Delinquent FBAR Submission Procedure

Blue Water Bridge, connecting Port Huron, Michigan and Sarnia, Ontario

When a client needs to file FinCEN Forms 114, Report of Foreign Bank and Financial Accounts (“FBARs”) or amended FBARs over the preceding six years, we prepare them and, once the client has reviewed and approved them, file them. We do this as soon as possible, for if the client corrects the delinquency before the U.S. Treasury becomes aware of it, there will be no penalty.

Foreign financial accounts held by a corporation are reportable on the FBAR of a shareholder owning more than 50 percent of the corporation’s stock.

The penalty for failure to file an FBAR is $10,000. But is the delinquency is determined to be willful, the penalty is the greater of $100,000 or 50 percent of the aggregate value of the unreported accounts. Neither penalty has ever been assessed against one of our clients.

The reason for the six-year look-back period is that the statute of limitations on assessment of an FBAR penalty is six years from the due date (as extended) of the FBAR, whether or not the FBAR has been filed.