The FBAR Deadline Filing Requirements: (New) 2025 Guide

FBAR Filing 2024/2025: Overview of FinCEN 114 Requirements

FBAR Filing 2024/2025

Each year, Taxpayers considered U.S. persons for tax purposes must report their foreign accounts, assets, and investments on various international information reporting forms to the IRS and FinCEN. While there are many different types of IRS foreign tax forms that a Taxpayer may have to file, the FBAR (Foreign Bank and Financial Account Form) is the form that most Taxpayers are aware of. The FBAR is required to be filed in any year that the Taxpayer has an annual aggregate total that exceeds $10,000 for all their foreign accounts combined on any given day of the year. When Taxpayers fail to file the FBAR form, they may become subject to fines and penalties, although the Internal Revenue Service has developed various offshore amnesty programs to help taxpayers safely get into compliance. While there are many different aspects to foreign account reporting, let’s hone in on some of the more important requirements for FBAR filing.

Who Has to File an FBAR?

The FBAR is required to be filed by U.S. Persons who meet the threshold requirements each year. It is important to note that a ‘U.S. Person’ is not limited to only individuals and also includes certain domestic entities and trusts.

What is Reported on the FBAR?

The FBAR is used to report many different types of foreign financial accounts, such as bank accounts, investment accounts, fund accounts, foreign pension plans, foreign life insurance policies, etc. The key takeaway for Taxpayers is that the FBAR is not limited to bank accounts.

When is the FBAR Due?

The FBAR is due on April 15th but it is on automatic extension, so Taxpayers have until October to file the form. The IRS can change the due date at any time so Taxpayers should be cognizant of this and make sure to double-check each year around February or March.

Can You Apply for an FBAR Extension?

Taxpayers do not have to file for an extension to extend the time to file the FBAR because they ‘automatically’ have until October to file the form. Even if the Taxpayer files their tax return earlier, they still have until October to file the FBAR.

Joint Accounts with Non-Residents

It is important to note that the requirement to file the FBAR is based on the U.S. Person status of the filer. Thus, even if the U.S. Person has a joint account or signature authority over an account that is owned by a non-U.S. Person, the U.S. Person is still required to file the form and include the account.

Pension Accounts on FBAR

Another common misconception is that foreign pension plans are not reportable on the FBAR. This is due in part to some ambiguous information published by the IRS in which they did not clarify that they were specifically referring to U.S. retirement plans such as a 401K or an IRA. If a Taxpayer has a foreign pension, they are required to report it on the FBAR unless an exception, exclusion, or limitation applies.

FBAR for Dormant Accounts

Just because an account is inactive does not mean it would be excluded from the FBAR. In other words, if a Taxpayer has foreign dormant accounts that are inactive or have a low balance, they are still required to report these accounts on the FBAR.

Foreign Account Ownership Not Required

Another important fact about filing the FBAR is that it is not limited to accounts that the Taxpayer has a financial interest in. If a Taxpayer has signatory authority over a foreign account, they are still required to file the form. This is different than Form 8938, which is similar to the FBAR but only requires a Taxpayer to include accounts they have a financial interest in.

Treaty Election and Aroeste

The IRS takes the position that even if a Taxpayer lives overseas and qualifies under a treaty to be considered a non-resident alien for tax purposes, they are still required to file the FBAR — but this may not always be the case. In the recent case of Aroeste, the court decided in favor of the Taxpayer and ruled that since the Taxpayer qualified as a non-resident alien under the tax U.S./Mexico Tax Treaty, they were not subject to FBAR. The U.S. government was going to pursue an appeal but then dismissed the appeal.

Other Foreign Account IRS Forms as well

Finally, Taxpayers should keep in mind that the FBAR is only one of several different international information reporting forms that the Taxpayer may have to file. The IRS has developed many international reporting forms that require Taxpayers to report all different types of assets, such as passive investment companies, foreign entities, foreign partnerships, and foreign trusts.

Late Filing Penalties May Be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.