Looking For Mr. FBAR - A New Sighting - ”exercised control over and had access to the account”

May 22, 2022 - Participants include:

Virginia La Torre Jeker - @VLJeker

John Richardson - @ExpatriationLaw

 

On May 19, 2022 Virginia La Torre Jeker published a post about Paul Manafort and his adventures with Mr. FBAR.  Mr. Manafort was on the receiving end of three million in FBAR penalties. Because he had not paid, the US government began a  lawsuit to convert the FBAR penalty to a legally enforceable judgment. To understand the complete context of Mr. Manafort's meeting with Mr. FBAR, I refer you to Virginia's post. 

 

In relevant part her post included:

"Regardless, of the fact that others technically owned and operated some of the accounts, Manafort still exercised control over, and had access to, each of the accounts.  This means he had a “financial interest” in the accounts for purposes of the Bank Secrecy Act, and relevant regulations which includes in the definition of “financial interest” the case when “[t]he owner of record or holder of legal title is a person acting as an agent, nominee, attorney, or a person acting on behalf of the United States person with respect to the account.”

Interestingly paragraph 17 of the government's compliant included:

"17. Regardless, Manafort still exercised control over, and had access to, each of the accounts."

In this podcast we go back to the basics and discuss who exactly is required to file an FBAR and why. Our discussion analyzes the FinCEN FBAR instructions.

 

It all starts here. The instructions state that:

 

"Who Must File an FBAR. 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. See General Definitions, to determine who is a United States person."

Our concern - starting at the 32 minute mark of the discussion - is with "FBAR application creep". How long will it take before the test of "exercised control over" and/or "had access to" will be applied to the most pedestrian of situations?

In other words: First, Mr. Manafort. Now, the average person living abroad!