Because the IRS needs to know...
If you (or your business) have a financial interest or hold signature authority over a foreign bank account or financial institution with a combined balance exceeding $10,000 at any point during the year, it is mandatory to report these accounts annually to the Treasury Department by filing the FBAR.
The FBAR form must be submitted by April 15 (or October 15 if extended) each year, and it must be received by the due date, not merely postmarked by the due date, to avoid incurring a $10,000 late filing penalty. This penalty can increase significantly if the failure to file or provide accurate information is deemed willful.
Please note that this reporting requirement exclusively applies to individuals and entities classified as United States persons. United States persons include U.S. citizens, U.S. residents, entities established or organized within the U.S., as well as trusts and estates formed under U.S. laws.