Foreign Bank Account Report (FBAR)

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 foreign financial accounts are reportable on form FinCEN-114; however, only certain investment and bank accounts are reportable on FATCA form 8938.

US Citizens 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 are obliged to file a Foreign Bank Account Report (FBAR) -- form FinCEN form 114 with the US Treasury Department. Individuals who qualify must file regardless of whether an individual owes US taxes.

FBAR, instituted in the 1970s, has became more actively enforced in recent years, 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 for not filing FBAR.

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 recommendations by the Taxpayer Advocate to insure that the legislative goals are achieved without unduly burdening filers with double reporting.