FBAR Safe Deposit Box Reporting | FBAR Tax Lawyer & Attorney

One of the most common questions that US taxpayers have is regarding FBAR Safe Deposit Box reporting requirements. While the general answer is clear, there may be complications in certain cases.

General FBAR Safe Deposit Box Reporting Requirements

In general, a safe deposit box is not considered to be a financial account and, therefore, not reportable on FBAR.

This is a general rule and it is important to understand that it applies only to a safe deposit box – i.e. an individually secured container, usually held within a larger safe or bank vault. It is important to understand that the bank vault itself is NOT a safe deposit box. In fact, if you were to store gold in a bank vault with bank employees able to directly and legally access the contents of your storage, you would create a reportable account.

The most common example of accounts created by storing items in a bank vault are precious metals, particularly gold and silver (but also any other similar accounts, such as rare minerals accounts).

Exception: FBAR Safe Deposit Box Reporting May Arise If Custodial Relationship Is Established With Respect to the Safe Deposit Box

The great majority of cases are easily resolved under the general rule. However, as I hinted at above, an FBAR safe deposit box reporting requirement may arise if the owner of a safe deposit box enters into a custodial relationship with respect to this safe deposit box.

In such situations, a foreign financial institution is usually given direct legal access to the safe deposit box, is responsible for the safety of its contents and may change the contents according to the instructions from the box’s owner. Of course, in such a case, a safe deposit box can hardly be called in such a way and becomes very similar to a regular bank vault account.

This exception is very rare. I have personally encountered such exceptions only in the context of precious metals accounts.

Contact Sherayzen Law Office for Professional Help With Your FBAR Reporting Requirements

If you need professional help with your FBAR filings, or if you have not timely filed your FBARs for past years and need to resolve your past tax noncompliance, please contact Sherayzen Law Office. Our experienced legal team of tax professionals, headed by our international tax attorney Eugene Sherayzen, will thoroughly analyze your case, determine the US tax reporting requirements that may apply to your case, develop your voluntary disclosure plan and implement it.

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FBAR Criminal Penalties


Potentially, a person who willfully fails to file an FBAR or files a false FBAR may be subject to:

  • A prison term of up to 10 years
  • Criminal penalties of up to $500,000
  • or both

When it comes to penalties, FinCEN Form 114 formerly Form TD F 90-22.1, Report on Foreign Bank and Financial Accounts (commonly known as FBAR), is one of the most severe forms ever issued by the U.S. Department of the Treasury.

In addition to a rich arsenal of civil penalties, the FBAR is also armed with criminal penalties that U.S. taxpayers may face in cases of willful non-compliance with the FBAR regulations.  The two most common cases for criminal prosecution are willful failure to file an FBAR and willful filing a false FBAR, especially when combined with potential tax evasion.

The authority for the severe criminal penalties can be found in 31 U.S.C. § 5322.  This means that, potentially, a person who willfully fails to file an FBAR or files a false FBAR may be subject to a prison term of up to 10 years, criminal penalties of up to $500,000 or both potentially, a person who willfully fails to file an FBAR or files a false FBAR may be subject to a prison term of up to 10 years, criminal penalties of up to $500,000 or both

With the mountain of information that the IRS recently accumulated as a result of the 2009 OVDP, 2011 OVDI and, now, 2012 OVDP voluntary disclosure programs, one should expect a dramatic rise in FBAR enforcement. This, of course, means that we are likely to witness the equivalent rise in FBAR audits and criminal prosecutions.

Contact Sherayzen Law Office for FBAR Help

If you have undisclosed foreign accounts and you are subject to the FBAR requirements, contact Sherayzen Law Office immediately.  Our experienced international tax firm will thoroughly review your case, analyze the available options in a responsible and creative way, create a case plan, draft and complete the necessary legal and tax documents and forms, and rigorously represent your case before the IRS.

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