FBAR Filing Requirements for a Non-Resident Alien

The Report of Foreign Bank and Financial Accounts (FBAR) is a report filed with the U.S. Department of the Treasury to provide information on foreign financial accounts. For individuals classified as non-resident aliens (NRAs) for U.S. tax purposes, the FBAR filing requirement can be a source of confusion. An NRA is an individual who is not a U.S. citizen and does not meet the specific residency tests defined by the tax code.

The “U.S. Person” Standard for FBAR

The obligation to file an FBAR is determined by classification as a “U.S. person.” The Financial Crimes Enforcement Network (FinCEN), which administers the FBAR, defines a U.S. person to include U.S. citizens, U.S. residents, and various domestic legal entities. For an individual, the determination is whether they are considered a U.S. resident under tests in the Internal Revenue Code.

The FBAR regulations define a resident alien as an individual who satisfies either the “Green Card Test” or the “Substantial Presence Test.” The Green Card Test is met if an individual is a lawful permanent resident of the United States at any time during the calendar year.

The Substantial Presence Test is a mathematical formula based on the number of days an individual is physically present in the United States over a three-year period. To meet this test, one must be present in the U.S. for at least 31 days in the current year and a total of 183 days over the last three years, using a weighted calculation. This calculation counts all days in the current year, one-third of the days in the first preceding year, and one-sixth of the days in the second preceding year.

An individual who fails both tests is a non-resident alien for tax purposes. Consequently, they are not considered a “U.S. person” and do not have an FBAR filing requirement based on their individual status.

Filing Scenarios for Non-Resident Aliens

While a non-resident alien (NRA) may not be a “U.S. person,” certain activities can create an FBAR filing obligation. These scenarios are separate from the residency tests and depend on an NRA’s relationship with U.S. entities.

Signature Authority Over a U.S. Entity’s Account

An FBAR filing requirement can arise if an NRA has signature or other authority over a foreign financial account owned by a U.S. person, which includes U.S. corporations, partnerships, and trusts. If an NRA, as an employee or director, has the power to control the disposition of funds in a foreign account held by a U.S. company, they may have an independent obligation to file an FBAR.

This rule applies even if the U.S. entity itself is also filing an FBAR for the same account, as the individual’s authority creates a separate reporting duty. For example, an NRA who is the chief financial officer of a U.S. corporation with authority to make wire transfers from the company’s foreign bank account would need to file an FBAR.

Financial Interest in a U.S. Entity’s Account

An NRA may also have a “financial interest” in a foreign account held by a U.S. entity, which triggers a filing duty. A financial interest is established through ownership. If an NRA owns, directly or indirectly, more than 50 percent of the voting power or total value of a U.S. corporation’s stock, the NRA is deemed to have a financial interest in that corporation’s foreign accounts.

Similarly, owning more than 50 percent of the profits or capital interest in a U.S. partnership creates a financial interest in that partnership’s foreign accounts for the NRA partner.

Information Needed to Complete the FBAR

If a filing obligation exists, specific information must be gathered to complete the FBAR. The filer must provide their full name, address, and a U.S. taxpayer identification number (TIN), such as a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). If an individual does not have a TIN, a foreign passport number or other government-issued identification can be used.

For each reportable foreign account, the filer must provide detailed information. This includes the formal name of the financial institution, the full address of the branch where the account is maintained, the account number, and the type of account, such as a bank or securities account. The filer must also report the maximum value of the account during the calendar year.

To determine the maximum value, the filer must identify the highest balance the account reached during the year and report it in U.S. dollars. If an account is in a foreign currency, the conversion must be made using the Treasury Department’s Financial Management Service’s official year-end exchange rate.

How to File the FBAR

The FBAR must be filed electronically using the BSA E-Filing System, which is maintained by FinCEN, and is not filed with the Internal Revenue Service (IRS). The form used for this report is FinCEN Report 114, Report of Foreign Bank and Financial Accounts.

The process involves entering the prepared information directly into the online form. After all information has been entered, the filer must certify that the information is true, correct, and complete. Submitting a false report can carry significant penalties. Once certified, the form is submitted electronically, and the filer will receive a confirmation email from FinCEN with a unique BSA Identifier tracking number as proof of submission.

The annual deadline for filing the FBAR is April 15 of the year following the calendar year being reported. However, FinCEN grants an automatic extension to October 15 for all filers, which does not need to be requested.