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Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

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OVDI and Expat CPA discusses FBAR Filing Requirements |TD F 90-22.1, Report of Foreign Bank and Financial Accounts

OVDI expat CPA discusses FBAR

Gary Bode, CPA: filing FBAR is simple but penalties are harsh. For a free expat tax consult, call (910) 399-2705.

The impending June 30th, 2012 filing deadline for FBAR makes presenting the IRS rules relevant. You don’t generally need an expat CPA to file FBAR. But we do prepare them. Remember there’s no time extension. Here are some tips.

The IRS really, REALLY wants your FBAR

Penalties?

  • If non-filing is accidental, up to $10,000.
  • If non-filing is intentional, up to the greater of $100,000 or 50 percent of account balances. Plus criminal penalties may also apply.

Haven’t filed FBAR in the Past?

The OVDI (Offshore Voluntary Disclosure Incentive) program is still open, albeit with a higher penalty. Lots if Internet chatter about OVDI exists. For more information on various strategies available for OVDI, please click OVDI on the drop down Category list in the right sidebar. Yes, we prepare OVDI applications, including amended returns.

What is FBAR?

Expat CPAs usually say it’s a form used by the IRS to help track foreign banking transactions by US “persons”. Tracking means:

  • Looking for taxable income that should have been reported on your Form 1040 or business return.
  • Looking for illegal foreign banking transactions. Like money laundering .

A US person includes US residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

You file FBAR separately from your Form 1040. So it’s not like Form 2555 that you file with your Form 1040. For more FBAR information, click FBAR in the Forms drop down list on the right sidebar.

How to get the correct dollar value for FBAR

  • Look at your bank statements for the year.
  • Find the time period when you had the most assets in those accounts.
  • Convert that highest amount to US dollars using the end of the year conversion rate.
  • Enter the US dollar amount on FBAR.

Who has to File?

  • Did you control a non-US bank account?
  • Did the highest total balance in your non-US bank accounts ever exceed $10,000 for the year?
  • Are you a US person as defined above?

If you answered yes to all three questions you have to file FBAR.

FBAR vs. Form 8938

They’re similar. Expat CPAs worry about the stiff penalties for not filing Form 8938 because it’s new and folks living outside the US might not be aware of the new reporting requirements. Click on 8938 in the Forms list for more info.

Are there exceptions for filing FBAR?

Yes. Here’s the IRS list:

  • Certain foreign financial accounts jointly owned by spouses.
  • United States persons included in a consolidated FBAR.
  • Correspondent/nostro accounts.
  • Foreign financial accounts owned by a govermental entity.
  • Foreign financial accounts owned by an international financial institution.
  • IRA owners and beneficiaries.
  • Participants in and beneficiaries of tax-qualified retirement plans.
  • Certain individuals with signature authority over but no financial interest in a foreign financial account.
  • Trust beneficiaries.
  • Foreign financial accounts maintained on a United States military banking facility.

I’m an expat CPA with a virtual office to accommodate international clients. Please read any of my expat posts to gauge my abilities and proactive philosophy. Expat CPA work includes Form 5471, Form 2555, Form 1116, FBAR, Form 8938, OVDI applications, etc. For a free phone consult, please call (910) 399-2705. Or just click on Contact US to send us an E Mail.

2 comments to OVDI and Expat CPA discusses FBAR Filing Requirements |TD F 90-22.1, Report of Foreign Bank and Financial Accounts

  • Hello Cpawilmingtonnc,
    Thanks for the above, “If you haven’t disclosed your foreign account on your tax return and haven’t previously filed FBARs, should you? If you are in the process of coming clean with your foreign accounts under the OVDI, the answer appears to be yes. Even if you’ve only done a pre-clearance, you should probably still file your FBAR. See FAQ 23.”

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