Military Banking Facility Account

An exception to the requirement for FBAR reporting includes accounts at US military banking facilities located in a foreign country. The instructions from the former form TD F 90-22.1 states that even if an account at a US military banking facility is located in a foreign Country, it is not considered an account in a foreign country.

How should question 7a on Part III of Form 1040, Schedule B be answered? The military accounts are located in a foreign country, but the definition from the TD F 90.22.1 does not consider them a foreign account for FBAR reporting.

The instructions for Sch B, line 7a says "check the 'yes" box if you are required to file FinCEN 114." Since the military banking facility account is not considered a foreign account I would check no.

I agree that the second box for question 7a should be checked no that a FinCen Form 114 is not required to be filed. I just wanted to clarify the first part of question 7a which asks whether you have an account located in a foreign country should be yes. Although defined not a foreign account for the FinCen 114, the account is still located in a foreign country.

You appear to have answered your own question.

Unless you have other foreign accounts that need to be reported, you do not have a FBAR reporting requirement. If that is the case, the account located at a US military banking facility does not need to be reported on form FinCEN 114.

https://www.irs.gov/businesses/small-bu ... ounts-fbar

Exceptions to the Reporting Requirement
Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:

Certain foreign financial accounts jointly owned by spouses
United States persons included in a consolidated FBAR
Correspondent/Nostro accounts
Foreign financial accounts owned by a governmental entity
Foreign financial accounts owned by an international financial institution
Owners and beneficiaries of U.S. IRAs
Participants in and beneficiaries of tax-qualified retirement plans
Certain individuals with signature authority over, but no financial interest in, a foreign financial account
Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust)
Foreign financial accounts maintained on a United States military banking facility.
Review the FBAR instructions for more information on the reporting requirement and on the exceptions to the reporting requirement.

OP is asking if the first question in 7a (At any time during 2017 did you have a financial interest in ...) shoukd be answered yes.
He is clear that the second question under 7a should be no and that no FBAR is required.

We disagree

The account is located on a military facility, operated by a U.S. institution designated by the U.S. government to serve U.S. gonvernment institutions abroad is not subject to FBAR reporting. So the first question on 7a is no.