If you had a financial interest in (or authority over) any foreign financial accounts or holdings whose combined total value exceeded $10,000 at any time during the tax year, you are required to file Form TD F 90-22.1: Report of Foreign Bank and Financial Accounts (FBAR) with the Department of Treasury. The form must be received by the IRS by June 30th of the following year.
Form TD F 90-22.1 is filed separately from your tax return and is mailed to the Department of Treasury – not the IRS. This form cannot be e-filed; TurboTax will provide complete mailing instructions once you complete the form.
Penalties for Not Filing
The Treasury Department may impose very stiff penalties for failing to file TD F 90-22.1.
“Civil and criminal penalties, including in certain circumstances a fine of not more than $500,000 and imprisonment of not more than five years, are provided for failure to file a report, supply information, and for filing a false or fraudulent report.” (From the Privacy Act Notice on Form 90-22.1)
According to tax attorney Howard Rosen, the following penalties can be assessed:
- Failure to File Penalty – up to $250,000 and/or up to 5 years in prison for any person “willfully violating” the requirements to file. (31 CFR 5322a penalty)
- Fraud Penalty – up to $500,000 and/or up to 10 years in prison for any person “willfully violating” the requirements to file “as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period.” (31 CFR 5322b penalty)
- False Information Penalty – fine or up to 5 years in prison for any person providing false, misleading, fictitious, or fraudulent statements on TD F 90-22.1; or up to 8 years in prison if the false information involves domestic or foreign terrorism. (18 CFR 1001 penalty)