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This is a good question, and I did some research on it for you. The answer is that, in order to be compliant with FATCA, FBAR, FinCEN 114, IRS Form 8938, and IRS reporting requirements in general, a taxpayer has to report their foreign financial accounts (presuming they meet the filing threshold requirement), anytime that “the annual aggregate total of foreign accounts meets or exceeds the threshold requirements at any time during the year.” This quote is directly from the US Treasury Department instructions.
Thus, simply closing an overseas account does not eliminate the reporting requirement for it, as long as its value exceed the filing threshold at any time during the year. The following Internal Revenue Service webpage describes the filing requirements for Form 8938 and FinCen Form 114 in some detail, and provides their dollar value reporting (threshold) levels:
https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements
Thank you for asking this important question.
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