{"id":4197,"date":"2022-04-02T21:55:14","date_gmt":"2022-04-02T21:55:14","guid":{"rendered":"https:\/\/patellawoffices.com\/blog\/?p=4197"},"modified":"2022-04-02T21:55:16","modified_gmt":"2022-04-02T21:55:16","slug":"irs-releases-new-irs-2022-fbar-fact-sheet","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/irs-releases-new-irs-2022-fbar-fact-sheet\/","title":{"rendered":"IRS Releases New IRS 2022 FBAR Fact Sheet"},"content":{"rendered":"\n<p>The IRS released its new 2022 FBAR Fact Sheet last month, which comprehensively provides all information related to the FinCEN FBAR Form 114.  Interestingly, it fails to include the <a href=\"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/all-the-many-fbar-late-filing-procedures\/\">Delinquent FBAR Submission Procedure (or DFSP)<\/a>, which our office has successfully utilized hundreds of times to cure delinquent FBARs and immunize clients from penalties.  Nonethless, the new IRS 2022 FBAR Fact Sheet is pasted below.<\/p>\n\n\n\n<p>IRS FS-2022-24, March 2022<\/p>\n\n\n\n<p>The law requires U.S.\npersons to report their overseas financial accounts because foreign financial\ninstitutions may not be subject to the same reporting requirements as domestic\ninstitutions. Civil and criminal penalties may apply for failures to properly\nfile their&nbsp;<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/report-of-foreign-bank-and-financial-accounts-fbar\">Report of Foreign Bank and Financial Account (FBAR)<\/a>&nbsp;when\nrequired. The IRS provides these details to help filers prepare and file their\nFBAR.<\/p>\n\n\n\n<p><strong>Who needs to report<\/strong><\/p>\n\n\n\n<p>Since 1970, the Bank Secrecy Act (BSA) requires U.S. persons to file an FBAR if they have:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Financial\n     interest in, signature authority or other authority over one or more\n     accounts, such as bank accounts, brokerage accounts and mutual funds, in a\n     foreign country, and<\/li><li>The\n     aggregate value of all foreign financial accounts exceeds $10,000 at any\n     time during the calendar year.<\/li><\/ol>\n\n\n\n<p>A U.S. person is a\ncitizen or resident of the United States or any domestic legal entity such as a\npartnership, corporation, limited liability company, estate or trust.<\/p>\n\n\n\n<p>A foreign country\nincludes any area outside the United States, the District of Columbia, Indian\nlands (as defined in the&nbsp;<a href=\"https:\/\/www.nigc.gov\/general-counsel\/indian-gaming-regulatory-act\">Indian Gaming\nRegulatory Act<\/a>) and the following U.S. territories and possessions:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>American\n     Samoa,<\/li><li>Guam,<\/li><li>Northern\n     Mariana Islands,<\/li><li>Puerto\n     Rico,<\/li><li>Trust\n     Territories of the Pacific Islands and<\/li><li>United\n     States Virgin Islands.<\/li><\/ul>\n\n\n\n<p><strong>How and when to report<\/strong><\/p>\n\n\n\n<p>Those required to report\ntheir foreign accounts should file the FBAR electronically using the Financial\nCrimes Enforcement Network&#8217;s&nbsp;<a href=\"https:\/\/bsaefiling.fincen.treas.gov\/main.html\">BSA\nE-Filing System<\/a>. The FBAR is due April 15. Those who don&#8217;t meet the\nApril 15 due date must file by October 15, the automatically extended due date\nfor the FBAR. They don&#8217;t need to request the extension. If they don&#8217;t have all\ntheir information to file by the extended due date, they should file as\ncomplete a report as possible by October 15 and later amend the report when\nthey have more information. See&nbsp;<a href=\"https:\/\/www.fincen.gov\/sites\/default\/files\/shared\/FBAR_Due_Date_20190306.pdf\">FinCEN&#8217;s website<\/a>&nbsp;<strong>PDF<\/strong>&nbsp;for further\ninformation. Taxpayers should not file the FBAR with their federal individual,\nbusiness, trust or estate tax returns.<\/p>\n\n\n\n<p>Individuals unable to\ne-file their FBAR must contact the Financial Crimes Enforcement Network&#8217;s\nResource Center at&nbsp;<a href=\"tel:800-949-2732\">800-949-2732<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/mail.google.com\/mail\/?view=cm&amp;fs=1&amp;tf=1&amp;to=FRC@fincen.gov\" target=\"_blank\" rel=\"noreferrer noopener\">FRC@fincen.gov<\/a>&nbsp;to\nrequest an alternative filing method. Callers from outside the United States\ncan contact the helpline at&nbsp;<a href=\"tel:703-905-3975\">703-905-3975<\/a>.<\/p>\n\n\n\n<p><strong>Jointly owned accounts.<\/strong>&nbsp;If two people\njointly own a foreign financial account, or if several people each own a\npartial interest in an account, then each person has a financial interest in\nthat account, and each person must report the entire value of the account on an\nFBAR.