Passive Foreign Investment Company (PFIC) Passive Foreign Investment Company (PFIC)

FBAR Requirement

FBAR requires:

  • the annual filing of certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and
  • to keep certain records of those accounts.

FBAR is filed on the Financial Crimes Enforcement Network (FinCEN) Form 114.

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Who Must File

A U.S. person having a financial interest in, or signature or other authority over, a bank, securities, or other financial account exceeding $10,000 maintained during the previous calendar year in a foreign country must report such relationship. Whether the account produced taxable income has no effect on whether the account is a foreign financial account for FBAR purposes.


You don’t need to report foreign financial accounts that are:

  • Correspondent or nostro accounts that are maintained by banks and used solely for bank-to-bank settlements,
  • Owned by a governmental entity,
  • An account of an international financial institution of which the United States government is a member,
  • Maintained on a U.S. military banking facility, 
  • Held in an individual retirement account (IRA) of which you’re an owner or beneficiary,
  • Held in a retirement plan of which you’re a participant or beneficiary, or
  • Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.

You don’t need to file an FBAR for the calendar year if: 

  • All your foreign financial accounts are reported on a consolidated FBAR, or
  • You jointly own all your foreign financial accounts with your spouse and you completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly owned accounts on a timely-filed signed FBAR.

What to report

FBAR requires to report basic information about the filer and the information included but not limited to the list presented in section “Keeping Records” (see below) seperated by:

  • financial accounts owned separately,
  • financial accounts owned jointly,
  • information on financial accounts where filer has signature or other authority but no financial interest in the accounts
  • Information on financial accounts where filer is filing a consolidated report


When to File

The FBAR is an annual report, due April 15 following the calendar year reported. Due to a change in the law, there is currently a transitional automatic extension of the deadline to October 15 if you fail to meet the FBAR annual due date of April 15. Accordingly, specific requests for this extension are not required.

Keeping Records

For each account you must report on an FBAR, you must keep records with this information: 

  • Name on the account, 
  • Account number,
  • Name and address of the foreign bank or other person, 
  • Type of account, and 
  • Maximum value during the year. 

The law doesn’t specify the type of document to keep with this information. Documents may include bank statements or a copy of a filed FBAR if they have the required information. 

Generally, you must keep these records for five years from the due date of the FBAR. 


You may be subject to civil monetary penalties and/or criminal penalties for FBAR reporting and/or recordkeeping violations. Assertion of penalties depends on facts and circumstances.

The IRS may assess an inflation-adjusted civil money penalty on any person who violates , or causes any violation of, any FBAR provision, which currently (2018) generally may not exceed $12,459 ($10,000 in 2007) per nonwillful violation. 

The maximum inflation-adjusted penalty for each willful violation involving a failure to report the existence of an account is the greater of $124,588 per 2018 ($100,000 in 2007), or 50% of the balance in the account at the time of the violation.

Filing Delinquent FBARs

Filing an FBAR late or not at all may be subject to penalties. If the IRS hasn’t contacted you about a late FBAR and you’re not under civil or criminal investigation by the IRS, you should file late FBARs as soon as possible to keep potential penalties to a minimum. In the case of a report filed late, the reason for the delay must be stated.

If you’re using a compliance option, such as  the Streamlined Filing Compliance Procedures, follow the instructions for the specific compliance option. 


The term “U.S. person” means a citizen or resident of the United States or an entity, including but not limited to, a corporation, partnership, trust, or limited liability company created, organized, or formed under the laws of the United States or any State.

The term “bank account” means a savings deposit, demand deposit, checking, or any other account maintained with a person engaged in the business of banking.

The term “securities account” means an account with a person engaged in the business of buying, selling, holding or trading stock or other securities.

The term “other financial account” means an account with a person that is in the business of accepting deposits as a financial agency (e.g. insurance or annuity policy with a cash value, mutual fund or other investment fund).