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If you hold cryptocurrency on foreign exchanges, you may have FBAR and FATCA reporting obligations that carry severe penalties for non-compliance. Here is what fbar crypto reporting requirements means for you.
FBAR Requirements
If the aggregate value of your foreign financial accounts - including foreign crypto exchanges - exceeded $10,000 at any point during the year, you must file FinCEN Form 114, commonly known as the FBAR. This is filed separately from your tax return with a deadline of April 15 and an automatic extension to October 15. The penalty for willful failure to file can be the greater of $100,000 or 50% of the account balance per violation.
FATCA Reporting
Form 8938 requires reporting foreign financial assets above certain thresholds. For single filers living in the US, reporting is required if assets exceed $50,000 at year-end or $75,000 at any point during the year. The thresholds are higher for married filing jointly and for US citizens abroad. Crypto held on foreign exchanges is included.
The Binance Problem
Many US taxpayers used Binance.com (the international platform) before it restricted US users. If you had funds on Binance.com, those may have been reportable on FBAR and Form 8938. The IRS has been increasingly focused on this specific scenario.
Streamlined Filing
If you failed to file FBARs and were non-willful in your failure, the IRS Streamlined Filing Compliance Procedures may provide a path to compliance with reduced penalties. This program requires filing delinquent FBARs, amended tax returns, and certifying that your failure was not willful.