Does Pope Leo XIV Need To File an FBAR? Probably Not – but You Might

Last week, the Catholic Church made history by electing Pope Leo XIV, the first American-born pontiff, in what became the shortest conclave on record. Raised in Chicago and having served in Peru, he brings global experience to the papacy - but likely zero U.S. tax obligations.

Still, his election reminds us: if you have foreign financial ties, the IRS and Treasury might be more interested than you think.

What Is FBAR and Who Must File?

The FBAR (Foreign Bank Account Report) - officially FinCEN Form 114 - is required for any U.S. person (citizen, resident, entity, trust, or estate) who has a financial interest in or signature authority over one or more foreign financial accounts exceeding $10,000 in total at any time during the calendar year.

The report must be electronically filed with FinCEN, a bureau of the U.S. Department of the Treasury, and separate from your tax return. While FinCEN administers the rule, the IRS enforces it - which means penalties and audits often originate there.

A Common Oversight: Signature Authority

Most people these days who reside overseas know that they need to report any personal foreign accounts they hold on an FBAR if the aggregate balance of those accounts exceeds $10,000.

But did you know that if you have signature authority over a foreign employer's bank accounts you may also have a filing requirement?

Here's the nuance:

If you live overseas, work for a foreign employer, and only have signature authority - with no personal financial interest in the account - you are still required to file. However, you are only required to disclose your personal information and your employer's name and address. You do not need to report the bank name, account number, or balance.

This aligns with FinCEN's official guidance: U.S. persons meeting these conditions need only complete Part I and Items 34-43 of Part IV of the FBAR. This tailored reporting approach strikes a balance between regulatory compliance and protecting sensitive business data.

The Penalties Are Steep

If you are thinking of skipping this filing - don't. Non-willful violations can cost up to $10,000 per violation, while willful violations can result in the greater of $100,000 or 50% of the account balance. The IRS has enforced these penalties aggressively, even when taxpayers were unaware of their obligations.

And if you have signature authority over multiple accounts? If your actions are willful, each one counts.

Final Thought

Pope Leo XIV may be able to sidestep FinCEN, but if you're holding, managing, or simply signing on foreign accounts, you can't afford to ignore FBAR. The IRS is watching.

Common Pitfalls We See:

• Relied solely on their accountant (who missed it).
• Misunderstood what qualifies as a "foreign account".
• Thought signature authority didn't count.
• Confused FBAR with Form 8938 under FATCA.
• Didn't realize even brief or inactive accounts still count toward the $10,000 threshold.

If you Just realized you've missed years of FBAR filings, have signature authority you didn't know triggered reporting, or need to explore options like the Streamlined Filing Compliance Procedures or Voluntary Disclosure Program - we can help. At Brager Tax Law Group, our former IRS attorneys with decades of insider experience have successfully represented clients facing audits, penalty assessments, and criminal referral risk. Call us at 310.208.6200 for a complimentary consultation or visit www.bragertaxlawgroup.com for more information.

---