Inspiring Women Winter 2017

((IRS + FATCA) x FBAR) = Acronym Anxiety
Homework, soccer practice, guitar lessons, doctors’ appointments, dentist
appointments – moms have a lot to stay on top of. Oh, and don’t forget to
add your kid’s FBAR to the list. I know, it’s a pain, and I’m sorry – please don’t
kill the messenger.
A recent inquiry from a mom, whose minor US citizen child was being kicked
out of his foreign bank for not being able to prove his FBAR compliance,
made me realize that many moms don’t know that their US citizen children,
even if underage, might need to file an FBAR.
As I’m sure most of you know, US persons – citizens, green-card holders, and residents – are
required to file a Report of Foreign Bank and Financial Accounts (FBAR) if the aggregate value of
the foreign accounts they sign on or have a financial interest in is USD $10,000 or more.
Before we dive in, here’s a brief FBAR refresher. (1) You must report foreign bank and “financial
accounts” (e.g. brokerage, escrow, pension, and life insurance accounts) if their aggregate
value is $10,000 or more; (2) the $10,000 filing threshold is not per account, it’s all accounts
added together; (3) if you sign on an account, include it, even if it’s someone else’s account;
and (4) if the account contains your money – like an escrow account – include it.
Most people with an FBAR filing requirement diligently file it every year because they know if they
don’t, the penalties can be harsh. The problem is, parents often don’t realize that the FBAR is an
equal opportunity nuisance – minors are not exempted from having to file it.
Assume that you opened a savings account for your 2-year-old, who is a US citizen, and the
balance of the account is over $10,000. Guess what? Your child needs to file an FBAR. And, as
your child’s legal guardian, it’s your responsibility to file it on their behalf. Additionally, if you are a
signer on the account, which you likely would be in the case of a 2-year old, you need to include
the account on your FBAR as well.
It has been a pleasure writing for all of you this year, and I look forward to continuing to do so
next year. If there is a topic you would like for a future article, please feel free to email me at
info@esquiregroup.com.
Jimmy Sexton, LL.M., is an expert in the field of international taxation, with an
emphasis on expat issues. He has presented to American expats at groups that
include American women’s clubs throughout Europe and is a sought-after expert
for several news organizations, including CNN and the Washington Post. He is the
President of Esquire Group, an international tax preparation firm and Premier
Sponsor of Inspiring Women Magazine.