Is filing FBARs bad for you?

[zeeshanap6]

I had no clue I had to file FBARs until this year. I filed one this year. From what I could tell it's pretty straight forward if your foreign banks didn't have more than 100k at any point. However while I was doing my research on this, I came across a number of discussions where people where debating whether or not they should file FBAR. I even found instances where people were trying to avoid having to file FBAR by only maintaining a max of 9k for example at any given time. I usually send money to my NRE account for family support and sometimes for investments into real estate. Should I also be doing the same thing? Send less than 10k and empty out the foreign bank as soon as you get close to that number?

Does filling FBAR every year have any implications in the long term? 

On the flip side I also saw some posts where people suggest filing the FBAR even if the combined balance was less 10k. 

So it's really confusing. Any help in understanding the matter is much appreciated. Thank you! 

[fanfare]

THe IRS is cracking down on people who should file FBAR but don't.

Penalties can be severe.

[Vanessa A · Accepted solution]

No, filing a FBAR is not bad for you.  It does not trigger an audit or other negative consequences or any affect on your return.  It is simply an informational return that was put in place to help combat tax evasion.

  It is actually a good idea to file and to file on time to avoid penalties.  Since you said you have not filed in the past, if you were required to file, then you should file any delinquent FBAR's as soon as possible.  Failure to file is generally worse than filing late. 

Delinquent FBAR

[zeeshanap6]

Thank you for your response. 

Yes. Out of the last 5 years that I have been in the US, this is the first time I filed and prior to 2021 I was a non resident alien. As far as I read, you are not required to file if you are a non-resident alien. I'll go ahead and file one for the last two years now. But I genuinely didn't know I had to file. It was only this year I got to know about the FBAR when I saw a prompt about this on turbo tax.

I'm sure others here have been in my situation too. Are there any penalties for filing this late?

I don't do a lot of international transactions but if I'm sending family support, I do it in bulk. So there's a chance that I had more than 10k in my account in previous years even if it was for just a day.

I'm pretty nervous now to file, because of the same reason you mentioned. I'm worried that I might be inviting an audit by doing that. 

[ThomasM125]

For late filing of the FBAR you can face penalties of $10,000 or more if there was not a willful intent not to file and more than $100,000 or 50% of your account values, for willfully not filing on time. You can also face criminal charges for willfully not filing your FBAR. When you file your return late you will have an opportunity to explain why it was filed late and if you had a reasonable excuse the IRS may wave the penalty. Delinquent FBAR submission