What is the history of the FBAR?

What is the history of the FBAR?

2022-06-27 22:46:17

The FBAR, or Foreign Bank and Financial Accounts Report, is a U.S. Treasury form that must be filed by certain U.S. taxpayers who have financial interests in or signature authority over foreign financial accounts. The FBAR is used to help the U.S. Government identify taxpayers who may be evading taxes by using offshore accounts.

The FBAR was first introduced in 1972 as part of the Bank Secrecy Act. The act required U.S. citizens to report any foreign accounts that they held, and gave the Treasury Department the authority to impose penalties for failure to comply. In 2004, the FBAR rules were amended to require taxpayers to report any foreign accounts that had a balance of $10,000 or more at any time during the year.

In recent years, the IRS has been aggressively pursuing taxpayers who have failed to file FBARs. In 2014, the agency began issuing "John Doe" summonses to banks in an effort to obtain information about American taxpayers with undeclared foreign accounts. The IRS has also used data from the Panama Papers leak to identify taxpayers with hidden offshore accounts.

Failure to file an FBAR can result in steep penalties, including a fine of up to $10,000 and possible jail time. taxpayers who fail to disclose their foreign accounts may also be subject to civil and criminal penalties under the Internal Revenue Code.

If you have a foreign financial account, it is important to ensure that you are in compliance with the FBAR rules.

Erwin Mattegon