For expats with financial accounts held outside of the United States, complying with the Foreign Bank Account Report (FBAR) requirements is essential. FBAR filing is a crucial obligation imposed by the Financial Crimes Enforcement Network (FinCEN) to monitor and prevent money laundering and other illicit activities.

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The FBAR is an annual report filed by U.S. persons who have a financial interest in or signature authority over foreign financial accounts. It applies to a wide range of accounts, including bank accounts, brokerage accounts, and certain types of retirement accounts. The primary purpose of FBAR filing is to promote transparency and prevent offshore tax evasion and other financial crimes.

 

Expats who meet the FBAR filing threshold must comply with the reporting requirements. Generally, if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year, FBAR filing is mandatory. Expats with signature authority over foreign accounts, even if they don't own them outright, may also be subject to FBAR filing requirements.

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Failure to comply with FBAR requirements can result in significant penalties. The IRS has the authority to impose both civil and criminal penalties for non-compliance. Civil penalties can range from $10,000 per violation for non-willful violations to the greater of $100,000 or 50% of the account balance for willful violations. Criminal penalties can include fines and imprisonment for intentional violations.

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Identifying which foreign financial accounts are reportable can be challenging, especially for expats with multiple accounts across different countries. We can assess your financial situation, review your account holdings, and determine the reportable accounts that need to be included in the FBAR filing. Our expertise ensures compliance and mitigates the risk of overlooking reportable accounts.

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