Form 114 – Report of Foreign Bank and Financial Accounts (FBAR)

Form 114 – Report of Foreign Bank and Financial Accounts (FBAR)

Form 114, commonly known as the Report of Foreign Bank and Financial Accounts (FBAR), is a critical filing requirement enforced by the Financial Crimes Enforcement Network (FinCEN) to combat money laundering and tax evasion.

Key Features

FBAR requires taxpayers with financial interest in or signature authority over foreign bank accounts exceeding $10,000 at any time during the year to report such accounts annually.

Filing Requirements

Individuals, businesses, and certain entities must file FBAR electronically through the Bank Secrecy Act (BSA) E-Filing System by April 15th of the following year, with extensions available.

Penalties for Non-Compliance

Failure to file FBAR can result in significant penalties, including civil fines up to $12,459 per violation or 50% of the account balance for willful violations, and potential criminal prosecution.

Importance in Tax Resolution

FBAR plays a crucial role in tax resolution by ensuring transparency and compliance with foreign account reporting requirements, ultimately helping to maintain financial integrity and prevent tax evasion.