The Report of Foreign Bank accounts, also known as the FBAR was a tool invented by congress in 1970 to make it difficult for criminal masterminds around the world to use the international banking system to facilitate their criminal mastermind plans. And because of that, any US person regardless of age or mental abilities must file an FBAR should their foreign bank accounts exceed $10,000 in the aggregate. Again, believe it or not this requirement extends to someone who is disabled or is a child - even a baby. Read more to find out why
FBAR penalties for minors and other dependents
The FBAR is form every US person is required to file or could face horrific penalties —starting at $10,000 and going up to 50% of account value. The reason why the penalties are so horrific is that the law was designed to dismantle the most violent, thuggish criminal syndicates. Now as as it turns out, FBAR penalties haven’t been assessed so much against terrorists and human and drug traffickers, but rather every day people who didn’t know they had to report a foreign pension on an FBAR form.
What is an United States “person”
The law imposes FBAR requirements against any “United States person” which is defined as United States citizens - including minor children -; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability entities.
Every child is responsible for filing an FBAR
Further the law states a child is responsible for filing his or her own FBAR report. If a child cannot file his or her own FBAR for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign his or her FBAR, a parent or guardian must electronically sign the child's FBAR.
So would the IRS penalize a child for not filing FBAR?
Absolutely.We have seen IRS employees attempt to assess FBAR penalties in woefully inappropriate settings - again and again.
What if you made a mistake with an FBAR
FBAR mistakes are incredibly common. And consider this, we have IRS employees as clients who messed up their FBARs. If you made a mistake there are often cost effective ways to deal with it, but you need to be careful. Trying to figure out this on your own could lead to a really bad result - we’ve seen people make a bigger messes trying to straighten things out on their own or by getting bad advice. Contact us for expert help.