FBAR stands for Foreign Bank Account Report, and refers to TD F90-22.1 Report of Foreign Bank and Financial Accounts. It must be filed by U.S. citizens and U.S. residents if the person has a financial interest in, or signatory authority over a foreign financial account, and the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. Thus if the account had more than $10,000 on any one day during the year the FBAR is required to be filed.

The FBAR form must be filed on June 30th, and it is mailed to U.S. Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621. It is not filed with your income tax return, and there is no extension of time for filing the FBAR.  The extension of time to file your income tax return does not extend the time to file the FBAR. The form must actually be received by the IRS by June 30th. Unlike with tax returns it is not sufficient if the FBAR is mailed by June 30th. Our tax lawyers recommend sending the FBAR by certified mail, return receipt requested in order to establish that the FBAR was timely filed if there is ever a question. 

The penalties for failing to file an FBAR are serious. In addition to possible jail time the penalty for willfully failing to file an FBAR  is the GREATER of $100,000 or 50% of the balance in the account. This penalty may be imposed for each year that the account is open. The only limitation is the six year statute of limitations. As a result the penalty for failing to file FBARs can reach 3 times the balance in the account. On small accounts the situation is even worse. An account with a balance of $15,000 for each of six years could potentially incur a penalty of $600,000.