Don’t Get FBAR-ed: A Guide to Foreign Account Reporting

Why Foreign Bank Account Reporting Matters for Your Financial Future

Foreign bank account reporting is a legal requirement for U.S. persons with foreign financial accounts exceeding $10,000 in total value at any point during the calendar year. Here’s what you need to know:

Quick Answer: Do You Need to File an FBAR?

1. Check Your Accounts – Add up all foreign bank accounts, brokerage accounts, and certain other foreign financial accounts
2. Calculate the Threshold – If the combined total exceeded $10,000 at any time during the year, you must file
3. File FinCEN Form 114 – Submit electronically through the BSA E-Filing System by April 15 (automatic extension to October 15)
4. Keep Records – Maintain documentation for five years from the filing deadline

The Foreign Bank Account Report (FBAR), officially known as FinCEN Form 114, is not a tax form—it’s an informational report filed directly with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. The requirement stems from the Bank Secrecy Act of 1970 and exists to help prevent tax evasion and track funds used for illicit purposes.

Many Americans with foreign accounts don’t realize they have this filing obligation. Whether you’re a U.S. citizen working abroad, a green card holder with accounts in your home country, or someone who inherited a foreign bank account, the rules apply to you. Failure to file can result in severe penalties—up to $16,536 per violation for non-willful failures, or the greater of $165,353 or 50% of the account balance for willful violations.

The good news? If you’ve missed past filings, there are ways to get back into compliance without facing maximum penalties. The key is acting quickly and understanding your options.

I’m Attorney Samuel Landis, and over the past 15 years, I’ve helped countless clients steer complex foreign bank account reporting requirements and resolve cases involving unfiled FBARs. My experience includes guiding clients through voluntary disclosure programs and negotiating with the IRS to minimize penalties for past non-compliance.

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What is an FBAR and Who Needs to File?

Many people with international financial ties are unsure if they need to file an FBAR. The rules can seem complex, but the basics are straightforward.

The Report of Foreign Bank and Financial Accounts (FBAR), or FinCEN Form 114, is filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. Its purpose is to help the government identify individuals who may be using foreign accounts to hide income or engage in illicit activities, as required by the Bank Secrecy Act of 1970.

Importantly, the FBAR is an informational report, not a tax form. Filing it does not mean you owe taxes; it simply informs the government about your foreign financial accounts.

You must file an FBAR if you are a “U.S. person” with a financial interest in or signature authority over foreign financial accounts, and the combined value of these accounts exceeded $10,000 at any point during the calendar year. This “at any point” rule means even a one-day peak over the threshold triggers the filing requirement. The obligation exists even if the accounts generated no income.

For more details, see our guide on The FBAR and Foreign Bank Accounts.

Who is Considered a ‘U.S. Person’?

The term “U.S. person” is broad and includes:

• U.S. Citizens, regardless of where they live.
• Resident Aliens, including Green Card holders and those meeting the substantial presence test. Your residency status for FBAR is based on immigration law, not tax treaty elections.
• Trusts, estates, and domestic entities like corporations, partnerships, and LLCs created under U.S. law. Even entities “disregarded” for tax purposes may need to file an FBAR.

U.S. citizens working abroad and Green Card holders with accounts in their home country must comply. Our resources for Americans Living Abroad can provide further guidance.

What Types of Foreign Accounts Must Be Reported?

The FBAR requirement extends beyond typical checking or savings accounts.

You must report:

• Bank accounts (savings, checking, time deposits).
• Brokerage accounts holding securities, stocks, or bonds.
• Mutual funds and similar pooled funds.
• Many foreign retirement plans (e.g., Canadian RRSPs, Mexican AFOREs).
• Insurance or annuity policies with cash value.
• Commodity futures or options accounts.

An account’s location determines if it’s foreign. An account at a U.S. bank’s branch in Germany is foreign, but an account at a French bank’s branch in Los Angeles is not.

You have a financial interest if you are the owner of record or have an indirect interest, such as owning over 50% of an entity that holds the account. Signature authority means you can control the account’s funds, even if you never exercise that power.

