FBAR (FinCEN Form 114)

The FBAR is the Report of Foreign Bank and Financial Accounts, filed on FinCEN Form 114. Any US person with a financial interest in, or signature authority over, foreign financial accounts whose aggregate value exceeds $10,000 at any time during the calendar year must file one. It is a Bank Secrecy Act report, not a tax form, which is the fact that drives most of what goes wrong with it.

Three features of the threshold catch filers out. It is an aggregate test across all foreign accounts, not a per-account test, so ten accounts holding $1,500 each trigger it. It is a high-water-mark test measured at any moment in the year, not a year-end balance, so an account that briefly held sale proceeds counts even if it closed at zero. And the same dollars can be counted twice: money moved between two foreign accounts during the year contributes its maximum value to each.

"US person" reaches citizens, residents, and domestic entities including corporations, partnerships, LLCs, trusts, and estates. "Financial interest" covers accounts the person owns and accounts held by an entity the person controls. "Signature authority" is the trap for firm clients: an employee, officer, or controller who can direct disposition of funds in an employer's foreign account has a personal filing obligation even with no economic interest in a dollar of it. Reportable accounts include bank accounts, securities accounts, certain foreign pensions and insurance products with cash value, and accounts held at foreign branches of US institutions. Foreign real estate held directly and foreign stock held in a US brokerage account are not reportable here.

The FBAR is filed electronically through the BSA E-Filing System, separately from the income tax return. The deadline is April 15, with an automatic extension to October 15 that requires no request and no form. Filing an extension for the income tax return does nothing for it, and neither does filing the return itself.

Penalty exposure is severe relative to the effort of filing. Non-willful violations carry a penalty per report, capped at a statutory amount adjusted annually for inflation. The Supreme Court settled that point in Bittner v. United States (2023), holding the non-willful penalty applies per annual report rather than per unreported account, which cut exposure dramatically for filers with many small accounts. Willful violations are a different order of magnitude: the greater of a statutory floor or 50% of the account balance at the time of the violation, per year, with criminal exposure available in the worst cases. Delinquent filers with no unreported income and no prior contact from the IRS should look at the delinquent FBAR submission procedures before filing quietly.

The FBAR and Form 8938 overlap but are not substitutes. Different filer definitions, different thresholds, different asset scope, different agencies, and only one of them is attached to the return. Clients who need one very often need both.

Related terms: Form 5471, Subpart F Income, Foreign Tax Credit, Form 1040

Go deeper: Form 5471: Who Must File, Every Schedule, and the Errors That Trigger Penalties

Screening a client base for FBAR exposure means reading account listings, entity charts, and signature cards, not just the prior year's return. Adopt's agents extract account-level detail from statements and documents and surface the filers a rollforward would miss. Sign up free.