The deadline to
file the 2012 year FBAR (Report of Foreign Bank and Financial Accounts) is fast
approaching. The FBAR for 2012 must be received on or before June 30, 2013. This
reporting requirement is not to be confused with the foreign financial assets
reporting requirement under FATCA - IRS Form 8938.
U.S. persons
with interests in or control with respect to foreign financial accounts (e.g., securities,
brokerage, savings, demand, checking, deposit, time deposit, etc.) with values
that exceed a certain threshold balance are required to file a report commonly
referred to as an “FBAR,” i.e., the Report of Foreign Bank and Financial
Accounts (Form TD F 90.22). Specifically, any U.S. person who has a financial
interest in, or signatory or other authority over, one or more financial accounts
in foreign countries with an aggregate value greater than $10,000 at any point
in the calendar year is required to report that interest to the Internal
Revenue Service. This requirement is met through the filing of an FBAR. A
taxpayer is also required to report any interests in overseas financial accounts
on his or her federal income tax return where indicated on the applicable
schedule. The FBAR is not filed with the federal income tax return.
The
consequences of failing to file a required FBAR can be significant. Willful and
nonwillful penalties are civil penalties that can apply to individuals. A
nonwillful violation can result in imposition of a penalty of up to $10,000. A
willful violation can result in imposition of a penalty of the greater of
$100,000 or 50 percent of the balance in the subject account. In some
instances, violations can result in criminal sanctions.
To read more or
to get more information on how to file, contact LaVonne Lawson or visit LawsonTax.
Mauricio Leon de la Barra is an
international law attorney licensed to practice law in Mexico and California,
and has more than 15 years of experience representing clients in cross-border
business and real estate transactions and litigation involving international,
U.S. and Mexican laws.