If you hold a financial interest in, or signature authority over, a foreign bank account, brokerage account, or other offshore financial account, federal law requires you to report it annually to the Financial Crimes Enforcement Network (FinCEN) by filing FinCEN Form 114 — commonly known as the FBAR. The penalties for failure to file are among the harshest in the Internal Revenue Code. Philip Falco, Attorney, CPA, prepares and files FBARs for individuals, corporations, partnerships, and trusts, and represents clients who have unfiled or deficient FBARs before the IRS.

You must file an FBAR for any calendar year in which the **aggregate maximum value** of all your reportable foreign financial accounts exceeds **$10,000 at any point during the year**. The threshold is aggregate — one account holding $6,000 and another holding $5,000 triggers the filing requirement even though neither account alone crosses $10,000.

Reportable accounts include:

– Foreign bank accounts (checking, savings, time deposits)
– Foreign brokerage and securities accounts
– Foreign mutual funds
– The cash surrender value of a foreign whole life insurance policy
– Foreign pension and retirement accounts (in many cases)
– Accounts over which you have signature authority but no financial interest (common for officers of multinational companies)

**U.S. persons** required to file include U.S. citizens, U.S. residents (green card holders and substantial presence test filers), and entities formed under U.S. law — regardless of where they live or operate.

FBAR Deadline and How to File

The FBAR is due **April 15** of the year following the calendar year being reported, with an automatic extension to **October 15** — no extension request is required. FBARs are filed electronically through the BSA E-Filing System; they are not filed with your tax return and are not submitted to the IRS.

Because the filing system requires precise account classification and maximum value calculations, errors are common when taxpayers file without professional guidance. We prepare the FinCEN 114 from your account statements, handle electronic submission, and provide you with a filed copy and confirmation number.

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FBAR Penalties: The Stakes Are High

The FBAR penalty structure is severe and bears no relation to your tax liability. The IRS enforces FBAR penalties under 31 U.S.C. § 5321.

**Non-willful violations:** Up to **$10,000 per account per year** (adjusted for inflation; currently $16,117 per violation). The Supreme Court’s 2023 decision in *Bittner v. United States* held that the non-willful penalty is assessed per form, not per account — a significant win for taxpayers, but the IRS continues to contest this interpretation in some cases.

**Willful violations:** The greater of **$100,000 per account per year** or **50% of the account balance** at the time of the violation. Willful violations can also result in criminal prosecution under 31 U.S.C. § 5322, carrying fines up to $250,000 and up to five years imprisonment.

**Structuring:** Moving money to keep account balances below the $10,000 reporting threshold is a separate federal crime.

FBAR vs. FATCA Form 8938: Understanding the Difference

Many clients are confused by the overlap between the FBAR and IRS Form 8938 (Statement of Specified Foreign Financial Assets), filed under FATCA with your Form 1040. These are separate requirements with different thresholds, different filing agencies, and different penalty regimes — and satisfying one does not satisfy the other.

We analyze both requirements together and prepare all necessary filings in a coordinated engagement.

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Unfiled FBARs: How to Come Into Compliance

If you have one or more years of unfiled FBARs, voluntary disclosure is almost always the right path — and the sooner, the better. The IRS offers two primary offshore compliance programs:

**Streamlined Domestic Offshore Procedures (SDOP):** For U.S. residents whose failure to file was non-willful. Requires filing amended returns for the three most recent tax years, FBARs for the six most recent years, and payment of a 5% miscellaneous offshore penalty on the highest aggregate balance. No FBAR civil penalties assessed separately.

**Streamlined Foreign Offshore Procedures (SFOP):** For U.S. persons residing outside the United States who meet the non-residency requirement. No miscellaneous penalty applies.

We evaluate which program fits your situation, prepare all required filings, draft the required non-willful certification where applicable, and manage the IRS submission process from start to finish.

Our FBAR Filing Process

1. **Initial consultation** — We assess your filing requirement, account profile, and compliance history.
2. **Document collection** — We provide a tailored checklist of what we need from each financial institution.
3. **Preparation** — We calculate maximum values, classify accounts, and prepare FinCEN 114 (and Form 8938 if required).
4. **Review and submission** — We review the completed filing with you, submit electronically, and provide confirmation.
5. **Ongoing compliance** — We can coordinate annual FBAR filing with your tax return preparation going forward.

Frequently Asked Questions

**Does a foreign pension count as an FBAR account?**
Generally yes, if it is a financial account at a foreign financial institution. However, some foreign pension plans established under treaty may be excluded. Analysis is fact-specific.

**I have signature authority over my employer’s foreign account but no personal financial interest. Do I have to file?**
Yes, unless an exception applies. Signature authority triggers the filing requirement regardless of financial interest.

**What if the foreign account produced no income?**
The FBAR is a reporting requirement, not a tax form. Zero income does not eliminate the obligation to file if the aggregate threshold is met.

**Can I file an FBAR myself?**
The BSA E-Filing System is publicly accessible, but errors in account classification, maximum value calculation, or account type are common. Given the penalty exposure, professional preparation is strongly advisable.

**What is the statute of limitations for FBAR penalties?**
Six years from the filing deadline for the relevant year, under 31 U.S.C. § 5321(b)(1).

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Contact Us

For a free quote on FBAR preparation or an offshore compliance evaluation, call **(303) 626-7000** or email [Phil@ColoradoLegal.com](mailto:phil@coloradolegal.com). Philip Falco, Attorney, CPA, handles international tax compliance personally — your matter is never delegated to a non-attorney preparer.

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*Philip Falco, Attorney, CPA · 730 17th Street, Suite 900 · Denver, CO 80202*

The Report of Foreign Bank and Financial Accounts is a critical component to United States compliance. FBARs must be filed electronically and it is not filed with your United States tax return. We take the hassle out of registering and the guess work out of filing; Philip Falco, Attorney, CPA is a registered FBAR BSA electronic filer. We provide this valuable service at a reasonable price.

Feel free to call us for a free quote (303) 626-7000 or email phil@coloradolegal.com. If you have unfiled FBAR’s we provide representation to enter the Streamlined Domestic Disclosure Program. Our services are provided worldwide.

Our service includes:

We will electronically file your FBAR (E-File).
We will timely file your FBAR.
We provide different levels of service ranging from pure submission to account review and determination. You chose the level of service.
We provide consultation as to what is the maximum balance.
We can amend prior FBAR’s.

An FBAR FinCEN 114 (formerly TD-F 90-22.1, also referred to as Treasury Form 114, and FBAR Online) is a very important filing with the United States Treasury. Here’s why:

FBAR penalties are as harsh as penalties come.
FBAR’s must be completed correctly. For example, the cash surrender value of a foreign whole life insurance policy must be reported on the FBAR.

FBAR Components:

Type of filer: Individual, Partnership, Corporation, Consolidated, Fiduciary.
Social Security Number, TIN, or foreign identification.
Birth date.
Address.
Number of accounts.
Account Maximum Value.
Name and address of financial institution.
Distinguish accounts owned separately, jointly, signature authority, and consolidated report.
Distinguish type of account.
Distinguish accounts where filer has signature authority but no financial interest in the account.

Read our post on What is a Willful Failure to Disclose an Offshore Account?

Feel free to contact us for free quote and for more information.

We can request administrative rulings on very complex issues.