section of Form 1041 of the U.S. income tax Return of Estates and Trusts.

If you have further questions or concerns about any of the above requirements, contact the Highland Tax Group team at 720-398-6088 or visit the Highland Tax Group website to get the support that you need. Our experience in FBAR filing requirements can help prevent issues with the IRS.