U.S. citizens or residents who owned, directly or indirectly through an entity, beneficially, or who had power of attorney/signature authority over one or more foreign financial accounts with an aggregate value exceeding $10,000 at ANY point in time during 2013 may be required to report such foreign financial accounts. The definition of a reportable foreign financial account includes any investment account, brokerage account, certain pension funds, cash value life insurance or annuity policy, mutual fund, some commodity accounts, and other types of foreign financial accounts.

U.S. citizens and residents with a reportable foreign financial account are required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). FinCEN Form 114 supersedes TD F 90-22.1, the FBAR form that was used in prior years, and is only available online through the BSA E-Filing System website.

Effective July 1, 2013, the FBAR must be filed electronically. The due date for the FBAR reporting ownership or signature authority during the 2013 tax year is due June 30, 2014. See FBAR overview here.

In addition to the FBAR, certain U.S. taxpayers holding specified foreign financial assets with an aggregate value exceeding $50,000 in 2013 need to report information about those assets on Form 8938, Statement of Specified Foreign Financial Assets, which must be attached to the taxpayer's annual income tax return. Higher asset thresholds apply to U.S. taxpayers who file a joint tax return or who reside abroad. If a taxpayer filed their 2013 income tax return and did not attach a required Form 8938, the income tax return will not be deemed "complete."

If the taxpayer is required to file a Form 8938, be aware that other IRS forms, such as Form 3520, Form 3520-A, Form 5471, Form 8621, Form 8865, or Form 8891 may also be required.

Due to the overwhelming penalties, we highly recommend that all U.S. citizens or residents holding any assets offshore seek proper legal advice to determine if they now possess or in the past possessed an FBAR, Form 8938, or other filing obligation.