The FBAR instructions point to this in determining what currency rate to use: “Convert foreign currency by using the Treasury’s Financial Management Service rate (select Exchange Rates under Reference & Guidance at www.fms.treas.gov) for the last day of the calendar year.” For December 31, 2023, that UK rate is $ .786
Yet on the IRS pages, it says: “The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently.” Below this wording is a chart showing the Yearly Average Exchange Rates for various countries to use. For the UK in 2023 that Yearly Average Exchange Rate is $ .804
Does it matter which rate I use….or should I use one for the FBAR and the other for my tax returns? Can’t the U.S. simply boil this down to ONE rate that we should use?
