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If you are a U.S. citizen, resident, or business owner, you may be required to file tax forms disclosing your offshore assets and income. For instance, you may be required to file an online tax form known as the FBAR, or FinCEN Form 114. If you have a bank account, mutual funds, life insurance policies, or other assets located outside the U.S., our international tax attorneys can help you determine whether the funds are reportable to the IRS or Financial Crimes Enforcement Network (FinCEN).
For a reduced-rate tax consultation, contact the Tax Law Office of David W. Klasing online, or call our tax offices today at (805) 617-4566. From our conveniently located offices in San Jose, our FinCEN Form 114 attorneys and CPAs serve taxpayers throughout California and across the globe. Note: All of our satellite offices including San Jose are appointment only.
See our 2011 OVDI Q and A Library
See our FBAR Compliance and Disclosure Q and A Library
See our Foreign Audit Q and A Library
What is the FinCEN Form 114?
FinCEN Form 114 is a tax form that can only be filed electronically. Instead of the IRS, taxpayers file the form directly with FinCEN, which is the Financial Crimes Enforcement Network. The only way to file FinCEN Form 114 is online using the government’s official BSA E-Filing System.
U.S. taxpayers use FinCEN Form 114 to report foreign accounts and assets to the federal government. The criteria that trigger filing requirements are explained in detail below.
Is FinCEN Form 114 the Same as FBAR?
In tax terminology, there are sometimes multiple names for the same form or law, creating confusion among taxpayers. FinCEN Form 114 is an example of this. FinCEN Form 114 is also known as the “FBAR,” or Foreign Bank Account Report. The FBAR/FinCEN Form 114 used to be called “Form TD F 90-22.1,” but this version is no longer used. FBAR should not be confused with FATCA, or the Foreign Account Tax Compliance Act, which – like the FBAR requirement – mandates the disclosure of offshore assets beyond certain monetary thresholds.
Who is Required to File FinCEN Form 114?
Unless an exemption applies, you are required to file FinCEN Form 114 if you (1) meet the IRS’ definition of a “U.S. person; (2) have “financial interest in or signature authority over” an account or asset located outside the U.S. (including foreign bank accounts, foreign mutual funds, and certain foreign-issued life insurance); and (3) the value of such account(s) exceeded $10,000 at any point during the tax year. The IRS explains the concepts of “signature authority” and “financial interest” in depth in IRM 4.26.16 (Report of Foreign Bank and Financial Accounts (FBAR)), at sections 4.26.16.3.4 and 4.26.16.3.3, respectively.
Do Businesses Have to File FinCEN Form 114?
Yes, if the above criteria apply. U.S. business entities, including corporations, LLCs, and partnerships, are included in the definition of “U.S. person.”
Do Resident Aliens Have to File FBAR?
Yes, if the above criteria apply. Resident aliens, such as permanent resident aliens (colloquially “green card holders”), are included in the definition of “U.S. person.”
Do Non-Residents Have to File FBAR?
Non-residents are generally exempt from FBAR filing requirements, but may be subject to FATCA, and therefore be required to file Form 8938 (Statement of Specified Foreign Financial Assets).
What is the Due Date for FinCEN Form 114?
FinCEN Form 114 is generally due on April 15, conveniently coinciding with the due date to file a tax return. This date may shift in certain tax years due to the timing of weekends or federal holidays.
What is the Penalty for Not Filing FinCEN Form 114 (FBAR)?
FBAR compliance is crucial due to the severe penalties – not only financial but potentially criminal – arising from violations. Even non-willful (i.e. negligent) FBAR violations are punishable by fines of up to $10,000, meaning FBAR penalties can accumulate quickly in instances where there are multiple tax years with unfiled FBARs.
If the violation is determined to be “willful,” or intentional, the case takes on a different light. Willful noncompliance with tax laws amounts to fraud, which is a criminal matter. You could be prosecuted by the Department of Justice (DOJ), imprisoned, and fined up to 50% of the unreported account balance or $100,000 – whichever is greater.
Get FBAR Filing Help from International Tax Attorneys and CPAs in San Jose, CA
Failure to file FinCEN Form 114 could trigger an FBAR audit or other foreign account tax audit, exposing you to debilitating civil penalties and even the risk of a criminal tax investigation. Fortunately, you can avoid these issues by working with a knowledgeable and experienced tax attorney in San Jose. Even if you have concealed assets in the past, it may be possible to avoid prosecution by making a voluntary disclosure – but not if a tax audit or IRS criminal investigation is already underway.
Do not lose another moment of valuable time to deal with your FinCEN Form 114 compliance issue. For a reduced-rate tax consultation, contact the Tax Law Office of David W. Klasing online, or call our tax firm in San Jose at (805) 617-4566 to speak with a FinCEN Form 114 lawyer today. Please note meetings at our San Jose tax office must be scheduled in advance.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney-client relationship. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment-only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, whose main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment-only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here:
