If the combined balance of your foreign financial accounts exceeded $10,000 at any point in the year, you must file FBAR (FinCEN 114). Penalties for missing it start at $10,000 per account per year — but voluntary disclosure paths exist if you've fallen behind.
Many of our clients — especially those with family overseas or who moved to the U.S. as students or workers — have foreign bank accounts they opened years ago. Most don't realize those accounts trigger a U.S. reporting requirement even if they generate no income.
Who has to file FBAR?
You must file if all three apply:
- You're a "U.S. person" — citizen, green card holder, or resident alien under the substantial presence test
- You have a financial interest in, or signature authority over, one or more foreign financial accounts
- The combined maximum value of those accounts exceeded $10,000 at any point during the calendar year
The $10K threshold is combined across all accounts, not per account. If you had $4,000 in one account and $7,000 in another, you're over.
What counts as a "foreign financial account"?
- Bank accounts (checking, savings, fixed deposits)
- Brokerage and securities accounts
- Mutual funds and certain pooled investments
- Foreign pension accounts (in most cases)
- Life insurance policies with cash value
- Cryptocurrency held on foreign exchanges (per current FinCEN guidance, this is evolving)
Signature authority counts, even without ownership
A common surprise: if you have signature authority on a parent's or employer's account — say, you can sign checks on your mother's account in China — you have a reporting obligation even if the money isn't yours.
FBAR vs. Form 8938 — they're different
These are often confused. You might need to file both:
| FBAR (FinCEN 114) | Form 8938 (FATCA) | |
|---|---|---|
| Filed with | FinCEN (separately) | IRS (with 1040) |
| Threshold (single, U.S. resident) | $10K any day of year | $50K year-end / $75K any day |
| Threshold (married, U.S. resident) | $10K combined | $100K year-end / $150K any day |
| Covers signature authority? | Yes | No (ownership only) |
| Covers foreign real estate? | No | No (direct real estate excluded) |
Deadlines
- FBAR: April 15, with an automatic extension to October 15 (no form needed)
- Form 8938: Same due date as your tax return (April 15, extendable to October 15 via Form 4868)
Penalties for missing it
- Non-willful FBAR violation: up to $10,000 per violation (recent Supreme Court ruling: "per report," not per account — still significant)
- Willful FBAR violation: up to the greater of $100,000 or 50% of account balance per year
- Form 8938 failure: $10,000, rising to $50,000 if not corrected after notice
I've missed past FBARs — what now?
Don't panic, and don't quietly backfile (the IRS calls that a "quiet disclosure" and treats it as willful). There are proper programs:
- Delinquent FBAR Submission Procedures — if you had no unreported income on the accounts, you can file late FBARs with a reasonable-cause statement. No penalty in most cases.
- Streamlined Filing Compliance Procedures — for taxpayers whose non-compliance was non-willful. File 3 amended returns + 6 years of FBARs. Domestic version: 5% penalty on highest balance. Foreign version: no penalty.
- Voluntary Disclosure Program — for willful cases. Criminal protection, but civil penalties are steep.
The best time to catch up on FBARs was five years ago. The second best is before the IRS sends you a letter.
Common scenarios we see
- Students with a Chinese bank account from before they moved to the U.S. — once the account hits $10K USD equivalent, FBAR is required.
- Green card holders with elderly parents' accounts. Signature authority alone triggers reporting.
- Real estate sales abroad. Wire proceeds into a foreign account, and the peak balance spikes over $10K for even a day.
- Inheritance from overseas. Triggers both FBAR and Form 3520.
FBAR work is a significant part of our practice — especially for our Chinese-American clients. If you haven't been filing, or you're not sure you need to, contact us confidentially and we'll assess where you stand.