by Mark Jones
In the normal course of ministry, many nonprofit organizations—as well as missionaries and other individuals—maintain foreign bank and financial accounts. If you own or have authority over a foreign account (such as a bank account, brokerage account, mutual fund, or unit trust), read on. You may be required to report the account yearly to the Internal Revenue Service.
Under the Bank Secrecy Act, you must file a Report of Foreign Bank and Financial Accounts (FBAR), if:
- You have a financial interest in, or signature authority (or other authority that is comparable to signature authority) over one or more accounts in a foreign country and
- The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. It is a tool to help the United States government identify people who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad. Any citizen, resident, or domestic corporation of the U.S. must file the FBAR annually with the IRS on or before June 30 of the following year.
It goes without saying (but I’m going to say it anyway) that ECCU strongly encourages our members to comply with these rules. Not reporting foreign accounts to the IRS carries both civil and criminal penalties. Remember, reporting is designed to detect and curtail illegal activity of criminals. Ministries and individuals conducting legitimate ministry and personal activities should not worry about reporting these accounts.
For more specific information on the FBAR, see the IRS website.