June 30 will be here very soon – making sure your clients are compliant with the requirement to file a Report of Foreign Bank and Financial Accounts by that date is critical as civil penalties for failure to file are huge – they range from $10,000 up to $100,000 or 50% of the total foreign account balance. Criminal penalties include $250,000 or five years of imprisonment or both.
If your client is a U.S. resident and has a total of $10,000 or more in all foreign bank accounts combined or has signature authority over a foreign account, he or she must file FBAR Form TD F 90-22.1 annually. The FBAR is a report and is not to be filed with the income tax return. What makes the FBAR different from many other forms is that it must be received, not postmarked, by June 30 and it is filed with the U.S. Department of Treasury, not the IRS. Also, there are no extensions.