Certified Fraud Examiner Practice Exam 2025 – All-in-One Guide to Master Your Certification!

The requirement for U.S. citizens to report foreign bank accounts exceeding $10,000 is governed by the Bank Secrecy Act, which mandates the filing of the Foreign Bank and Financial Accounts Report, commonly referred to as FBAR. This form, officially known as FinCEN Form 114, must be submitted to the Financial Crimes Enforcement Network (FinCEN) to ensure the transparency of foreign assets and to help combat money laundering and tax evasion.

The significance of this form lies in its role in disclosing foreign financial accounts held by U.S. citizens. If individuals fail to report these accounts, they could face significant penalties, emphasizing the importance of adherence to this requirement.

In contrast, the Foreign Account Tax Compliance Act relates to the reporting of foreign financial assets and compliance by foreign financial institutions but is not the specific form needed for reporting foreign bank accounts. Form 1065 is used for partnership tax returns, while Form W-2 is related to wage and tax statements for employees. Neither of these forms pertains to the reporting of foreign bank accounts, thus underscoring why the FBAR is the correct choice for this scenario.