The $10,000 Reporting Threshold Explained

The $10,000 threshold applies to the aggregate value of all your foreign financial accounts. If the combined total exceeded $10,000 at any point during the year, you must report all foreign accounts, even if no single account surpassed the limit.

For example, consider three accounts with peak balances of $4,000, $3,500, and $3,000. Individually, none are over $10,000. But their combined maximum value is $10,500, which triggers the FBAR filing requirement for all three accounts.

The phrase “at any point during the year” is critical. You must review the entire year’s activity to find the highest balance for each account, not just the year-end statement.

Key FBAR Filing Deadlines

The FBAR is due on April 15 of the year following the reporting year. However, FinCEN grants an automatic six-month extension to October 15. You do not need to file a request for this extension.

For most filers, the effective deadline is October 15. You can find official details on the Official FinCEN deadline information page. In rare cases, like natural disasters, further extensions may be granted.

Your Step-by-Step Guide to Foreign Bank Account Reporting

Filing an FBAR is a manageable, electronic process. Foreign bank account reporting is done using FinCEN Form 114, which is submitted directly to FinCEN, not with your tax return.

Calculating and Converting Account Values

For each foreign account, you must report its maximum account value during the calendar year. This is the highest balance the account reached, even for a single day, not the year-end balance. Review your periodic statements to find this peak value.

If an account is in a foreign currency, you must convert its maximum value to U.S. dollars. Use the official year-end exchange rate published by the U.S. Treasury Department, available on their Treasury Department exchange rates website. If an official rate isn’t available, use another verifiable public rate.

If you cannot determine the exact maximum value, the regulations permit a reasonable approximation, which you should note on the form.

How to File Your FBAR Electronically

All FBARs must be filed electronically through FinCEN’s BSA E-Filing System. You can access the portal at the BSA E-Filing System.

Individual filers can typically use the system without creating a full account. Tax professionals filing for clients must register as institutional filers. The form requires your personal details, financial institution information, account numbers, and the maximum value for each account.

To authorize a third party like our firm to file for you, you must complete FinCEN Report 114a. This form is not submitted with the FBAR but must be kept in your records and provided to the IRS or FinCEN if requested.

FBAR Recordkeeping Requirements

The Bank Secrecy Act legally requires you to maintain FBAR-related records for five years from the report’s due date. For a 2024 FBAR filed by October 15, 2025, you must keep records until October 15, 2030.

These records should include:

• The name on each account
• The account number
• The name and address of the foreign financial institution
• Documentation supporting the reported maximum account value (e.g., bank statements)

We recommend keeping a copy of the filed FBAR along with all supporting documents. Proper recordkeeping can prevent significant stress and complications if FinCEN or the IRS has questions.

FBAR vs. Form 8938: Understanding the Difference

If you’re feeling confused about whether you need to file an FBAR, Form 8938, or both, you’re not alone. This is one of the most common questions we hear at Segal, Cohen & Landis. While both forms involve foreign bank account reporting and foreign financial assets, they’re actually separate requirements with different rules, thresholds, and filing agencies. Understanding the distinction is crucial because meeting one requirement doesn’t automatically satisfy the other.

Let’s break down the key differences in a way that makes sense.

The FBAR (FinCEN Form 114) stems from the Bank Secrecy Act and is filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. It’s filed electronically through a separate system, completely apart from your tax return. The FBAR focuses specifically on foreign financial accounts—things like bank accounts, brokerage accounts, mutual funds, and insurance policies with cash value. The reporting threshold is straightforward: if the aggregate value of all your foreign accounts exceeded $10,000 at any point during the year, you must file.

Form 8938, on the other hand, was created under the Foreign Account Tax Compliance Act (FATCA) and is filed directly with the Internal Revenue Service (IRS) as an attachment to your annual federal income tax return (Form 1040). This form casts a wider net than the FBAR. It requires reporting of specified foreign financial assets, which includes not just foreign accounts but also foreign stock, partnership interests, notes, contracts, and certain foreign trusts. The reporting thresholds for Form 8938 are significantly higher than the FBAR and vary dramatically based on your filing status and where you live—ranging anywhere from $50,000 to $600,000.

