When Does the IRS Consider You a U.S. Person for FBAR Purposes?

2025-08-12 14:27:42

 Not sure if you count as a U.S. person for FBAR? Learn who must file and when the IRS considers you subject to FBAR rules.

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Who Needs to File an FBAR? Understanding U.S. Person Rules

If you’ve ever lived abroad, opened a foreign bank account, or inherited assets overseas, you’ve likely heard about the FBAR — the Foreign Bank Account Report. But a question that causes confusion for many expats and dual citizens is: “Do I actually have to file one?”

The answer depends on whether the IRS considers you a “U.S. person” for FBAR purposes. And their definition is broader than many people realize.

In this article, we’ll break down who qualifies as a U.S. person under FBAR rules, what that means for your filing requirements, and some common scenarios where people mistakenly think they don’t need to file — but actually do.

What Is the FBAR and Who Must File It?

The FBAR — officially known as FinCEN Form 114 — must be filed by U.S. persons who have foreign financial accounts exceeding $10,000 in total aggregate value at any time during the calendar year. The form is filed electronically with the Financial Crimes Enforcement Network (FinCEN), not the IRS, though the IRS is tasked with enforcement.

But the first step in determining whether you're required to file is figuring out if you qualify as a “U.S. person.”

Definition of a “U.S. Person” for FBAR Purposes

According to FBAR regulations, the term “U.S. person” includes:

• U.S. citizens (even if they live abroad)
  
  

• U.S. residents (including green card holders)
  
  

• Entities formed under U.S. law, such as:
  
  

• Corporations
  
  

• Partnerships
  
  

• LLCs
  
  

• Trusts
  
  

• Estates
  
  

Let’s look at each category more closely.

1. U.S. Citizens

This one’s simple. If you are a U.S. citizen — even if you’ve lived abroad for decades, hold dual citizenship, or have never lived in the U.S. as an adult — you are still a U.S. person in the eyes of the IRS. That means you are subject to FBAR filing requirements, provided your foreign accounts exceed the reporting threshold.

Common Mistake:
Some U.S. citizens living abroad assume that moving away or taking on another nationality (like Canadian or Australian) cancels their FBAR obligations. That’s not the case unless you formally renounce your U.S. citizenship and receive a Certificate of Loss of Nationality.

2. U.S. Residents (Green Card Holders and Substantial Presence Test)

Even if you aren’t a U.S. citizen, you may still be classified as a U.S. person if:

• You hold a valid U.S. green card, even if you reside abroad.
  
  

• You meet the Substantial Presence Test (SPT) under IRS rules.
  
  

The Substantial Presence Test considers how many days you’ve spent in the U.S. over the current and prior two years. You meet the test — and become a U.S. resident for tax and FBAR purposes — if:

• You were physically present in the U.S. for at least 31 days during the current year, and
  
  

• You spent a total of 183 days during the three-year period calculated as:
  
  

• All the days in the current year
  
  

• One-third of the days in the prior year
  
  

• One-sixth of the days two years before
  
  

Example:
If you spent 120 days in the U.S. each year for the past three years, you meet the SPT and are considered a U.S. person.

3. U.S.-Based Entities

Foreign accounts held by U.S. corporations, partnerships, limited liability companies, trusts, or estates also trigger FBAR reporting. If the entity is organized under U.S. law, it counts as a U.S. person — even if its operations are mostly overseas.

Important Note for Small Business Owners Abroad:
If you own a U.S. LLC that holds foreign financial accounts, even if the accounts are used solely for business, the LLC may have its own FBAR obligation separate from your personal one.

Special Considerations and Gray Areas

Dual Citizens Living Abroad

Let’s say you were born in the U.S. but moved to France as a child and have lived there ever since. You also became a French citizen and never renewed your U.S. passport. Do you still have to file an FBAR?

Yes — if you’ve never renounced your U.S. citizenship. The IRS doesn’t care where you live or what other citizenships you hold. If you are still legally a U.S. citizen, you’re still a U.S. person.

Green Card Holders Who Move Abroad

Some green card holders assume they are off the hook for FBAR once they leave the U.S. But the IRS considers you a U.S. person until you either:

• Voluntarily abandon your green card (Form I-407), or
  
  

• Have it officially revoked
  
  

Simply moving abroad does not cancel your FBAR obligations if your green card is still valid.

Expatriation and Former Citizens

If you’ve renounced your U.S. citizenship, when do your FBAR obligations end?

You are considered a U.S. person until the date your renunciation becomes effective, which is the date you receive your Certificate of Loss of Nationality. You are still on the hook for FBARs for any calendar year in which you were a U.S. person for even one day.

FBAR Threshold: $10,000 Aggregate Value

Remember, the $10,000 threshold is calculated as the combined highest value of all foreign financial accounts at any point during the year — not per account.

So, if you have three foreign accounts with max yearly balances of:

• Account A: $4,000
  
  

• Account B: $3,500
  
  

• Account C: $3,000
  
  

Your total is $10,500 — and you are required to file an FBAR, even if no single account crossed the $10,000 mark.

What Happens If You Don’t File?

FBAR penalties can be steep:

• Non-willful violations can result in fines up to $10,000 per account per year
  
  

• Willful violations can trigger penalties up to the greater of $100,000 or 50% of the account balance per year
  
  

In recent years, the IRS and FinCEN have increased their scrutiny of overseas account reporting. Even accidental non-filers have found themselves facing costly fines — particularly if they ignored their obligations for multiple years.

Summary: Are You a U.S. Person for FBAR?

If you answer yes to any of the following, you likely need to file an FBAR:

• Are you a U.S. citizen (including dual citizens living abroad)?
  
  

• Do you have a green card, regardless of your current location?
  
  

• Have you spent enough time in the U.S. to meet the Substantial Presence Test?
  
  

• Do you own or control a U.S.-based entity with foreign accounts?
  
  

If so, and your foreign accounts total over $10,000 at any point during the year, you are required to file FinCEN Form 114.

Final Thoughts

FBAR rules can be confusing, especially if you live abroad or are a dual national. The IRS’s definition of a U.S. person doesn’t stop at U.S. citizens — it includes green card holders, long-term visitors, and U.S.-based entities too. If you're unsure, it's better to consult a professional or file proactively than risk penalties later.

Stay tuned for more FBAR-related articles in this series, including how to fix missed filings, which accounts must be reported, and how FBAR ties into Form 8938 and FATCA.

M.Daniyal