Who Must File an FBAR? United States Persons and the Two-Part Test

The two-part test

An FBAR obligation arises when both of the following are true for a calendar year. Neither alone is enough.

The two conditions for an FBAR filing obligation
Condition	Test
1. Status	You are a United States person, and you had either a financial interest in or signature authority over at least one financial account located outside the United States.
2. Value	The aggregate maximum value of all such accounts exceeded $10,000 at any time during the calendar year.

Note what is absent from that test. There is no minimum income, no requirement that the account earned anything, no exemption for accounts you did not open yourself, and no exemption because you also disclosed the account somewhere else. The obligation is personal: each U.S. person who meets the test files their own report, subject to the narrow spousal rule described on our signature authority page.

Who counts as a “United States person”

The term is defined by regulation and is broader than “U.S. citizen”. It covers:

U.S. citizens — wherever in the world they live. Citizenship, not residence, is the trigger. A citizen who has lived abroad their whole adult life is still a United States person.
U.S. residents — generally, individuals treated as resident aliens for federal tax purposes. In practice this means lawful permanent residents (green card holders) and those meeting the substantial presence test, together with certain people who elect resident treatment.
Entities created or organised in the United States or under U.S. law — corporations, partnerships and limited liability companies, including single-member LLCs that are disregarded for income tax purposes. Being disregarded for tax does not make an entity disregarded for the FBAR.
Trusts and estates formed under U.S. law.

Dual citizens and accidental Americans

Dual nationality does not reduce the obligation. Someone born in the United States who left as an infant, holds another passport and has never filed a U.S. return remains a U.S. citizen for FBAR purposes until citizenship is formally relinquished. This group — sometimes called “accidental Americans” — frequently discovers the obligation only when a foreign bank asks about U.S. status under FATCA. If that describes you, the late and delinquent filings page is the relevant starting point, and professional advice is genuinely worth the cost.

The year you arrive or leave

Residency starting and ending dates matter, and they are a common source of error. A person who becomes a U.S. resident partway through a year, or who gives up residence during a year, may have a filing obligation for the portion of the year in which they were a U.S. person — and the rules interact with treaty elections and dual-status returns in ways that are genuinely complicated. This is one of the clearest cases for professional advice rather than self-help.

What “financial interest” means

You have a financial interest in a foreign account in either of two situations.

You are the owner of record or holder of legal title

This is the ordinary case — the account is in your name. It applies whether you hold it alone or jointly with someone else, and regardless of whose money is in it. A parent named on a child’s account, or a child named on an elderly parent’s account, is an owner of record.

The owner of record holds it for your benefit

A financial interest is also attributed to you where the owner of record is:

a person acting as your agent, nominee or attorney, or otherwise on your behalf;
a corporation in which you own directly or indirectly more than 50 per cent of the voting power or the total value of the shares;
a partnership in which you own directly or indirectly more than 50 per cent of the interest in profits or capital;
any other entity (other than a trust) in which you own directly or indirectly more than 50 per cent of the voting power, total value of equity, or interest in profits;
a trust of which you are the grantor and which you own for federal tax purposes; or
a trust in which you have a present beneficial interest in more than 50 per cent of the assets, or from which you receive more than 50 per cent of the current income.

The attribution rules mean the account does not have to be in your name at all. If your wholly owned foreign holding company has a bank account abroad, you generally have a financial interest in that account personally — and so does the company, if it is a U.S. entity.

What “signature authority” means

Signature authority is the authority of an individual, alone or together with another, to control the disposition of assets in an account by direct communication — written or otherwise — with the institution that maintains it.

Two features of that definition catch people out. First, it does not require any ownership: an employee who can move an employer’s money has signature authority over an account in which they have no financial interest at all. Second, it does not require that you ever exercise it. The authority is what counts, not its use.

Accounts in this category are reported in Part IV of the form, and there are meaningful exceptions for certain employees and officers. The topic has its own page.

Companies, partnerships and LLCs

A U.S. entity files its own FBAR if it meets the two-part test. Points to watch:

Disregarded entities still file. A single-member LLC that files no separate income tax return is nevertheless a United States person for FBAR purposes and files its own Form 114 if it has qualifying foreign accounts. The member may also have a reportable financial interest in the same accounts.
Consolidated reporting is available. A U.S. entity that owns directly or indirectly more than 50 per cent of another entity may file a consolidated FBAR (Part V) covering the subsidiary’s accounts, rather than having each file separately.
Officers and employees are a separate question. Whether the individuals who can sign on the company’s foreign accounts must also report them personally depends on the signature-authority exceptions.
Foreign entities do not file. An entity organised outside the United States is not a U.S. person, however American its ownership. But its U.S. owners may have an attributed financial interest in its accounts.

