Cardinal Point Wealth Management, a leading Cross-Border Financial Advisor and Canada-U.S. Financial Planning firm, is raising expatriates’ awareness about the severe penalties that could arise from failing to comply with the Foreign Bank Account Report (FBAR) filing requirements in 2025. With increased scrutiny from the IRS and stricter enforcement of Cross-Border Tax Planning, Cardinal Point aims to help Americans living abroad understand the importance of adhering to these regulations.
FBAR Filing: The Basics
The Foreign Bank Account Report (FBAR), officially known as FinCEN Form 114, is a critical requirement for U.S. citizens, Green Card holders, and other U.S. persons with financial interests in foreign accounts. As per the Bank Secrecy Act, any U.S. person who has an aggregate foreign account value exceeding $10,000 at any point during the calendar year must file an FBAR annually with the U.S. Treasury Department.
“Many American expatriates are unaware of their FBAR obligations,” explains Kris Rossignoli, Cross-Border Tax and Financial Planner at Cardinal Point Wealth Management. “Even though the FBAR is strictly an informational form, failure to file it can lead to substantial financial penalties and, in some cases, even criminal prosecution. We’re urging expats to pay attention to this requirement before it’s too late.”
Who Needs to File?
Americans residing abroad often fall into unintentional non-compliance simply because they are unaware of their FBAR filing responsibilities. According to Cardinal Point Wealth Management, the key groups who need to be aware of these rules include:
– U.S. citizens living abroad- Green Card holders- Dual citizens- Individuals with signature authority over foreign accounts
Whether the foreign accounts are held in Canada, Europe, or any other country, the U.S. government requires full transparency. The FBAR filing deadline for 2025 is April 15, with an automatic extension available until October 15.
What Expats Risk by Failing to File FBAR
One of the most pressing concerns for expatriates is the potential for penalties if they fail to file their FBAR. Non-compliance can lead to substantial fines, particularly for those who willfully neglect this obligation. Cardinal Point Wealth Management is warning that the IRS has increased its vigilance, aided by the Foreign Account Tax Compliance Act (FATCA), which mandates foreign banks to report account balances of U.S. citizens to the IRS.
If the failure to file is considered “willful,” meaning the individual knew about the obligation and chose to ignore it, the penalties are severe. Fines for willful violations can reach $100,000 or 50% of the account’s maximum value, whichever is higher, per year of non-compliance. Even if the failure is considered “non-willful,” individuals can still face fines of up to $14,000 annually, which increases with inflation.
“Understanding the consequences of failing to file an FBAR is essential,” adds Rossignoli. “The IRS has a long reach, and with international financial reporting laws becoming more stringent, there’s little room for error.”
Important Deadlines for FBAR Filings
Expats are urged to mark their calendars for the key FBAR filing deadlines:
– April 15, 2025: FBAR filing due date- October 15, 2025: Automatic extension deadline for those who miss the April deadline
Cardinal Point emphasizes that even though the FBAR is a non-tax form, the penalties for failing to file can be financially devastating. Moreover, the filing process is relatively straightforward, and expats lose nothing by complying with the law.
About Cardinal Point Wealth Management
Cardinal Point Wealth Management is a trusted leader in Cross-Border Financial Planning and Canada U.S. Financial Planning. With offices in both Canada and the United States, the firm offers customized financial and tax planning services for individuals and families living across borders. Whether navigating the intricacies of U.S. tax laws, managing cross-border wealth, or ensuring compliance with FBAR requirements, Cardinal Point’s team of seasoned Cross-Border Financial Advisors are equipped to provide the guidance and solutions needed for financial success.
Disclaimer: This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
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