For Ann Arbor residents with foreign financial accounts, the Bank Secrecy Act requires U.S. persons with economic interest in or signature authority over foreign accounts to file an FBAR (FinCEN Form 114) when the aggregate value exceeds $10,000 at any time during the calendar year.
The FBAR is not a tax return. It is a separate reporting requirement enforced by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). The purpose is to detect and prevent money laundering, terrorist financing, and offshore tax evasion. The Internal Revenue Service also uses FBAR reporting to monitor compliance with income tax treaties and related tax law.
You must file an FBAR if you are a United States person (citizen, resident, corporation, partnership, LLC, trust, or estate) and:
Reportable accounts include:
Even if you only have signature authority without ownership, you may still be required to file.
The FBAR filing deadline aligns with the tax return deadline, but it is filed separately through the BSA e-filing system. An automatic extension is available, but late filing without reasonable cause can trigger penalties.
The annual report must include the maximum value of each foreign financial account during the calendar year and complete information about the financial institution where the account is located. This includes accounts held in a foreign country by a governmental entity, an employer, or any other authority.
Our FBAR lawyers in Ann Arbor assist clients in resolving missed filings and avoiding unnecessary penalties. Options include:
Delinquent FBAR Submission Procedures
Reasonable Cause Statements
Voluntary Disclosure Program
Failing to meet FBAR filing requirements can lead to:
We have seen clients lose sleep over these issues. Our goal is to help Ann Arbor residents with compliance strategies that resolve the problem without crippling penalties.
Our Ann Arbor law firm focuses on international tax and FBAR compliance. We help clients with foreign income, foreign pensions, retirement plans, and other financial accounts located abroad. We also review how income tax treaties and tax forms interact with FBAR reporting requirements.
We reduce exposure to FBAR penalties through strategies tailored to each client. Whether through a consolidated FBAR filing or individual account reporting, we work directly with FinCEN and the IRS to secure the best possible outcome.
We begin with a detailed review of your foreign bank accounts, tax returns, and filing history. This helps us determine whether you must file an FBAR, report signature authority, or address more complex issues involving multiple foreign financial institutions.
We design a compliance plan based on your situation. For clients with accounts in several foreign countries, we often create phased strategies that prevent penalties while achieving full compliance.
We prepare the FBAR through the BSA e-filing system, handle all required tax forms, and represent you in communications with the Internal Revenue Service and Financial Crimes Enforcement Network.
When the process is complete, you will have documentation of full compliance and a clear understanding of your ongoing reporting requirements for each calendar year.
Any account held with a financial institution located outside the United States, including bank accounts, brokerage accounts, mutual funds, and certain types of retirement plans.
If the combined maximum value of all your foreign accounts exceeded $10,000 at any point during the calendar year, you must file an FBAR for all accounts.
Late filing does not always mean severe penalties. With reasonable cause documentation or voluntary disclosure, we can often resolve the issue and bring you into full compliance.
FBAR problems do not go away on their own. Each calendar year adds new reporting requirements, and waiting only increases the risk.
Call our Ann Arbor tax attorneys today at (248) 262-3400 for a free case review. We will explain your options, prepare a plan, and guide you towards full compliance.
