FBAR Primer For American Expats

FBAR Primer For American Expats 

I am not a tax expert and this post is not professional advice. The information given below is based upon my personal experience of eight years filing the FBAR. No guarantee can be made about the accuracy or factual nature of any information found in this article.  

Table Of Contents:

Who Must File An FBAR

FBAR is the acronym for Report of Foreign Bank and Financial Accounts Form 114. Certain persons who hold foreign bank accounts must file an FBAR
A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. See General Definitions, to determine who is a United States person.
The form can be submitted online to FinCEN, the Financial Crimes Enforcement Network.

If all of your foreign financial accounts together total more than $10,000 at any time during the year, then you must file an FBAR. Dollar accounts at Philippine banks are easily accounted for, whereas peso accounts must be converted to US dollars. Use the US Treasury Department peso-to-dollar conversion rate that was effective for the last calendar day of the year.

Even if you were not required to file a tax return because your income was below the filing threshold you may still have to file an FBAR.

Definition Of "Financial Account" (line item instructions p.4):

A financial account includes, but is not limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution). A financial account also includes a commodity futures or options account, an insurance policy with a cash value (such as a whole life insurance policy), an annuity policy with a cash value, and shares in a mutual fund or similar pooled fund (i.e., a fund that is available to the general public with a regular net asset value determination and regular redemptions).

Reportable Accounts

Foreign Financial Accounts (line item instructions p.4):
A foreign financial account is a financial account located outside of the United States. For example, an account maintained with a branch of a United States bank that is physically located outside of the United States is a foreign financial account. An account maintained with a branch of a foreign bank that is physically located in the United States is not a foreign financial account.
Interest In A Foreign Financial Account (line item instructions p.5):
A United States person has a financial interest in a foreign financial account for which:
1. the United States person is the owner of record or holder of legal title, regardless of whether the account is maintained for the benefit of the United States person or for the benefit of another person; or
2. the owner of record or holder of legal title is one of the following:
a.An agent, nominee, attorney, or a person acting in some other capacity on behalf of the United States person with respect to the account;
b. A corporation in which the United States person owns directly or indirectly: (i) more than 50 percent of the total value of shares of stock or (ii) more than 50 percent of the voting power of all shares of stock;
c. A partnership in which the United States person owns directly or indirectly: (i) an interest in more than 50 percent of the partnership's profits (e.g., distributive share of partnership income taking into account any special allocation agreement) or (ii) an interest in more than 50 percent of the partnership capital;
d. A trust of which the United States person: (i) is the trust grantor and (ii) has an ownership interest in the trust for United States federal tax purposes. See 26U.S.C. sections 671-679 to determine if a grantor has an ownership interest in a trust;
e. A trust in which the United States person has a greater than 50 percent present beneficial interest in the assets or income of the trust for the calendar year; or
f. Any other entity in which the United States person owns directly or indirectly more than 50 percent of the voting power, total value of equity interest or assets, or interest in profits.
You do not need to include accounts held at any United States military banking facility (line item instructions p.5):

A financial account maintained with a financial institution located on a United States military installation is not required to be reported, even if that military installation is outside of the United States.

I am not aware of any US military banking facilities located in the Philippines. But the possibility exists that a well traveled person could have accounts with Philippine banks and also US military banking facilities located in some other country. In such a case, that person would not need to count the latter toward the $10,000 threshold.

Spousal FBAR

Your spouse with whom you hold joint accounts is not required to file a separate FBAR if the following conditions are met (line item instructions p.6):
  • all the financial accounts that the non-filing spouse is required to report are jointly owned with the filing spouse; and
  • the filing spouse reports the jointly owned accounts on a timely filed FBAR electronically signed; and
  • the filers have completed and signed Form 114a, “Record of Authorization to Electronically File FBAR’s” (maintained with the filers’ records).
If all three requirements above are not met (line item instructions p.4):
Both spouses are required to file separate FBARs, and each spouse must report the entire value of the jointly owned accounts. 
Regarding filing jointly and Form 114a (line item instructions p.16):
Note: If jointly filing with a spouse, both parties should complete and sign Form 114a. Completing the Form 114a with both spouses signing the form completes the necessary requirement that will permit one spouse to electronically sign (PIN) a single report for both parties instead of filing two FBARs. The Form 114a is available on the FinCEN (under the forms tab) and BSA E-File websites. Keep this form for your records, do not send to FinCEN.
Note the statement in the top center on Form 114a: “Do not send to FinCEN. Retain this form for your records.”

And this statement at the bottom of the form: “DO NOT SEND THIS RECORD TO FinCEN UNLESS REQUESTED TO DO SO.”

Filing The FBAR

The FinCEN website offers two methods for completing the FBAR.

To download a PDF version of the FBAR that you can fill out, save and complete at your leisure follow this link and click “Prepare ” and once you are done you can "Submit" the pdf form:

If you would like to use the online form and you are prepared to complete an FBAR in one sitting, then choose "Prepare & Submit."

FinCEN’s deadline for filing the FBAR is April 15, like taxes. But FinCEN does add this note (line item instructions p.8):

Extension of Time to File. FinCEN will grant filers failing to meet the FBAR annual due date of April 15th an automatic extension to October 15th each year. Accordingly, specific requests for an extension are not required.

Requirement To Maintain Records (line item instructions p.8)

Persons required to file an FBAR must retain records that contain the name in which each account is maintained, the number or other designation of the account, the name and address of the foreign financial institution that maintains the account, the type of account, and the maximum account value of each account during the reporting period. The records must be retained for a period of 5 years from April 15th of the year following the calendar year reported, or the date filed if after April 15th, and must be available for inspection as provided by law. Retaining a copy of the filed FBAR can help to satisfy the record keeping requirements.

Amendments To A Previously Filed FBAR

You can file an amended FBAR and when you do you need to provide ALL previous information PLUS your amendment, rather than sending an amendment with only information for an account that you forgot. You need to tick the box on the form noting it as amended and you also need to provide your Prior Report BSA Identifier. The Prior Report BSA Identifier should be emailed to you within a few days after you submit your initial FBAR.

I found it best to fill out the FBAR on the downloadble form, rather than the online form because you cannot save an incomplete online form and return to it later. Also, if you need to file an amendment you will need to fill out a new form from scratch if you initially used the online form.

If you do use the downloadable form and later need to file an amendment, then you can follow these instructions from FinCEN (sent to me via email) to accomplish your amended FBAR:
  1. Open your original report, or Fill out a new form if you cannot find the original (if filling out a new form disregard 2, 3, and 6)
  2. Click on “Remove Signature” to unlock the form
  3. Click “Yes” in the notification window 
  4. Check the “Amended” box and enter your 14 digit BSA ID in the “Prior Report BSA Identifier” field
  5. Sign, Save, and Submit the form as normal
  6. Be sure not to Save over your original
If your amendment is being filed past the due date, then you should probably talk with a tax professional just in case there is an issue. This is doubly true if what you forgot includes accounts that earn interest or dividends that you also forgot to include on your IRS tax return.

Contacting FinCEN 

If at any time you need to contact FinCEN you may do so at this email address:
It has been my experience that they are very prompt in answering all questions.

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