Consolidated FBAR Filing: One Report for Parent and Subsidiary Foreign Accounts
A consolidated FBAR allows a US entity with greater than 50% ownership of subsidiaries to file one comprehensive report covering all entities’ foreign accounts, according to FinCEN regulations, potentially saving substantial time and eliminating duplicate reporting for business owners managing multiple international entities.
Here’s immediate relief if you’re running a US business with foreign subsidiaries: you don’t need separate FBAR filings for every entity you control. This consolidated approach can streamline your entire foreign account reporting process while keeping you fully compliant with Treasury Department requirements.
What Is a Consolidated FBAR?
A consolidated FBAR is a single Foreign Bank Account Report that covers multiple related business entities instead of requiring separate filings for each entity. When a US parent company owns more than 50% of subsidiaries that have foreign financial accounts, it can file one comprehensive FinCEN Form 114 that reports all the foreign accounts for the entire corporate group.
This eliminates the need for each subsidiary to file its own separate FBAR, significantly reducing paperwork and compliance costs for businesses with international operations. FinCEN designed the consolidated approach to reduce duplicate reporting while maintaining transparency for the Treasury Department.
How Does Consolidated FBAR Filing Work?
Think of it like filing one comprehensive report instead of multiple separate ones. If your US entity owns more than 50% of another entity that has foreign financial accounts, you can report everything on a single FinCEN Form 114.
Here’s a practical example: Your Delaware corporation owns 75% of a Canadian subsidiary that maintains business accounts with TD Bank and Royal Bank of Canada. Instead of both entities filing separate FBARs, your parent corporation files one consolidated report covering all the foreign accounts.
The ownership threshold is greater than 50%, measured through voting shares, a percentage of profits, capital interest, or a combination. The subsidiary must be the legal owner of foreign financial accounts (not just a pass-through arrangement) and would otherwise need to file its own FBAR.
This could create overlap where accounts appear to be reported twice. Make sure to note this clearly on your form to avoid confusion during any IRS review.
Who Qualifies for Consolidated Filing?
Your business structure qualifies when these requirements are met:
- Ownership Control: Your US entity must own more than 50% of subsidiaries. Exactly 50% doesn’t qualify – you need majority control.
- US Person Status: The filing entity must be a corporation, partnership, LLC, trust, or estate formed under US law.
- Legitimate Accounts: The subsidiary must own foreign financial accounts that would trigger individual FBAR reporting requirements if filed separately.
- $10,000 Threshold: Combined foreign accounts must exceed $10,000 at any time during the calendar year.
Example: Your US LLC owns 60% of a UK limited company with £15,000 at Barclays Bank. Since you have majority ownership and the foreign account exceeds the threshold, you can file consolidated.
What Happens If I Don’t File or File Late?
The penalties can be significant, but don’t panic. As of 2025, FBAR penalties include up to $16,536 per form for non-willful violations and up to $165,353 or 50% of account balances for willful violations.
For business owners with substantial foreign operations, these amounts can be devastating. A willful violation involving a $500,000 business account could result in a $250,000 penalty.
The good news: If you haven’t been contacted by the IRS and you come forward voluntarily, you have options. The Streamlined Filing Compliance Procedures can help you catch up with reduced or eliminated penalties if your failure to file was non-willful.
What Accounts Must I Report?
Whether filing individually or consolidated, you must report all foreign financial accounts meeting the requirements:
- Traditional Business Accounts: Operating accounts, business checking and savings accounts, money market accounts at foreign banks
- Investment Holdings: Foreign brokerage accounts, mutual fund holdings, securities managed by foreign institutions
- Insurance and Benefits: Foreign insurance policies with cash value, foreign annuities, business-related foreign retirement accounts
- Other Financial Instruments: Trust accounts where your business is a beneficiary, specialized foreign investment accounts
It’s not just traditional bank accounts. Any foreign financial account where your entity has financial interest or signature authority counts toward the $10,000 threshold.
When and Where Do I File?
