If you have a financial interest in or signature authority over a foreign financial account — including a bank account, brokerage account, mutual fund, trust or other type of foreign financial account — you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR). The FBAR is an annual report that must be filed on or before June 30 of the year immediately following the calendar year being reported. Effective July 1, 2013, electronic filing of FBARs will be mandatory through the Financial Crimes Enforcement Network's (FinCEN's) BSA E-Filing System. The new FinCEN Report 114 replaces the old Form TD F 90-22.1, which will no longer be accepted.

How to Enroll

How you interact with the BSA E-Filing System will depend on whether you are filing an individual FBAR or filing on behalf of another individual or institution. Institutional filers must first enroll in the BSA E-Filing System and obtain a user ID and password. Individual filers do not have to go through the steps to register. After enrolling in the system, institutional filers, using their registered user ID and password, must then log into the BSA E-Filing website to file the FBAR. If you are filing an individual FBAR — that is, you personally own the account that requires the filing of an FBAR — you simply need to go to the BSA E-Filing System website, download and complete the FinCEN Report 114, then choose "Submit FBAR" to upload and complete the process.

What's New?

The new reporting requirements cover those who are required to file a 2013 FBAR by June 30, 2014, for foreign financial accounts held in 2013. The electronic filing also applies to those filing late FBARs for 2012 and those filing amendments to previously filed FBARs. If the report is being filed late (i.e., filed after June 30 of the year following the reporting year), filers must indicate the reason on the FinCEN Report 114. If one of the provided selections does not explain the reason, the filer must select "other" and provide a written explanation in the text box provided. Filers must also disclose whether they have signature authority over but no financial interest in 25 or more financial accounts, and they will be given an opportunity to check a box indicating whether the maximum account value is unknown.

An FBAR may now be completed by a third party on behalf of the person who has the obligation to file an FBAR. Those using a third party preparer should complete and maintain a record of FinCEN Form 114a, FinCEN BSA E-Filing Signature Authorization Record, to authorize the third party filing. Filers should not file or send the completed Form 114a to FinCEN. Instead, Form 114a must simply be retained by the filer or owner and made available to FinCEN or the IRS on request.

What It Means

Filing an FBAR will now require individual FBAR filers and those with supervisory roles to submit FBARs online. Paper FBARs (the earlier Form TD F 90-22.1) will not be accepted. Individuals, attorneys, CPAs or other enrolled agents with documented authority should be ready to file 2013 FBARs using this new system.

Don't Forget About Form 8938

Notwithstanding your filing obligations with respect to an FBAR, don't forget to check whether you have a filing obligation with respect to Form 8938 (Statement of Specified Foreign Financial Assets).  This is an independent tax filing obligation from the FBAR regime, and unlike the FBAR, it is actually filed with your income tax return.