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From my understanding, FBAR is meant to track how much money US citizens hold outside of the US.

Let's say that on June 2020 I had $10,000 (the minimum for FBAR reporting) in my account in the bank of London. Then in July 2020 I moved to Paris and transferred $10,000 to my account in the bank of Paris while closing my account in the bank of London.

I only had a total of $10,000 in my holding at any point in time. However, if I report the max amount of all of my accounts I would report

Bank of London: Account XXX: $10,000
Bank of Paris: Account YYY: $10,000

With an implied total of $20,000. Does that make sense? Could that come back to hurt me if the next year I only report $10,000?

finks
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  • FWIW, the penalty for making an inaccurate FBAR report or failing to file one is draconian. You would be well advised to retain a lawyer to fully review the relevant statute and regulations (which also affords you a "reliance upon counsel" defense in a criminal prosecution or in an afford to impose a civil penalty upon you). It isn't clear why the "implied total" would matter much. The disclosures aren't used for determining tax liability; they're just an early warning system in money laundering investigation and don't have to match year to year since it is legal to spend the money. – ohwilleke Jan 05 '22 at 21:43
  • Oh well, I was worried that the standard "pay your local lawyer" answer would be the one given. The reason that I worry about the "implied total" is because the US wants to know how much money is held abroad. If one year the total of all of the maximum values in all accounts are XXX and the next year they are XXX/2 it may cause the US to wonder where that money went. And when the US wonders, they may audit me, which will be an expensive pain in the a**. – finks Jan 06 '22 at 14:42
  • It is a good question, but the penalty really is serious which is why you shouldn't rely on Law.SE. The maximum civil penalty is "the greater of $100,000 or 50 percent of the aggregate balance in the accounts at the time of the violation. 31 U.S.C. § 5321(a)(5)(C)(i). The usual civil penalty is an amount "not to exceed the greater of the amount (not to exceed $100,000) equal to the balance in the account at the time of the violation, or $25,000.” https://www.jdsupra.com/legalnews/fbar-penalties-another-court-holds-that-3655609/ – ohwilleke Jan 06 '22 at 20:24

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