The U.S citizens, non-residents and residents who have a financial interest on any financial account in a foreign country needs to make a different legal filing if the total value of all these accounts surpass $10,000 at anytime during the calendar year.

1. Stay Away from the Penalties of Foreign Bank Account Tax
The U.S citizens, non-residents and residents who have a financial interest on any financial account in a
foreign country needs to make a different legal filing if the total value of all these accounts surpass
$10,000 at anytime during the calendar year.
Foreign Bank Account Tax Penalties
There are mainly two kinds of penalties for foreign bank account tax non-compliance, i.e. willful and
non-willful. It must be noted that the penalties are evaluated according to an individual’s account.
Simultaneously, the penalties are evaluated for every year where there is a violation. For instance, if an
individual has 5 accounts that have not been reported over 5 years, there could be as many as 25
penalties. A very common mistaken belief is that in case an account is under $10,000, the no filing is
needed and this might not be necessarily is the case. In addition to that, the filings are needed even if
the foreign accounts do not generate any income. Furthermore, it should also be noted that are no
separate rules for the minors as they also need to file the FBAR’s.
While the penalties can be high, there has been a wide range of overseas voluntary disclosure programs
provided by the IRS that can reduce or minimize the penalties that are noted above. Whilst the FBAR
reporting guidelines are present since 1970’s, an important revision to the form and related penalties
for the non-compliance have gathered the attention for many taxpayers and practioners over the past
few years. This is an outcome of the IRS determining that there is non-compliance and hence it has
been indicated that the IRS will be making the penalties considerably rigid in case of non-filing.
Categories in FBAR Reporting
The list given below specifies the kinds of financial accounts to be reported on the Foreign Bank Account
Report, in case qualified:

Bank accounts (checking and savings)

2. 
Investment accounts

Mutual funds

Retirement and pension accounts

Securities and other brokerage accounts

Debit card and prepaid credit card accounts

Life insurance and annuities having cash value
However, it should also be noted that the taxpayers need to file the TD F 90-22.1 to report about the
foreign bank accounts that he/she holds at present, even if the deadline of June 30th is missed. The IRS
has formulated some harsh penalties otherwise. In order to stay away from these penalties it is essential
to seek guidance and help from the tax planning agencies in United State and to conduct the process of
FBAR reporting seamlessly.