Here’s the critical takeaway: filing Form 8938 does not relieve you of the obligation to file an FBAR if you meet the FBAR threshold. These are independent requirements with different agencies. Many of our clients need to file both forms, particularly those with substantial foreign holdings or those living abroad.

The penalties for non-compliance differ as well. FBAR penalties can be severe—both civil and criminal—and we’ll discuss those in detail in the next section. Form 8938 also carries significant civil penalties, such as a $10,000 penalty for failure to file, which can increase if the failure continues after IRS notification.

Think of it this way: the FBAR is specifically about tracking foreign accounts, while Form 8938 is broader and focuses on various types of foreign financial assets. The FBAR has a lower threshold and applies to more people, while Form 8938 typically catches those with more substantial foreign holdings.

For a detailed side-by-side breakdown of these requirements, the IRS provides a helpful Comparison of Form 8938 and FBAR requirements that can clarify exactly what you need to report on each form.

The complexity of these overlapping requirements is exactly why many people seek professional guidance. With over 33 years of experience navigating these waters, we’ve helped thousands of clients understand which forms they need to file and ensure they’re in full compliance with both FinCEN and the IRS. It’s not always simple, but getting it right protects you from potentially devastating penalties.

Penalties and How to Fix Past Filing Errors

Understanding the penalties for FBAR non-compliance is critical. The government takes this seriously, but knowing your options can make a significant difference if you’ve made a mistake.

Penalties depend on whether a violation is deemed non-willful (an honest mistake) or willful (you knew or should have known about the requirement).

The High Cost of Non-Compliance

• Non-Willful Violations: Even if you were unaware of the filing requirement, penalties can be severe. As of 2025, a non-willful violation can result in a civil penalty of up to $16,536 per violation (i.e., per unfiled year).
• Willful Violations: If the failure to file is found to be willful, the penalties are much harsher. The civil penalty can be the greater of $165,353 or 50% of the account balance at the time of the violation. Willful violations can also lead to criminal charges, including substantial fines and prison time.

These figures, which are adjusted for inflation, underscore the importance of proactive compliance.

Correcting Past Mistakes: What to Do If You Haven’t Filed

If you’ve found you should have been filing FBARs, there are established programs to help you get back into compliance. Acting quickly is key.

• Delinquent FBAR Submission Procedures: If you have no unreported income and your failure to file was non-willful, you may be able to simply file the late FBARs with an explanation for the delay. Demonstrating reasonable cause is crucial. FinCEN provides instructions for filing late.
• Streamlined Filing Compliance Procedures: This is for non-willful taxpayers who also need to report foreign income on their tax returns. It involves filing amended returns and delinquent FBARs, often with reduced or waived penalties. There are separate tracks for U.S. residents and those living abroad.
• IRS Voluntary Disclosure Program: For taxpayers whose non-compliance may be considered willful, this program allows you to come forward to avoid criminal prosecution and negotiate civil penalties. This is a complex process that requires experienced legal counsel. At Segal, Cohen & Landis, we have extensive experience guiding clients through the IRS Voluntary Disclosure Program.

Doing nothing is the worst option. The IRS and FinCEN have tools to find unreported accounts, and the penalties for being caught are far greater than for coming forward voluntarily. If you’ve missed filings, we can help you find the best path forward.

Frequently Asked Questions about Foreign Bank Account Reporting

Over our years of practice at Segal, Cohen & Landis, we’ve heard countless questions about foreign bank account reporting. These three come up again and again, and they reveal some of the most common misunderstandings about FBAR requirements.

Do I have to file an FBAR if my foreign accounts don’t generate any income?

Yes, you absolutely must file. This is one of the biggest misconceptions we encounter, and it trips up a lot of people who think, “Well, the account just sat there doing nothing all year, so I don’t need to report it.”

Here’s the thing: the FBAR is an informational report, not a tax form. The filing requirement is based entirely on the aggregate maximum balance of your foreign financial accounts during the year, not on whether those accounts generated any income, interest, or dividends. Even if your foreign account was completely dormant for the entire year—no deposits, no withdrawals, no interest earned—if its balance combined with your other foreign accounts exceeded $10,000 at any point, you must still report it.

