How do I report my foreign bank accounts (FBAR)?
Congress created the Bank Secrecy Act in 1970, but since the Patriot Act especially the last few years, the rules and regulations of Reporting of Foreign Bank and Financial Accounts (FBAR) have changed quite a bit. Generally, if you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account which exceed $10,000 aggregated, you might be required to report the account yearly to the IRS by completing and filing Form TD F 90-22.1.
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law such as money laundering, tax evasion and other criminal activities. To that end, investigators use FBARs to help identify or track funds used for illegal purposes or to identify unreported income maintained or generated abroad.
It is unfortunate that 95% of the foreign assets being reported are going to drown out the 5% that might be considered illicit. Bureaucratic paperwork at its finest.
There are rules, exceptions and a whole bunch of red tape- please visit the IRS website for excruciating details at http://www.irs.gov/businesses/small/article/0,,id=148849,00.html. You can also contact us for assistance with this.