Trusts, estates and beneficiaries

A trust or estate formed under United States law is itself a U.S. person and files if the test is met. For beneficiaries, the position is narrower than people expect:

A grantor treated as owning the trust for federal tax purposes has a financial interest in its accounts.
A beneficiary has a financial interest only where they hold a present beneficial interest in more than 50 per cent of the trust assets or receive more than 50 per cent of its current income. A discretionary beneficiary with no such entitlement generally does not.
A beneficiary is relieved from filing where the trust, its U.S. trustee or its U.S. agent files an FBAR reporting the account. This exception applies to the beneficiary only, not to the grantor.
An executor or administrator of an estate may have signature authority over the deceased’s foreign accounts, and a final FBAR may be required for the year of death.

Children and minors

There is no minimum age. A child who is a U.S. person and meets the test must file an FBAR in their own name. If the child cannot file personally, the obligation falls to a parent or guardian, who signs on the child’s behalf. Accounts held for a minor under a custodianship or in a foreign equivalent of a junior savings account are commonly overlooked, particularly where a grandparent abroad opened the account.

Exceptions and relief

Several categories of person or account are relieved from reporting. The main ones:

Accounts jointly held by spouses, where one spouse files a single report covering both — only if strict conditions are met. See the spousal rule.
Certain individuals with signature authority only, including specified officers and employees of banks subject to federal supervision and of certain publicly traded or large U.S. entities, where the employer files the report.
Participants and beneficiaries in tax-qualified retirement plans under sections 401(a), 403(a) or 403(b) of the Internal Revenue Code, in respect of accounts held by or for the plan.
Owners and beneficiaries of an individual retirement arrangement in respect of foreign accounts held by the IRA.
Trust beneficiaries where the trust, its U.S. trustee or its U.S. agent files a report covering the account.
Consolidated filers — a subsidiary whose accounts are reported on the parent’s consolidated FBAR.
Certain government and international financial institution accounts, and accounts at a U.S. military banking facility, which are not treated as foreign accounts at all.

These exceptions are narrower in their statutory wording than the summaries above, and most carry conditions. Read the current Form 114 instructions before relying on one.

Worked examples

The examples below are illustrative only and assume no exception applies.

Example 1 — The green card holder

Priya moved from India to California in 2022 and holds a green card. She keeps a savings account in Mumbai that peaked at the rupee equivalent of $14,000 last year and an old fixed deposit worth about $900. She files. She is a U.S. resident, the combined maximum exceeds $10,000, and both accounts go on the report — not just the larger one.

Example 2 — Six small accounts

Tom, a U.S. citizen in Berlin, has six accounts that each peaked between $1,500 and $2,400, for a combined maximum of about $12,000. No single account came close to $10,000. He files, and lists all six. Aggregation is the whole point of the test.

Example 3 — The office manager

Dana is a U.S. citizen and office manager for a small U.S. company with a €300,000 account in Dublin. She can authorise payments from it but owns none of the business and has no foreign accounts of her own. She reports it in Part IV as signature authority without financial interest, unless one of the employee exceptions applies — which for a small privately held company usually does not. The company files its own FBAR separately.

Example 4 — The account that closed in March

Luis, a U.S. citizen, closed his Mexican brokerage account in March after transferring $60,000 to a U.S. bank. He held no other foreign account. He files for that year and reports the account at its $60,000 maximum. That it was closed nine months before 31 December is irrelevant.

Example 5 — Under the line

Aisha, a U.S. citizen, has one account in Dubai that peaked at $8,700 and no others. She does not file for that year. She should still note the peak figure, because a single transfer next year could put her over the threshold — and she must still answer the foreign-account question on Schedule B accurately.

Where to go next

Which accounts are reportable — the account types that count towards the test.
The $10,000 threshold — aggregation and maximum value in detail.
Signature authority, joint accounts and spouses — the exceptions in this area.
Frequently asked questions — short answers to specific situations.

Reminder. The definitions on this page are summarised and simplified, and the exceptions carry conditions not fully set out here. Residency questions in particular are fact-specific. This is general educational information, not tax or legal advice — check the current Form 114 instructions and consider professional guidance on your own circumstances.