Part 1 International Information Reporting question: FBAR filing requirement

Part 1International Information Reporting

Leo, a U.S. citizen, has signature authority over his employer's bank account in London, which holds $500,000, but no financial interest in it. His employer is not a U.S. financial institution or listed exempt entity. Does Leo have an FBAR filing requirement?

A No, only owners of accounts must file
B No, because the money belongs to his employer
C Yes, signature authority is enough
D Yes, but he must also report the account's income as his own

Show the answer and explanation

Answer: C. Yes, signature authority is enough

A U.S. person with a financial interest in or signature or other authority over foreign financial accounts exceeding $10,000 in aggregate must file an FBAR. Signature authority alone is enough, subject to specific exceptions (for example certain officers of publicly traded or regulated U.S. entities). Leo reports the account but not its income, which belongs to the employer. Source: 31 CFR 1010.350(f); Pub. 54 (12-2025), FinCEN Form 114; FBAR instructions. Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Thinking only account owners report foreign accounts.

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Original study material mapped to the public IRS SEE content outlines; not a real exam question.Not affiliated with or endorsed by the IRS or PSI. Verify figures and rules against current guidance before relying on them.