Do I report accounts I have signature authority over?

Yes, you must report foreign financial accounts over which you have signature authority on your FBAR, even if you do not own the account or have any financial interest in it. Signature authority means you have the ability to control the disposition of assets in the account by direct communication with the financial institution.

Common situations where signature authority applies include: corporate officers or employees who can sign on a company's foreign bank account, individuals who manage foreign accounts for elderly parents or family members, nonprofit officers with authority over the organization's foreign accounts, and attorneys or agents who can transact on behalf of clients.

When reporting accounts based on signature authority alone (not financial interest), you indicate on the FBAR that you have signature authority and provide the name and address of the account owner. The full value of the account must be reported, and it counts toward your $10,000 aggregate threshold.

There are limited exceptions to the signature authority reporting requirement. You may be exempt if the account belongs to a bank, securities dealer, or other financial institution that is already supervised by a federal regulatory agency and the account is maintained in the normal course of business. Employees of certain entities (banks, registered securities dealers, and listed US companies) may also be exempt for accounts owned by their employer, provided the employee has no personal financial interest in the accounts.

If you are unsure whether you have signature authority over a foreign account, consider whether you could walk into the foreign bank and withdraw funds or authorize a transfer. If yes, you likely have signature authority. Even if you have never exercised this authority, the mere existence of the right triggers the reporting requirement.

At Zenith Financial, we help you identify all accounts that require FBAR reporting, including those you might not have considered, such as accounts with signature authority through business or fiduciary roles.