Missing FBARs does not automatically mean penalties. If you properly reported all foreign income on your tax returns and your only issue is late FBAR filing, the delinquent FBAR submission procedures may allow you to file delinquent FBARs without penalties.
The IRS created these submission procedures to help taxpayers correct non-willful mistakes involving foreign financial accounts before IRS contacts them.
What Are the Delinquent FBAR Submission Procedures?
The delinquent FBAR submission procedures are official IRS submission procedures that allow taxpayers to file delinquent FBARs without risking any penalties when:
- All foreign income was properly reported on prior tax returns
- No amended tax returns are required
- The taxpayer is not under civil examination or criminal investigation
The FBAR (FinCEN Form 114) is required under the Bank Secrecy Act and applies when foreign financial accounts exceed $10,000 at any point during the year.
FBAR filing is separate from your federal tax return. It is submitted electronically through the BSA E-Filing System managed by the Financial Crimes Enforcement Network.
If you qualify, the delinquent FBAR submission procedures generally eliminate FBAR penalties.
Who Must File an FBAR?
The FBAR filing requirement applies to U.S. citizens, green card holders, and tax residents with foreign financial accounts exceeding $10,000 in aggregate during the year.
This includes:
- Foreign bank accounts
- Brokerage accounts
- Certain mutual funds
- Accounts at any foreign financial institution
- Accounts with signature authority
- Joint accounts and jointly owned accounts
The FBAR is an annual report. It is due April 15 with an automatic extension to October 15.
It is not part of your tax returns and must be filed separately. For a detailed breakdown of FBAR requirements and step-by-step filing instructions, see our guide: FBAR Requirements and How to File
How to File Delinquent FBARs Under the Delinquent FBAR Submission Procedures
To complete a delinquent FBAR submission, you must file delinquent FBARs for the most recent six years through the BSA e filing system.
Steps:
- Gather bank statements for all foreign accounts and financial accounts.
- Prepare FinCEN Form 114 for each year.
- Select a late filing explanation in the e filing system.
- Submit electronically.
- Keep confirmation records for at least five years.
Paper filing is not allowed.
The IRS has a six-year statute of limitations for FBAR violations, which is why six years of delinquent FBARs are required.
If the IRS determines your failure was non-willful and due to reasonable cause, penalties are typically waived under the delinquent FBAR filing procedures.
If you would like structured assistance with the delinquent FBAR submission procedures, our firm handles the preparation, reasonable cause statement, and electronic submission through the BSA e-filing system.
How Much Does It Cost?
We offer a flat fee of $600 to assist with the delinquent FBAR submission.
This fee is the same no matter how many foreign accounts you need to report. Many other firms charge per account, but we believe in transparent, predictable pricing.
What Happens If You Submit an FBAR Late?
Late FBAR filing can result in significant FBAR penalties depending on whether violations are willful or non-willful. Non-willful violations may result in penalties up to $16,536 per report per year (inflation adjusted).
Willful violations may result in penalties of up to $100,000 or 50% of the highest account balance per year. The IRS evaluates intent carefully. Willful violations carry far greater risk, including potential criminal investigation.
Taxpayers who voluntarily correct delinquent FBARs before IRS contacts are far more likely to avoid late filing penalties.
What If You Also Need to Correct Tax Returns or Report Foreign Income?
The delinquent FBAR submission procedures only apply when your tax returns are already correct and all foreign income was properly reported. If you failed to report foreign income, failed to file tax returns, or now need to file amended tax returns, the delinquent FBAR submission procedures are not available.
In those cases, the appropriate solution is the streamlined filing compliance procedures.
The streamlined filing compliance procedures allow taxpayers to correct both:
- Delinquent FBARs
- Prior-year tax returns
Under streamlined filing, you must:
- File three years of amended tax returns
- File six years of delinquent FBARs
- Pay additional tax and interest if owed
- Certify that the violations were non-willful
There are two versions of the streamlined filing compliance procedures:
- Streamlined Foreign Offshore Procedures (for foreign residents)
- Streamlined Domestic Offshore Procedures (for U.S. residents)
If you want a detailed explanation of eligibility, required certifications, and how the process works, read our full guide on streamlined filing compliance procedures.
If you prefer structured handling from start to finish, our firm also manages the entire streamlined compliance package, including amended tax returns, FBAR filing, and non-willfulness certification.
If there is risk of willful violations, significant unreported income, or potential criminal investigation, voluntary disclosure options may apply and offshore tax counsel should be consulted before taking action.
How the IRS Evaluates Reasonable Cause
A reasonable cause statement is required when filing delinquent FBARs under the delinquent FBAR submission procedures.
Your statement should explain:
- Why you were unaware of the FBAR filing requirement
- That all foreign income was properly reported
- That the failure was non-willful
The IRS distinguishes between honest mistakes and intentional avoidance when assessing FBAR violations. Reasonable cause is critical to avoid the maximum penalty.
Important Compliance Rules to Remember
- FBAR reporting is separate from filing tax returns.
- The FBAR filing deadline includes an automatic extension.
- You must report and pay tax on all foreign income.
- The IRS discourages quiet disclosure.
- Filing late without using official submission procedures can trigger civil examination or existing audit selection processes.
- The IRS has six years to assess FBAR penalties.
When Should You Act?
The delinquent FBAR submission procedures are only available if the IRS has not initiated income tax examination, civil examination, or criminal investigation.
Once IRS contacts begin, these amnesty programs are no longer available.
If your tax returns are compliant and your only issue is delinquent FBAR filing, resolving delinquent FBARs through proper submission procedures is typically the safest approach.