The consolidated FBAR follows standard FBAR deadlines:
- Primary Deadline: April 15, 2025
- Automatic Extension: October 15, 2025 (no request needed)
- Filing Method: Electronic submission through FinCEN’s BSA E-Filing System
While US expats get an automatic two-month extension for tax returns, FBAR deadlines remain April 15 for all filers. However, everyone gets an automatic extension to October 15.
For business entities, you must register for a BSA E-Filing account rather than using the individual no-registration option. This requires obtaining a User ID and password from FinCEN.
How Do I Complete Part V for Consolidated Reporting?
Part V of FinCEN Form 114 handles consolidated reporting. Here’s what you’ll need:
- Entity Information: Complete details for each subsidiary included in the consolidated report
- Account Details: For each foreign account, provide financial institution name and address, account number and type, maximum account value during the year (in US dollars)
- Ownership Documentation: Clear indication of ownership percentages and control relationships
- Currency Conversion: Convert all foreign amounts using Treasury Department exchange rates
If your consolidated group has 25 or more foreign accounts, modified reporting procedures apply – you’ll complete Part V but maintain detailed records instead of listing every account.
Common Mistakes That Cost Business Owners
Based on our experience with over 71,000 filed returns:
- Misunderstanding the 50% Rule: Remember, you need greater than 50% ownership, not exactly 50%
- Including Wrong Accounts: Only include accounts owned by subsidiaries, not pass-through arrangements or accounts where subsidiaries merely have reporting obligations
- Currency Errors: Always convert foreign amounts to US dollars using proper Treasury Department exchange rates
- Incomplete Documentation: Failing to maintain supporting records for the consolidated filing eligibility
- Missing Deadlines: Assuming business FBAR deadlines are the same as corporate tax deadlines
What If I Need to Catch Up on Past Filings?
If you’ve missed previous consolidated FBAR deadlines, you have options. The IRS offers programs specifically for business owners who need to get current:
- Delinquent FBAR Submission Procedures: File missing FBARs with a reasonable cause statement if you haven’t been contacted by the IRS
- Streamlined Compliance: For non-willful violations, allowing you to catch up with reduced penalties
- Voluntary Disclosure: For more serious situations where willful violations might be involved
The key is being proactive. Once the IRS contacts you first, your options become more limited and expensive.
Is This Different from Form 8938?
Yes. While both report foreign assets, FBAR vs Form 8938 have different requirements:
- FBAR: Reports foreign financial accounts over $10,000 aggregate, filed with FinCEN
- Form 8938: Reports broader foreign assets with higher thresholds, filed with your tax return
You might need to file both forms depending on your business’s foreign assets and account values.
Your Next Steps
Here’s exactly what you need to do:
- Determine Eligibility: Confirm you own more than 50% of subsidiaries with foreign accounts
- Gather Information: Collect account details, ownership documentation, and maximum balances
- Register for Filing: Set up your BSA E-Filing account with FinCEN
- Prepare Your Filing: Complete Part V carefully, noting any potential account overlaps
- File by Deadline: Submit by April 15, 2025, or take the automatic extension to October 15
If you’re behind on filings, contact a professional immediately to explore your options before the IRS contacts you.
Get Professional Help
The consolidated FBAR can simplify your reporting, but getting it wrong carries serious consequences. At Greenback, we specialize in international tax compliance for business owners abroad.
Whether you’re just discovering your consolidated FBAR obligations or need help catching up on years of unfiled reports, our team can guide you through the process. We have CPAs and Enrolled Agents who specialize in international business reporting and know precisely how to handle complex multi-entity structures.
No matter how complex your business structure may be, you’ll have peace of mind, knowing that your FBARs were done right.
Ready to get your consolidated FBAR handled correctly? If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.
Whether you’re years behind or just unsure about the thresholds, our team is ready to help.
Disclaimer: This article provides general information about consolidated FBAR requirements and should not be construed as personalized tax advice. Tax laws are complex and change frequently. Always consult with a qualified professional regarding your specific circumstances.
