FBAR - Filing & Reporting Foreign Bank Account Reporting FinCEN Form 114 Summary Review for 2020.

https://www.goldinglawyers.com

Foreign Bank Account Reporting: In 2020, the IRS Foreign Bank Account Reporting rules continue to evolve.  With the IRS taking an aggressive position, when it comes to foreign accounts compliance, it is important to stay compliant with offshore reporting, to avoid offshore penalties. One of the most common types of foreign account reporting is for foreign bank accounts. While the FBAR is the most common foreign bank account reporting form, there are several other reporting forms, such as FATCA Form 8938, and PFIC Reporting Form 8621.

Foreign Bank Account Reporting & IRS

The Foreign Bank Account Reporting rules are complex. It includes pretty much any type of foreign bank account, including: checking accounts, savings accounts, fixed deposits, stock accounts and investment accounts held at a bank or other foreign financial institution (FFI). If your foreign bank also issues Life insurance policies, that may also require reporting as well. If you have not properly reported in prior years, you will want to consider FBAR Amnesty and not just start filing forward, which can be considered an illegal quiet disclosure.

Foreign Bank Account Reporting may require the disclosure of one or more different International reporting forms. There are many different forms that the IRS has developed, and some of them are more complex than others. The two most basic forms are the FBAR and Form 8938.

FBAR (FinCEN Form 114)

The FBAR is technically referred to as FinCEN Form 114. It is also referred to as "foreign bank account reporting form" or "foreign bank and financial account reporting form."  The form was developed back in the 1970s to support AML (Anti-Money Laundering) initiatives. With with the recent introduction of FATCA Form 8938, the IRS has significantly increased enforcement of FBAR reporting. Each year that a US person has an annual aggregate total of foreign accounts which exceeds $10,000 USD any day of the year, they are required to report the FBAR form.  

We have developed a various articles to assist you with this, including:

How to submit an FBAR
FBAR FAQ
FBAR Penalties

When a person does not timely file the FBAR, they may become subject to significant fines and penalties – which can generally be avoided or abated by submitting to one of the FBAR Amnesty Programs.

Form 8938

Form 8938 was developed in accordance with FATCA. FATCA is the Foreign Account Tax Compliance Act. The purpose of the law is to eliminate offshore evasion and nondisclosure of foreign money to the IRS. Specifically, the form is used to report specified foreign financial assets – which generally will include bank accounts.

We have developed a various articles to assist you with this, including:

FATCA Reporting
FATCA Summary
FATCA Penalties

While these forms are similar, they are not mutually exclusive, and some people will have to file both forms each year.  The reporting requirements for Form 8938 are more comprehensive than the FBAR, but there are different threshold requirements for having to file the 8938. This is unlike the FBAR, which is a straight +$10,000 threshold requirement.

Other International Reporting Forms

While the FBAR and Form 8938 are the two most common International reporting forms for foreign bank accounts, the IRS has developed several more forms in order to keep everything Nice and complicated.

Hear some of the other less common, but equally annoying forms you may have to file:

Form 3520

The form 3520 is used to report foreign gifts, inheritances, and certain trust distributions. The threshold requirements for reporting vary based on the value of the money received, and whether the money came from an individual, business, or trust.

Form 3520-A

The form 3520-A is used to report foreign trusts. The reporting of foreign trusts is relatively complex, and may also include foreign accounts that the trust holds.

Form 5471

The Form 5471 is used to report ownership of, or interest in a foreign corporation. The 5471 form requires an understanding of bookkeeping principles, such as the Assets, Liabilities, and Equities.

Form 8865

The Form 8865 is used to report ownership of, or interest in a foreign partnership. The 8865 form also requires an understanding of bookkeeping principles, such as the Assets, Liabilities, and Equities.

Form 8621

The Form 8621 is used to report PFIC (Passive Foreign Investment Companies). The 8621 reporting rules have become more complex over-time, and if there are excess distributions involved, it can become infinitely more complicated.

Видео FBAR - Filing & Reporting Foreign Bank Account Reporting FinCEN Form 114 Summary Review for 2020. канала Golding & Golding International Tax Lawyers