In addition to the newly implemented FATCA form 8938 for financial and bank account reporting, the US Treasury requires that Americans also file a separate bank reporting form, the Foreign Bank Account Report or FBAR or FinCEN-114.
Most all foreign financial accounts are reportable on form FinCEN-114 however, only certain investment and bank accounts are reportable on a FATCA form 8938.
ACA advocates for the simplification in these two bank account reporting systems to reduce confusion and risk of error in filing. This is in line with recommendation by the Taxpayer Advocate to insure that the legislative goals are achieved without unduly burdening filers with double reporting.
ACA also advocates for increased vigilance by the IRS on data security for Americans abroad who are filing sensitive information on their bank account numbers, bank addresses and balances via the internet and directly through foreign bank and foreign government exchanges with the United States IRS and Treasury (IGA agreements).
US Citizens (and US persons*) who own or have signatory authority on one or more foreign bank accounts which, at any point during the year, reached an aggregate balance of over $10,000 is obliged to file a Foreign Bank Account Report (FBAR) -- form FinCEN form 114 (formally known as TD F 90-22.1) with the US Treasury Department. Individuals who qualify must file regardless of whether an individual owes US taxes.
FBAR, instituted in the 1970s became more actively enforced post 9/11, given the attention to terrorist financing and the recent interest in combating tax evasion. The Overseas Voluntary Disclosure Programs provided a way forward for those who had willfully evaded paying taxes and had not filed FBARs however, these programs were never intended for individuals who out of ignorance or error had not filed.
In 2014 the IRS opened the “Streamlined Filing Procedure,” based on a recommended proposal by ACA, for individuals looking to come into compliance but who were not willful in their oversight in filing FBARs.
Previously the filing deadline for was June, 30 of each calendar year. However, beginning in 2016 the FBAR filing deadline will be aligned with the April 15th deadline for US tax reporting. As with individual income tax returns, US citizens residing abroad will receive an automatic extension of time to file the FBAR until June 15, with an additional four-month extension available to October 15. FBARs can only be filed electronically (see details below)
* (1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.” To learn more about FBAR and how it might impact you, you can consult the IRS website or speak to your tax adviser for more information. Note that as of July 1, 2013 all FBAR's must be filed electronically.