<\/p>\n\n\n\n<p>Exception for spouses.\nSpouses don&#8217;t need to file separate FBARs if they complete and sign&nbsp;<a href=\"https:\/\/www.fincen.gov\/sites\/default\/files\/shared\/FBARE-FileAuth114aRecordSP.pdf\">Form 114a, Record of Authorization to Electronically File\nFBARs<\/a>&nbsp;<strong>PDF<\/strong>, and:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>All\n     reportable financial accounts of the non-filing spouse are jointly owned\n     with the filing spouse, and<\/li><li>The filing\n     spouse reports all accounts jointly owned with the non-filing spouse on a\n     timely filed FBAR.<\/li><\/ol>\n\n\n\n<p>Otherwise, both spouses\nmust file separate FBARs, and each spouse must report the entire value of the\njointly owned accounts.<\/p>\n\n\n\n<p>The e-filing system will\nnot allow both spouses&#8217; signatures on the same electronic form \u2013 only the\nfiling spouse signs in the system. Taxpayers don&#8217;t submit Form 114a with the\nFBAR; they keep it for their records.<\/p>\n\n\n\n<p><strong>Children.<\/strong>&nbsp;Generally, a child\nis responsible for filing their own FBAR. If a child can&#8217;t file their own FBAR\nfor any reason, such as age, the child&#8217;s parent or guardian must file it for\nthem. If the child can&#8217;t sign their FBAR, a parent or guardian must sign it.<\/p>\n\n\n\n<p><strong>Accounts not reported on\nFBAR<\/strong><\/p>\n\n\n\n<p>Individuals don&#8217;t need to\nreport foreign financial accounts held in individual retirement accounts\n(described in Internal Revenue Code Sections 408 and 408A) and tax-qualified\nretirement plans (described in IRC Sections 401(a), 403(a) or 403(b)) on the\nFBAR. The&nbsp;<a href=\"https:\/\/www.fincen.gov\/sites\/default\/files\/shared\/FBAR%20Line%20Item%20Filing%20Instructions.pdf\">FBAR\ninstructions<\/a>&nbsp;<strong>PDF<\/strong>&nbsp;list other\nexceptions.<\/p>\n\n\n\n<p><strong>How to report the value\nof foreign financial accounts<\/strong><\/p>\n\n\n\n<p>FBAR filers need to\nreasonably figure and report the greatest value of currency or non-monetary\nassets in their accounts during the calendar year. They may rely on their\nperiodic account statements issued at least quarterly if the statements\naccurately show the greatest account value during the year.<\/p>\n\n\n\n<p>Filers figure the\ngreatest value in the currency of the account. If not already in U.S. dollars,\nthey convert that value into U.S. dollars using the Treasury Bureau of the\nFiscal Service&nbsp;<a href=\"https:\/\/www.fiscal.treasury.gov\/reports-statements\/treasury-reporting-rates-exchange\/\">exchange\nrate on the last day of the calendar year<\/a>. If the Treasury Bureau of\nthe Fiscal Service rate isn&#8217;t available, they may use another valid exchange\nrate and give the source of the rate. For example, the value of an account\nlocated in Japan may be shown on the account statements in Japanese yen. Filers\nwould figure the greatest value of the account in yen and then convert it into\nU.S. dollars.<\/p>\n\n\n\n<p>The Financial Crimes\nEnforcement Network (FinCEN) website has steps for&nbsp;<a href=\"https:\/\/www.fincen.gov\/reporting-maximum-account-value\">Reporting\nMaximum Account Value<\/a>.<\/p>\n\n\n\n<p><strong>Comparison of Form 8938\nand FBAR requirements<\/strong><\/p>\n\n\n\n<p>In addition to the annual\nReport of Foreign Bank and Financial Accounts (FBAR) requirements outlined\nabove, certain U.S. taxpayers must also file&nbsp;<a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-8938\">Form 8938, Statement of Specified Foreign Financial\nAssets<\/a>. Accounts reported on Form 8938 are ones they often need to\nreport on the FBAR, too. Unlike the FBAR, taxpayers file Form 8938 with their\nfederal income tax returns.<\/p>\n\n\n\n<p>Depending on a taxpayer&#8217;s\nsituation, they may need to file Form 8938 or the FBAR or both, and may need to\nreport certain foreign accounts on both forms. Taxpayers can find a&nbsp;<a href=\"https:\/\/www.irs.gov\/businesses\/comparison-of-form-8938-and-fbar-requirements\">comparison\nof Form 8938 and FBAR requirements<\/a>&nbsp;on IRS.gov.<\/p>\n\n\n\n<p><strong>Amending an FBAR<\/strong><\/p>\n\n\n\n<p>Those who need to correct\na filed FBAR must file a new FBAR with the corrected information and mark the\nnew FBAR as &#8220;Amended.&#8221; Fill it out completely, even fields that don&#8217;t\nneed correction. They can e-file the amended FBAR using the BSA E-Filing System\nor contact FinCEN for an alternative filing method if they&#8217;re unable to e-file.