# What is the definition of an "account" when completing the FBAR?



## mchjlh

When we complete the FBAR, we wonder what, exactly, to consider as “an account” when completing the form. 

An accountant did the FBAR for us in 2013. She reported that I (husband) had three separate “accounts” to report on my FBAR, and my wife had three separate “accounts” plus three joint accounts on her FBAR. 

The accountant’s understanding of “an account” was that it was the highest monthly total of all balances in three or four relevant separate accounts at each of three different institutions where we bank. (e.g at “Friendly Credit Union” I have a chequing account, an open savings account, and a term savings account. The accountant considered those three accounts, added together, to be a single account for entry on the FBAR, and she assigned it to my member number at Friendly Credit Union. She did the same for our accounts at Friendly Bank One and Friendly Bank Two.

Her view was that the IRS was not interested in the specifics of each and every separate account, some with only a few hundred dollars or less, at every institution. But, they do want clear statement of all holdings at all institutions. 

We have followed her example every year since, and each year I wonder if we are following an acceptable approach. I have been unable in reading the IRS publications and this forum to find any clarification of how specific to be when reporting accounts on the FBAR. Maybe someone here has further insight or knowledge.


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## KristenJune

Someone with more expertise will come along, but my understanding is that if I have one bank but multiple accounts at the same bank I am required to report each and every account, even if its zero, providing the combined total exceeds the threshold.


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## Moulard

KirstenJune is correct. 

If you exceed the filing threshold you have to report every foreign account in your name, or that you have signatory authority over even if it only has a measly dollar in it - less actually, because the rules require you to round up. If it has a unique account number on a statement, chances are it is reportable in its own right.


From the FBAR Filing Instructions and Definitions...

A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year.

A financial account includes, but is not limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution). A financial account also includes a commodity futures or options account, an insurance policy with a cash value (such as a whole life insurance policy), an annuity policy with a cash value, and shares in a mutual fund or similar pooled fund (i.e., a fund that is available to the general public with a regular net asset value determination and regular redemptions).

Signature authority is the authority of an individual (alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial account by direct communication (whether in writing or otherwise) to the bank or other financial institution that maintains the financial account.


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## Bevdeforges

I'm going to take a slightly different position here. It can depend to quite an extent on how your bank handles/defines an "account" and that varies from one country to the next and from one bank to the next.

I had one bank (in the UK) where I had two accounts. The two accounts were reported separately and on different schedules. One account sent out monthly statements. The other quarterly statements. And, the cut off date for the two statements were different - one was a calendar month statement, the other had a statement date of the 25th of the month. Those, I figure, are obviously 2 separate accounts.

OTOH, another bank I deal with sends out a consolidated statement each month that gives me the balances in all my various "sub-accounts" each month. For that bank, I list only the "main" account and just add up the relevant balances at the high point for each year. If I make an inquiry at the bank, they only need the master account number to pull up all the information on all the related accounts, so I'm certainly not hiding anything from anybody.

The main thing is to fully disclose your foreign accounts to the best of your ability. Frankly, the chances of the IRS following up on how you reported your bank accounts is slim to non-existent unless and until there is something questionable on your tax returns. 
Cheers,
Bev


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## Moulard

A consolidated statement isn't quite the same thing as a single account. But agree that if your sub-accounts are all under the same BSB/Routing/Account number then it is a single account.

In the example above of the Friendly Credit Union (I happen to like credit unions, they are always friendly and because of their size seem to have more flexibility to deal with the oddities that result from living overseas) I would take the view that if each of the savings, checking and term deposit had separate account numbers, they should probably be reported as separate accounts.

But I also agree with you that there is a slim to non-existent chance that anything will become of it either way.


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## iota2014

> The accountant’s understanding of “an account” was that it was the highest monthly total of all balances in three or four relevant separate accounts at each of three different institutions where we bank. (e.g at “Friendly Credit Union” I have a chequing account, an open savings account, and a term savings account. The accountant considered those three accounts, added together, to be a single account for entry on the FBAR, and she assigned it to my member number at Friendly Credit Union. She did the same for our accounts at Friendly Bank One and Friendly Bank Two.
> 
> Her view was that the IRS was not interested in the specifics of each and every separate account, some with only a few hundred dollars or less, at every institution. But, they do want clear statement of all holdings at all institutions.


Call me cynical but my first thought is that you don't have to report as much information if you have more than 25 accounts, and perhaps your accountant doesn't want you to take up that option because she feels safer if you don't?

That option is probably going to be removed anyway once the IRS rule-making machine is functioning again, so even if my guess is correct, you probably might as well keep following your accountant's method.


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