FBAR: What You Need to Know About Foreign Bank Account Reporting

Most people are aware that if you have US income, that you need to report that each year. However, since 2013, the US Department of the Treasury requires all US citizens and residents who hold a foreign bank account to annually report that account and its balance to the US government. Under FinCEN - the Financial Crime Enforcement Network - people with connections to the US are subject to criminal penalties if they wilfully ignore this requirement.

Foreign Banks and their US citizen clients are targets of US Financial Policy

Foreign banks are obligated to report US citizens data to the US, under the CRS -Common Reporting System. Because of many American citizens find it difficult to open bank accounts abroad. Nevertheless, historically many Americans still have foreign bank accounts.

For US citizens who live permamently in Australia - maybe with their Australian spouse - they may be unaware of this requirement. This requirement applies to joint accounts and any associated bank or securities account over which the US citizens has signature authority.

Often if you have been filing your taxes through a US accountant, they will have been completing your FBAR alongside your annual tax filing. However, don't assume. If you wish to renounce your citizenship down the track, you will need to be up to date with several years of FBAR. While many feel that this is an invasion of privacy, the US governments logic is that many Americans are using foreign bank accounts to launder money and avoid tax obligations. So it is the law of the land.