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FBAR/Form 114

FBAR/Form 114 – Foreign Bank Account Reporting

The FBAR, or Form 114, is not an IRS form or a tax form. This form is required by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The FBAR is required whenever a U.S. person has a non-U.S. financial account that, at any point in the year, has or had a balance of more than $10,000 USD (converted from the currency of the account if it is not in USD). If the person has more than one U.S. account, this is looked at in aggregate, meaning if Account #1’s highest balance was $6,000 and Account #2’s highest balance was $4,001 both accounts must be reported. Likewise, if there is a third account with its highest balance of $0.01, then that account must be reported as well, since the $10,000 USD threshold was crossed.

Any U.S. based LLC or corporation counts as a US person under the definition used for the FBAR. This is not an IRS form. The term “disregarded entity” that is used for taxes does not mean anything here.

The FBAR is due by April 15th of each year. If it is not filed on time there is an automatic extension until October 15th.

FBAR penalties can be very severe.

A common question that comes up is whether or not non-USD Wise accounts count as foreign on the FBAR. There are very qualified experts that say YES, and some that say NO. It is our opinion that YES, non-USD Wise accounts count as foreign on the FBAR, but to the extent that there is any doubt, our advice is to FILE. There is no tax.

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