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Is this an FBAR report flaw?

tcolyer

When I prepared my Quicken for Windows FBAR report, I noticed that the report ignores situations where a deposit is made and then the account closed on the same day as occurs in a maturing CD. The report does not reflect that brief moment when the account balance increases by the deposit amount before the account is closed. This flaw makes the report useless for me.

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q_lurker

I've heard of many flaws in that report, some fixed I believe. Yours is the first callout on that consideration.

I suspect that is by design, though, that they were only after end of day balances. Haven't looked at how the IRS request is worded nor would I know the accepted interpretation.

Jim_Harman

I don't see where the IRS defines "Maximum Amount", but I suppose the report only looks at the account's closing balance each day.

Will the report show the information you are looking for if you record the date the interest is paid one day earlier, or the date the money is transferred out one day later?

tcolyer

I appreciate your feedback, Folks. The IRS is chasing money laundering here. My accountant says that since the last interest deposit shows the account's running balance (ledger balance) increasing on the account statement, that higher balance must be reflected on the FBAR even though the account closes later the same day with a zero balance. This is the only flaw I've found in the report but its big because you have to check the report manually before relying on it. If I record the interest a day earlier than it is paid so it predates the day of the account closing, the FBAR shows the highest balance correctly but its date is incorrect by a day.

Jim_Harman

OK, but I don't see where the IRS asks for the date of the maximum balance, just the amount.

Ask your accountant if showing the interest one day earlier or the transfer out one day later would satisfy the requirement.

Do your bank statements show the intraday balances or the maximum balance? If not I don't know how you would get that information.

My statement (for a US account) only shows beginning balance, ending balance, deposits, and withdrawals, not even the daily closing balances. The online list of transactions shows the "Available balance" which lists debits before credits, so the balance shown is always lower than the peak.

[edit] Also - according to this definition,

https://www.investopedia.com/terms/l/ledger-balance.asp

the ledger balance is the balance at the beginning of the day, so if interest is paid and the account closed on the same day, the ledger balance would be the balance before the interest payment.

tcolyer

I appreciate this conversation. To answer your questions: 1. The FBAR does not require that the date of the max balance be given. My accountant has instructed me to identify for the FBAR the highest balance shown on the statement at any time during the tax year and give him the date in case of future audit or other reason to verify. And the Quicken FBAR Report does give dates which need to be accurate. 2. My bank statements for the accounts in question all identify every account transaction posted and give a running balance for the account's total value after each posting just like Quicken does (this is not necessarily "available funds"). 3. I download the account transactions so they post into Quicken with the correct date for each. To go back and manually re-date certain deposits to a day earlier creates dual problems--a lot of work which Quicken is supposed to help me avoid and now an account that may not reconcile. 4. Based on your definition of Ledger Balance, I misused the term. Thanks for your interest.

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