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Reporting of Foreign Bank and Financial Accounts (FBAR)
Report of Foreign Bank and Financial Accounts (FBAR), also known as TD F 90-22.1, is required to be filed for each "U.S. person" who has financial interest in, or signature or other authority over foreign financial accounts that have aggregate value exceeding $10,000 at any time during the calendar year. A "U.S. person" is defined as:
1. A U.S. citizen or resident (Green Card holder), or

2. A U.S. entity. This includes a corporation, a partnership, a trust, or LLC.


A financial account includes a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution. Commodity futures or options account, an insurance policy with cash value, and shares in a mutual fund are also considered to be financial accounts for FBAR reporting purposes. A foreign financial account is a financial account located outside of the U.S. An account maintained with a branch of a U.S. bank that is physically located outside of the U.S. is also considered a foreign financial account.


If the U.S. person (individual or entity) is the owner of record on the foreign account, FBAR filing may be required if the aggregate value exceeds $10,000 at any time during the year. A U.S. person (individual or entity) is also treated as having financial interest in the foreign account if the U.S. person owns directly or indirectly more than 50% of the voting power, profit interest or total value of the shares of an entity who is the owner of record of a foreign account.  


FBAR reporting is also required by a U.S. individual who has signature or other authority over foreign bank and financial accounts. For example, the CFO of a U.S. company with a foreign bank account that can initiate wires from the foreign bank account is required to file a FBAR reporting his/her authority over the foreign account if the aggregate account value exceeds $10,000 at any time during the year.


The FBAR must be received by the U.S. Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported. For 2012 FBAR reporting, the form must be received by the U.S. Treasury no later than June 30, 2013. However, because June 30th falls on a Sunday this year, the form must be received by the U.S. Treasury no later than Friday, June 28th. Unfortunately, FBAR cannot be extended. Thus, it is imperative that the report is mailed in time to ensure receipt by the U.S. Treasury no later than June 28th.


Penalty for failure to file a FBAR could be subject to a maximum penalty of $10,000 per account. If the U.S. Treasury determines that the failure to file is due to willfulness, the penalty is the greater of $100,000 or 50% of the amount in the account at the time of violation. Willful violation may also be subject to criminal penalties.


Berntson Porter & Company is pleased to introduce its internationally-focused tax group, providing expertise in international tax advice, guidance, consultation, and U.S. tax compliance. Berntson Porter is a member firm of PrimeGlobal, an association of independent accounting firms, connecting U.S. firms and their clients to tax and audit partners and services world-wide. If you would like more information on our International Tax Group, please contact Liting Mitchell, Senior Tax Manager at Berntson Porter at 425-289-7625 or

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