<\/p>\n\n\n\n<p>If they e-file the\namended FBAR, check the &#8220;Amended&#8221; box on FinCEN Form 114. The Prior\nReport BSA Identifier field will activate, and they&#8217;ll enter the BSA ID number\nfrom the original FBAR. If they e-filed the original FBAR, they&#8217;ll find the BSA\nID number in the acknowledgement email FinCEN sent to them. If they can&#8217;t\nlocate the BSA ID number or if they paper-filed the original FBAR, they need to\nenter all zeros in the Prior Report BSA Identifier field.<\/p>\n\n\n\n<p><strong>Filing late FBARs<\/strong><\/p>\n\n\n\n<p>If a U.S. person learns\nthat they should have filed an FBAR for a previous year, they should\nelectronically file the late FBAR as soon as possible. The BSA E-Filing System\nallows them to enter the calendar year they&#8217;re reporting, including past years.\nIt also offers them an option to explain the reason for the late filing or show\nif it&#8217;s part of an IRS compliance option.<\/p>\n\n\n\n<p><strong>Penalties for failure to\nfile an FBAR<\/strong><\/p>\n\n\n\n<p>Those who don&#8217;t file an\nFBAR when required may be subject to significant civil and criminal penalties.\nCriminal violations of FBAR rules can result in a fine and\/or five years in\nprison. The U.S. government adjusts the penalty amounts annually for inflation.<\/p>\n\n\n\n<p>The IRS will not penalize\nthose who properly report a foreign financial account on a late-filed FBAR, and\nthe IRS finds they have reasonable cause for late filing.<\/p>\n\n\n\n<p><strong>Recordkeeping<\/strong><\/p>\n\n\n\n<p>Those who must file an\nFBAR must keep records of accounts for generally five years from the FBAR due\ndate, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Name on\n     each account,<\/li><li>Account\n     number or other designation,<\/li><li>Name and\n     address of the foreign bank or other person who keeps the account,<\/li><li>Type of\n     account, and<\/li><li>Greatest\n     value of each account during the reporting period.<\/li><\/ul>\n\n\n\n<p>They should also keep\ncopies of filed FBARs.<\/p>\n\n\n\n<p>Officers or employees who\nfile an FBAR to report signature authority over an employer&#8217;s foreign financial\naccount don&#8217;t need to personally keep records on their employer&#8217;s accounts.<\/p>\n\n\n\n<p><strong>FBAR help<\/strong><\/p>\n\n\n\n<p>For general questions\nabout FBAR filing, call&nbsp;<a href=\"tel:866-270-0733\">866-270-0733<\/a>&nbsp;(toll-free inside the U.S.) or&nbsp;<a href=\"tel:313-234-6146\">313-234-6146<\/a>&nbsp;(not\ntoll-free for callers outside the U.S.) Monday through Friday, 8 a.m. to 4:30\np.m. Eastern Time.<\/p>\n\n\n\n<p>For technical questions\nabout the BSA E-filing System, email questions to&nbsp;<a href=\"https:\/\/mail.google.com\/mail\/?view=cm&amp;fs=1&amp;tf=1&amp;to=bsaefilinghelp@fincen.gov\" target=\"_blank\" rel=\"noreferrer noopener\">bsaefilinghelp@fincen.gov<\/a>&nbsp;or\ncall the BSA E-Filing Help Desk at&nbsp;<a href=\"tel:866-346-9478\">866-346-9478<\/a>. It&#8217;s open Monday through Friday from\n8 a.m. to 6 p.m. Eastern Time.<\/p>\n\n\n\n<p>For questions about BSA\nregulations or to request an electronic filing exemption to paper-file, contact\nFinCEN&#8217;s Resource Center at&nbsp;<a href=\"tel:800-949-2732\">800-949-2732<\/a>&nbsp;or&nbsp;<a href=\"https:\/\/mail.google.com\/mail\/?view=cm&amp;fs=1&amp;tf=1&amp;to=FRC@fincen.gov\" target=\"_blank\" rel=\"noreferrer noopener\">FRC@fincen.gov<\/a>. Callers\nfrom outside the United States can contact the helpline at&nbsp;<a href=\"tel:703-905-3975\">703-905-3975<\/a>.<\/p>\n\n\n\n<p>For more information, visit&nbsp;<a href=\"https:\/\/www.fincen.gov\/report-foreign-bank-and-financial-accounts\">Report Foreign Bank and Financial Accounts<\/a>&nbsp;on\nFinCEN&#8217;s website.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The IRS released its new 2022 FBAR Fact Sheet last month, which comprehensively provides all information related to the FinCEN FBAR Form 114. Interestingly, it fails to include the Delinquent FBAR Submission Procedure (or DFSP), which our office has successfully utilized hundreds of times to cure delinquent FBARs and immunize clients from penalties. Nonethless, the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4197","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=4197"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4197\/revisions"}],"predecessor-version":[{"id":4201,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4197\/revisions\/4201"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=4197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=4197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=4197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}