Filing FinCen Form 114 – Foreign Bank Account Reporting (FBAR)
If you have foreign bank or investment accounts holding more than $10,000 in the aggregate anytime during the year, you are required to file FinCEN Report 114 (Report of Foreign Bank and Financial Accounts) by April 15th of the following year, with an automatic extension to October, 15 granted (Note new due date in 2017). Form 114 must be filed electronically through the Bank Secrecy Act (BSA) e-filing system.
The FBAR filing requirement is not part of filing a tax return. The FBAR Form 114 is filed separately and directly with FinCEN
Filing Form 8938 (Statement of Specified Foreign Financial Assets)
Starting after March 18, 2010 , the IRS has added Form 8938 to the tax return. The form 8938 reporting applies for specified foreign financial assets in which the taxpayer has an interest in taxable years. Filing Form 8938 does not relieve you of the requirement to file FinCEN Form 114
Filing Form 5471
Form 5471 is used by certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations. Form 5471 was created by a law that required domestic corporations to provide their asset and balance sheets on their foreign corporations.
Filing Form 5472
Form 5472 is “Information Return of Foreign-owned US Corporation of Foreign Corporation Engaged in a US Trade or Business”. Foreign-owned domestic companies, including U.S. LLCs, that are disregarded as separate entities for federal tax purposes are subject to a new disclosure obligation. Treasury regulations promulgated back in December 2016 require such entities to file Form 5472 , disclosing certain transactions between the reporting entity and its foreign owner and other affiliates.
Filing Foreign Inheritance Form 3520
Form 3520 is an information return. Even when a foreign inheritance is not taxable, you may need to report it. Generally, U.S. citizens receiving the aggregate amount of $100,000 or more in gifts and/or bequests or a foreign estate must report those amounts on the IRS Form 3520 -Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.
Failure to file can result in serious consequences including numerous severe civil penalties and potential prosecution followed by a term in federal prison.
Taxpayers who did not report foreign income or assets but who can certify that their non-compliance was “non-willful” can participate in the Streamlined Filing Compliance Procedures (“SFCP”) by filing 3 years amended returns and 6 years of FinCEN Report 114. No income tax penalty and a 5% “FBAR-related” penalty are due. Please note that non-filers cannot participate in this program.