There are exceptions to the reporting requirement. For example, you do not have to report the following assets because they are not considered specified foreign financial assets:
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A financial account maintained by a U.S. payor. A U.S. payor includes a U.S. branch of a foreign financial institution, a foreign branch of a U.S. financial institution, and certain foreign subsidiaries of U.S. corporations. Therefore, financial accounts with such entities do not have to be reported.
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A beneficial interest in a foreign trust or a foreign estate, if you do not know or have reason to know of the interest. If you receive a distribution from a foreign trust or foreign estate, however, you are considered to have knowledge of your interest in the trust or estate.
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An interest in a social security, social insurance, or other similar program of a foreign government.
| ‘Social Security’- type program benefits provided by a foreign government | No | No |
|---|---|---|
Generally, an account at a financial institution located outside the United States is a foreign financial account. Whether the account produced taxable income has no effect on whether the account is a foreign financial account for FBAR purposes.
But, you don’t need to report foreign financial accounts that are:
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Correspondent/Nostro accounts,
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Owned by a governmental entity,
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Owned by an international financial institution,
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Maintained on a U.S. military banking facility,
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Held in an individual retirement account (IRA) of which you’re an owner or beneficiary,
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Held in a retirement plan of which you’re a participant or beneficiary, or
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Part of a trust of which you’re a beneficiary, if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.
Payments or the rights to receive the foreign equivalent of Social Security, social insurance benefits or another similar program of a foreign government are not specified foreign financial assets and are not reportable.