What if I Didn’t File an FBAR?

FBAR Filing Violations Can Expose US Taxpayers to Civil or Criminal Penalties

US taxpayers whose foreign financial accounts exceed the Bank Secrecy Act’s reporting threshold must file a Report of Foreign Bank and Financial Accounts (FBAR) with the Financial Crimes Enforcement Network (FinCEN). For those who are behind on their FBAR filings, coming into compliance voluntarily is essential for avoiding unnecessary penalties.

If you own or have a financial interest in an offshore bank account (or multiple offshore bank accounts), you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) with the Financial Crimes Enforcement Network (FinCEN). US taxpayers are required to file an FBAR for offshore bank accounts that have a value of $10,000 or more—or, in the case of multiple offshore bank accounts, an aggregate value in excess of $10,000.

Taxpayers who have signature authority over offshore bank accounts may be required to file an FBAR as well. This requirement applies annually, with the FBAR form due on April 15 (though all taxpayers receive an automatic extension of six months).

Penalties for Failure to File an FBAR

The FBAR filing requirement exists under the Bank Secrecy Act (BSA). Under the BSA, taxpayers who fail to timely file a foreign bank account report through FinCEN’s BSA e-filing system can face either civil penalties or criminal prosecution depending on the circumstances involved. The risks associated with failing to timely file an FBAR depend on whether the failure was non-willful or willful:

• Non–Willful Violations – Non-willful violations carry civil monetary penalties (CMP) that are adjusted annually for inflation. The CMP for non-willful FBAR violations is $16,536 as of 2026.

• Willful Violations – Willful violations carry a CMP of $165,353 (as of 2026) or 50% of the taxpayer’s aggregate offshore account balance, whichever is greater. Criminal penalties may also apply.

In criminal cases, willful penalties can include additional fines and federal prison time. To avoid significant penalties, taxpayers must timely file their FBARs on an annual basis; and, when they fall behind on their FBAR filing obligations, they must come into compliance as quickly as possible.

Delinquent FBAR Submission Procedures

Taxpayers who fail to timely file an FBAR to disclose their foreign accounts incur penalties immediately. While honest mistakes should not expose taxpayers to criminal prosecution, they can still lead to significant financial liability.

To minimize their liability, taxpayers who are behind on their FBAR filings should promptly take steps to come into compliance. In this scenario, there are two primary options available:

1. IRS Streamlined Filing Compliance Procedures

The IRS’s Streamlined Filing Compliance Procedures are available to taxpayers who are filing late due to inadvertent oversights. If you missed filing a foreign financial accounts report because you are unaware of your filing obligations, submitting a streamlined filing could be your best option for coming into compliance.

There are different procedures for disclosing unreported accounts for taxpayers living in the US and taxpayers living abroad. It is critical to follow the correct set of procedures—as failing to do so can result in your filing being rejected by the Treasury Department. While a qualified tax professional may be able to help you file the necessary forms, we strongly recommend consulting with an experienced international tax lawyer at our firm before filing to ensure that this is a prudent approach under the circumstances at hand.

2. IRS Criminal Investigation (IRS CI) Voluntary Disclosure Practice

In cases involving willful failure to report accounts on an FBAR, coming into compliance generally involves submitting a voluntary disclosure to IRS Criminal Investigation (IRS CI). IRS CI investigates tax evasion cases, and submitting a voluntary disclosure does not guarantee immunity from prosecution, so experienced legal representation is essential.

While submitting a voluntary disclosure generally will not eliminate penalties entirely, it can substantially mitigate the risks involved with FBAR noncompliance. By disclosing bank accounts, brokerage accounts, and mutual funds held at a foreign financial institution through the voluntary disclosure process, eligible taxpayers can substantially mitigate both their tax liability and their liability for interest and penalties.

Defending Against Criminal Charges for FBAR Noncompliance

Similar to failing to report taxable income (including foreign income) on federal tax returns, failing to report foreign accounts on an FBAR can lead to criminal charges for tax evasion under federal law. If it is too late to submit a streamlined filing or voluntary disclosure, you will need to be prepared to defend against these charges by all means available.

In addition to helping taxpayers come into compliance, we also defend taxpayers in FBAR investigations and criminal enforcement proceedings when necessary. In these cases, our services include:

• Helping targeted taxpayers make informed and strategic decisions about disclosing unreported income, unreported foreign bank accounts, and other criminal enforcement risks;
• Communicating directly with IRS CI Special Agents and US Department of Justice (DOJ) prosecutors on behalf of our clients;
• Providing reasonable cause explanations, challenging the government’s evidence that our clients made false statements or otherwise acted willfully, and taking other steps to protect our clients from harsh penalties;
• Fighting to prevent scrutiny of our clients’ filing histories for any calendar years that are no longer eligible for review; and,
• Relying on our experience to protect our clients against the maximum penalty being applied, and fighting to protect our clients from facing any penalties if possible.

Along with facing criminal penalties under the BSA and the Internal Revenue Code (IRC), taxpayers accused of willfully failing to file an FBAR can potentially face other criminal penalties as well. As a result, when facing an FBAR-related investigation, a comprehensive defense strategy is essential. With our lawyers’ experience in these cases, we are able to build and execute defense strategies focused on protecting our clients against all possible charges by all means available.

FAQs: What to Know if You Failed to File a Report of Foreign Bank and Financial Accounts (FBAR)

Facing FBAR Penalties? Contact Oberheiden PC to Discuss Your Options in Confidence

If you are facing penalties related to a delinquent FBAR (or multiple delinquent FBARs), we encourage you to contact us promptly for more information. Call 888-680-1745 or contact us online to arrange a free and confidential consultation at Oberheiden PC.

Related pages:

• What if I Didn’t File IRS Form 8938?
• IRS Cryptocurrency Investigation Lawyer
• FBAR and FATCA Compliance for Offshore Accounts