FBAR filing requirements clarified by IRS: did you miss the filing date?

A U.S. person is required to file the FBAR (Report of Foreign Bank and Financial Accounts) in 2014 should note that the mechanics of filing the FBAR have changed from previous years. In September 2013, the new FinCEN Form 114 superseded the Treasury Department Form 90-22.1, which was the form formerly used to file with the IRS. Form 114 is available in electronic form only. Just prior to the due date this year, the IRS also disclosed clarification as to certain definitions relative to who is required to file and what is required to be disclosed.  Anyone with foreign holdings who has not filed using the new reporting form should review the following clarifications to be sure they do not apply:

Rod Lundquist, senior program analyst for the IRS Small Business/Self-Employed Division, said during a recent IRS webcast:

  • Filers should go to and use the BSA E-Filing system to file Form 114 reporting assets held during 2013 by the June 30, 2014 deadline. Filers may file a single FBAR without having previously obtained a log-in username and password.
  • The requirement to FinCIN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) applies to U.S. persons with a financial interest in or signature authority over a foreign financial account (or accounts) with aggregate value of more than $10,000 at any time during the calendar year for which the report is due.
  • FBARs for the 2013 year are due June 30, 2014. Determining who is a U.S. person, what constitutes a financial interest, and what accounts are covered, therefore, is especially relevant at this time since the deadline for 2013 has passed.
  • U.S. citizens. A U.S. person for purposes of being subject to FBAR reporting, may be a U.S. citizen, regardless of where in the world the citizen lives.
  • U.S. residents. A U.S. person may also be a U.S. resident, as defined under Code Sec. 7701(b). The status of U.S. residents is determined by reference to the green card test or the substantial presence test. A green card holder is considered to be a U.S. resident regardless of the individual’s physical residence. For those not holding a green card the substantial presence test is used, without regard to tax treaties.

As stated, a U.S. person must have either a financial interest or signature authority in the foreign financial account to become subject to the FBAR filing requirements.

  • “Financial interest” generally means that a U.S. person holds the title to the account directly, or in other words is the owner of record.
  • The term “signature authority” means the authority of an individual, alone or in conjunction with another individual, to control the disposition of assets held in a foreign financial account by direct communication, whether in writing or otherwise, to the bank or other financial institution that maintains the financial account.

Mr. Lundquist continued to provide additional contextual material as follows:

  • “Financial account” for FBAR purposes is defined as including accounts with financial institutions that contain cash or reportable noncash assets. Examples of financial accounts that an FBAR filer would be required to report include bank accounts (such as savings, checking, and certificate of deposit accounts), mutual funds, and brokerage accounts. Also reportable are accounts with brokers or dealers of commodities options or futures. Insurance policies that have a cash value are also financial accounts for FBAR reporting purposes, Lundquist said.
  • Mr. Lundquist further clarified the issue as to whether business entities were subject to this filing by stating: “The preamble to the regulations makes clear that officers or supervisors who approve account dispositions by a subordinate but cannot dispose of the account assets themselves, do not have signature authority.” He added that, only human beings, and not business entities, can have signature authority.
  • “Account means there is an established relationship with a financial institution, or a person acting as a financial institution, that constitutes an account relationship,” Lundquist said. He explained that for this reason, stock held in a brokerage account is reportable, but shares of public stock held directly by a U.S. person are not reportable. “This is because the directly held shares are not maintained in an account with a financial institution.”
  • A “mutual fund” for FBAR filing purposes is defined as a fund that issues shares available to the general public and that has a regular net asset value determination and regular redemptions. “This is important, because we know that foreign funds often use the term ‘mutual fund’ to mean something that does not meet this definition, and thus they would not be reportable,” Lundquist said.
  • The term “financial account” does not include an interest in real estate, personal property such as coins, jewels, collectibles, or precious metals. FinCEN also has stated that for now it will not treat foreign hedge funds and private equity funds as reportable accounts.
  • “For right now, FinCEN has said that virtual currency is not going to be reportable on the FBAR, at least for this filing season,” he said. “That could change in the future,

Some types of accounts are exempted from the FBAR requirements. These include:

  • An account held in a U.S. military banking facility
  • Accounts of U.S. governmental entities
  • International financial institutions
  • Correspondent or “nostro” accounts
  • Accounts held in an Individual Retirement Account (IRA) (if owner or beneficiary)
  • Accounts held in a tax-qualified retirement plan (if participant or beneficiary)

DISCLAIMER: This information is extracted with permission from IRS releases.  We are not responsible for the application of this general information to the specific circumstances of a reader unless we have been engaged as the reader’s tax preparer and specifically requested to assist with the reader’s FBAR filing.

ASSISTANCE:  If you need help in preparing your income tax returns,  Roy & Associates, PC may be able to be of assistance.  Our firm and its predecessor firms have been providing tax services to individuals and small businesses in southwestern Pennsylvania since 1942.  You may make  an appointment with one of our Directors of Audit and Tax Services, all of whom are well-versed in personal income taxation.  See the CONTACTS page above.  Standard rates and terms for service will apply.


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