If you are required to file an FBAR and fail to do so, you may face significant civil and criminal penalties. Violations of FBAR regulations can result in fines and/or imprisonment for up to five years. The penalty amounts are adjusted annually for inflation by the U.S. government.
The IRS will not penalize those who report a foreign financial account on a late-filed FBAR, provided they have reasonable cause for the late filing.
Those required to file an FBAR must maintain records of their accounts for typically five years from the FBAR deadline. Please make sure to keep a record of the following data:
- Name on each account,
- Account number or other designation,
- Name and address of the foreign bank or other person who keeps the account,
- Type of account,
- The Highest value of each account during the reporting period.
- They should also keep copies of filed FBARs.
Note: Employees who submit an FBAR to report signature authority over their employer’s foreign financial accounts are not required to maintain records on their employer’s accounts.
Find more about FBAR here: FBAR: Requirements, Deadlines, and How to File