The government isn’t asking “did you make money?” They’re asking “did you have money (or other assets) in foreign accounts?”

What if I have signature authority over my employer’s foreign account?

This is a common situation for executives, financial officers, and employees of international companies. If you are a U.S. person and have signature authority or “other authority” over an employer’s foreign financial account, it is generally reportable on your FBAR, even though you have no financial interest in the account and the money isn’t yours.

“Other authority” means you have the power to control the disposition of assets in the account by direct communication to the financial institution—essentially, you can move money or make decisions about the account.

However, some employee exceptions exist. Officers or employees of financial institutions regulated by federal banking agencies, or officers and employees of publicly traded companies, may be exempt from reporting certain employer-controlled accounts. There are also specific extensions available for certain financial professionals who need additional time to gather information. You can find more details on the FinCEN website if this situation applies to you.

The rules here can be nuanced, so if you have signature authority over your employer’s foreign accounts, we recommend consulting with a tax professional to determine your specific reporting obligations.

Can my spouse and I file a joint FBAR?

Generally, no. Each U.S. person who meets the filing criteria must file their own separate FBAR. If both you and your spouse are U.S. persons and each meet the $10,000 aggregate threshold independently, you must each file an FBAR reporting all foreign financial accounts over which you have a financial interest or signature authority.

However, there is one limited exception for jointly owned accounts. If all of the non-filing spouse’s reportable financial accounts are jointly owned with the filing spouse, and the filing spouse reports all such jointly owned accounts on a timely filed FBAR, then the non-filing spouse doesn’t need to file a separate FBAR.

To use this exception, both spouses must complete and sign FinCEN Form 114a, Record of Authorization to Electronically File FBARs. This form isn’t submitted with the FBAR itself—you just keep it for your records and make it available to FinCEN or the IRS upon request. This exception is fairly narrow and doesn’t apply if either spouse has any separate foreign accounts or signature authority over non-jointly-owned accounts.

Conclusion

We’ve covered a lot of ground together, and if there’s one thing I want you to take away from this guide, it’s this: foreign bank account reporting isn’t just a bureaucratic checkbox—it’s a fundamental part of protecting your financial future as a U.S. person with international ties.

The rules might seem complex at first glance, but they boil down to a simple principle: the U.S. government requires transparency about your foreign financial accounts. Whether you’re living abroad, maintaining accounts in your home country, or managing international investments, the FBAR exists to ensure everyone plays by the same rules. And yes, the consequences of non-compliance can be severe—penalties that can reach into the tens or even hundreds of thousands of dollars, not to mention potential criminal charges for willful violations.

But here’s the good news: proactive compliance is remarkably straightforward once you understand your obligations. If your foreign accounts exceeded $10,000 at any point during the year, file FinCEN Form 114 electronically by April 15 (with an automatic extension to October 15). Keep your records organized for five years. That’s really the heart of it.

Of course, life isn’t always simple. Maybe you’ve recently discovered you should have been filing FBARs for years but didn’t. Perhaps you’re unsure whether certain accounts qualify, or you’re dealing with signature authority over your employer’s accounts. These situations involving IRS Foreign Filings can quickly become complicated, and that’s exactly when having experienced legal counsel makes all the difference.

At Segal, Cohen & Landis, we’ve spent over three decades helping clients steer these exact challenges. We’ve guided thousands of people through voluntary disclosures, streamlined filing procedures, and complex compliance questions. We understand that behind every unfiled FBAR is a real person—often someone who simply didn’t know about their obligation—and we approach every case with that understanding.

Don’t let uncertainty or past mistakes keep you up at night. The sooner you address your foreign bank account reporting obligations, the more options you’ll have and the better your outcome will be. Whether you need help understanding your filing requirements, correcting past errors, or navigating a complex international financial situation, we’re here to help.

Contact us for a consultation today. Let’s work together to ensure your compliance and give you the peace of mind you deserve.