Bank Secrecy Act
Foreign Bank and Financial Accounts Reporting—Overview
Objective. Assess the bank’s compliance with statutory and regulatory requirements for the reporting of foreign bank and financial accounts.
Each person127 (including a bank) subject to U.S. jurisdiction with a financial interest in, or signature or other authority over, a bank, a securities, or any other financial account in a foreign country must file a Report of Foreign Bank and Financial Accounts (FBAR) (TD F 90-22.1) if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.128 As clarified on the revised FBAR form, which was published by the IRS in October 2008 and must be used after December 31, 2008, the term “financial account” generally includes, among other things, accounts in which assets are held in a commingled fund and the account owner holds an equity interest in the fund, (e.g., a mutual fund), as well as debit card and prepaid card accounts.
On August 7, 2009, the IRS issued Notice 2009-62, which indicated that the IRS intended to issue regulations further clarifying the applicability of the FBAR requirements to U.S. persons with only signature authority over (but no financial interest in) a foreign financial account, as well as to U.S. persons with financial interest in or signature authority over foreign commingled funds. Consequently, with respect to these two types of foreign financial accounts, the IRS extended the FBAR filing deadline for U.S. persons for the 2008 and earlier calendar years until June 30, 2010.
A bank must file this form on its own accounts that meet this definition; additionally, the bank may be obligated to file these forms for customer accounts in which the bank has a financial interest or over which it has signature or other authority.
An FBAR must be filed with the Commissioner of the IRS on or before June 30 of each calendar year for foreign financial accounts where the aggregate value exceeded $10,000 at any time during the previous calendar year.