Did you know that if you have a bank account outside of the United States, you may be required to file a Treasury Form 90-22.1 with the U.S. Treasury every year? There are strict penalties in place for those who fail to file this form. Although the regulation is intended to uncover secret off-shore accounts, anyone who has a foreign bank account is swept up by the law.
The Treasury Form 90-22.1, also known as the “Foreign Bank Account Reporting” Form or the FBAR, is a required informational reporting form for reporting off-shore bank accounts to the U.S. Treasury. Every U.S. citizen or U.S. resident, partnership, corporation, estate or trust is required to comply with this filing requirement.
In 2003, the Internal Revenue Service (the “IRS”) took over the enforcement for this reporting requirement. Since then, the IRS has made substantial efforts to increase the rate of compliance. In 2009, the IRS held its first voluntary disclosure initiative, a so-called amnesty program under which citizens with off-shore accounts could disclose that information to the IRS, pay a penalty, and avoid other civil and potential criminal penalties.
The penalties are potentially quite severe, up to the greater of $100,000 or 50% of the balance in the account, per violation, for a willful failure to file, and criminal charges as well. Even a non-willful failure to file carries a potential penalty of up to $10,000.
Please see full publication below for more information.