.

SmartMoney Blogs

The Tax Blog
The latest news, insights and tips about taxes

How to File Foreign Bank Reports

Although the FBAR (Foreign Bank Account Report) has been around for decades, it has loomed large ever since Congress and the IRS learned that Swiss banking giant UBS was encouraging U.S. taxpayers to hide money in Swiss accounts. Following the revelations, Congress imposed new penalties on those with undeclared accounts. This year’s overseas financial accounting reports are due June 30.

Getty Images

For both taxpayers and tax preparers, the FBAR poses problems because the rules are complex and the associated penalties can be draconian. Unusually, they are linked to the size of a foreign account rather than to the amount of unpaid taxes, if any. So what might seem (to some) like the mere foot-fault of missing FBAR filings can wind up swallowing half a foreign account and also putting other assets in jeopardy, say experts.

Because the stakes are high, Andy Mattson, a CPA with Mohler, Nixon & Williams CPAs in Campbell, Calif., says his firm warns clients in three separate ways about FBAR filings. Even then, he says, there are narrow misses: “I had client who said he had no foreign financial accounts, but I knew he was Canadian. So I asked him if he had an SSRP (the Canadian version of an IRA). He did, and he had to file.”

David Lifson, a CPA with Crowe Horwath in New York City, calls the process of filling out an FBAR “counterintuitive.” “With taxes we always strive to be exact and minimize where possible,” he says. “But with FBARs, there could be a margin of safety in overestimating account size.” The reason: No taxes are due with the FBAR, which is an information return, but there could be penalties for understatement. He says that a FBAR can add anywhere from $200 to $1500 to tax preparation fees.

For those seeking more FBAR information, accountant Susan Brown Otto of International Tax Advisory Services in Jeffersonville, New York has assembled a useful checklist (click on PDF) .

Readers, have you ever struggled while completing your FBAR?

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 31)

View all Comments »
    • If you happen to be nonetheless upon the fence: seize your favorite earphones, brain down toward a Easiest Order and request toward plug them into a Zune then an iPod and perspective which a single appears much better toward on your own, and which interface creates yourself smile further more. Then you may understand which is directly for on your own.

      http://www.trackandfieldsports.net

    • Apple now incorporates Rhapsody as an app, which is a perfect start out, but it is at present hampered by the incapacity in direction of shop domestically upon your iPod, and is made up of a dismal 64kbps bit value. If this modifications, then it will rather negate this ease for the Zune, still the Ten music per month will still be a massive plus within just Zune Pass’ like.

      http://www.thestaycations.org

    • The refreshing Zune browser is remarkably very good, yet not as very good as the iPod’s. It works well, nonetheless is just not as fast as Safari, and is made up of a clunkier interface. If yourself from time to time plan upon taking the web browser that’s not an issue, yet if you might be planning towards study the world-wide-web alot versus your PMP then the iPod’s larger sized display screen and far better browser might be vital.

      http://www.figureskatingsports.net

About The Tax Blog

  • The Tax Blog brings together a team of award-winning tax journalists from the Dow Jones network and around the web to examine the tax issues, changes and legislation that affect families, investors and small business owners. Our contributors include Tax Report columnist Laura Saunders (WSJ), Tax Guy columnist Bill Bischoff and senior reporter Jilian Mincer (SmartMoney.com), retirement-focused reporter Anne Tergesen (WSJ), wealth management writer Arden Dale (Dow Jones Newswires), TaxWatch columnist Eva Rosenberg and personal finance reporter Andrea Coombes (MarketWatch), and reporter Alyssa Abkowitz (SmartMoney). They’ll provide the latest news and insight, mine the tax code for tips and loopholes, and answer your questions about tricky tax situations. Contact the The Tax Blog with ideas, suggestions or tax questions at thetaxblog@dowjones.com.

.