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 accounts, 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 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 company, domestic or foreign, with a foreign bank account that can initiate wires from the foreign bank account is required to file an 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 electronically filed with the U.S. Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported. For 2013 FBAR reporting, the form must submitted to the U.S. Treasury no later than June 30, 2014.  

Penalty for failure to file a FBAR could be subject to a maximum 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.

If you have any questions, please contact Liting Mitchell, Senior Tax Manager at Berntson Porter, at 425-289-7625 or lmitchell@bpcpa.com.