Many people living and working in the United States have bank accounts or other financial accounts in foreign countries. When these accounts reach a certain value, the owner must file a Report of Foreign Banks and Financial Accounts (FBAR).
If you have significant holdings in other countries, consult an Alexandria FBAR lawyer who could ensure you are compliant with reporting requirements. A seasoned tax lawyer could also assist you in preparing and submitting any FBARs that you failed to file in previous years.
The Purpose of an FBAR
An FBAR is a statement that discloses a person’s or business’s foreign financial holdings if they exceed $10,000 at any point in the year. Its purpose is to discourage U.S. taxpayers from using foreign accounts to launder money or hide income. U.S. citizens living abroad and U.S. residents with signatory authority over foreign accounts must file an FBAR if their holdings exceed the threshold.
The FBAR requirement is not a way to tax money held abroad; it is just an informational reporting requirement. A reporter files the FBAR electronically, directly with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department. The FBAR does not go to the Internal Revenue Service (IRS) with other tax forms.
The $10,000 threshold represents the sum of all foreign holdings—a person with multiple accounts could be responsible for filing an FBAR even if no single account exceeded the threshold value in a calendar year. If the account is in a foreign currency, its value in U.S. dollars is determined by using the U.S. Treasury’s Financial Management Service Date for December 31 of the calendar year being reported. Determining the value of foreign financial accounts can be complicated, and an Alexandria attorney could help a taxpayer determine whether they must submit an FBAR.
Understanding the FBAR
The requirement to report financial accounts in other countries applies to U.S. citizens, persons residing in the U.S., estates formed in the U.S., and any other entity organized under U.S. laws. Holdings subject to the reporting requirements include bank accounts, brokerage accounts, trusts, insurance policies with cash value, and mutual funds.
If the assets are in a retirement account or Individual Retirement Account, then the owner, participant, or beneficiary does not need to file an FBAR. Similarly, if the assets are in a trust, a beneficiary need not file an FBAR if the trust’s agent or trustee filed an FBAR. If spouses jointly own all accounts, one spouse could file the FBAR on behalf of both spouses, regardless of whether they file their taxes jointly or separately. However, the non-reporting spouse must sign the FinCEN Form 114a authorizing their partner to file on their behalf.
The FBAR is due on April 15, but the Treasury Department provides an automatic extension until October 15 without the need to request one. An Alexandria FBAR attorney can provide further clarification in reporting deadlines.
What if You Did Not File a Required FBAR?
Taxpayers are sometimes unaware they have foreign holdings in an estate or mutual fund, or they might believe the amount they own is negligible. Some people might even be unaware of the need to report foreign accounts to U.S. tax authorities. The IRS previously allowed people to file delinquent FBARs without a penalty in certain cases.
As of July 1, 2026, the IRS has removed its Delinquent FBAR Submission Procedures webpage from its website. This suggests that the administrative option for coming into FBAR filing compliance without penalties is no longer available.
The removal of these procedures does not mean that penalties will automatically be imposed for late filed FBARs. Rather, it means that taxpayers who file delinquent FBARs may now have potential penalty exposure, depending on the facts and circumstances of their case.
If you need to come into FBAR compliance, contact us to evaluate your options. We can help assess your circumstances and determine whether you may have reasonable cause to request penalty abatement if penalties are proposed or assessed.
Discuss Your Obligations with an Alexandria FBAR Attorney
Taxpayers with foreign financial accounts may not realize they must report them separately to FinCEN. Even when you are aware of your need to file an FBAR, gathering and reporting the information can be tedious.
An Alexandria FBAR lawyer handles the compiling and reporting of your overseas financial assets and could bring you into compliance if you have failed to file them in the past. Call today to schedule an appointment with us.