Updated April 2025
Delinquent Submissions, Streamlined Procedures, and Voluntary Disclosures
Not filing an FBAR can lead to significant penalties and possible criminal charges. Still, if you’re proactive, you may be able to use the delinquent filing procedures to catch up on your filing requirements and avoid excessive penalties.
Keep reading for an overview, or contact us at Wiggam Law to get help now.
Key takeaways for taxpayers with unfiled FBARs
- Penalties- As of 2025, $16,536 for non-willful or $165,353 for willful failure to file. Assessed per unfiled report.
- Delinquent submissions – For taxpayers who didn’t file an FBAR but who reported all income related to the foreign accounts.
- Streamlined domestic procedures – For taxpayers living in the United States who filed a return but didn’t report the income from their foreign accounts and didn’t file an FBAR.
- Streamlined foreign procedures – For taxpayers living out of the United States who didn’t report the income from their foreign accounts (whether they filed a return or not) and didn’t file an FBAR.
- Voluntary Disclosure – For taxpayers who willfully (purposefully) failed to file an FBAR.
Who Should File an FBAR?
If the total of the person’s foreign accounts that they own, have a financial interest in or have signature authority over ever meets or exceeds $10,000 during the tax year, they must file an FBAR for that year. The FBAR is due on April 15 each year for the previous year, but if you miss that deadline, it is automatically extended to October 15.
To get more info, check our page on FBAR reporting requirements. Note that this is not the only form for people with foreign assets – depending on the situation, you may also need to file Form 8938. You should consult with an experienced international tax attorney if you are interested in foreign assets or accounts to ensure you are properly reporting them.
Consequences of Delinquent FBAR Submissions
As of January 2025, the penalty for non-willful failure to file an FBAR is $16,536. The penalty for willful FBAR violations is the greater of $165,353 or 50% of the account balance at the time of the violation.
Read more about the penalties for willful vs. non-willful violations.
How to Catch Up on Late FBAR Filings
There are several options available to U.S. persons with foreign accounts over $10,000 but have not filed FBARs.
- Streamlined foreign offshore procedures – For taxpayers living outside the country who did not report income or pay tax related to foreign accounts.
- Streamlined domestic offshore procedures – For taxpayers living in the United States who did not report income or pay tax related to foreign accounts.
- Delinquent FBAR submission procedures – For taxpayers who didn’t file an FBAR but did not have income from their foreign accounts or already reported the income related to the foreign accounts.
- Criminal Voluntary Disclosure Practice – For taxpayers who willfully failed to file an FBAR.
You may also need to file a reasonable cause statement to request penalty relief. A tax attorney can help you determine the best option for your situation. You need to ensure that you choose carefully, as the benefits and requirements of each of these options vary significantly. Keep reading for more details.
Streamlined Filing Compliance Procedures
Streamlined filing compliance procedures essentially allow someone to file their FBARs late and, if applicable, pay the taxes associated with the undisclosed assets by indicating that their violations were not due to willful conduct on their part.
Requirements
To use this option, you must meet the following requirements:
- Conduct was not willful: This means that the failure was due to negligence or mistake, not an intentional avoidance of required filings.
- A civil examination has not been initiated: You can’t use these procedures if the IRS has initiated a civil examination, even if It’s unrelated to the failure to disclose foreign financial assets.
- Must have valid TIN: The individual filing must have a valid Taxpayer Identification Number.
Penalties
Taxpayers living abroad will not be subject to late filing, late payment, accuracy, or FBAR penalties. Taxpayers living in the United States will not face accuracy-related penalties, information return penalties, or FBAR penalties. However, during the covered period, they will incur a Title 26 miscellaneous offshore penalty of 5% of the highest aggregate value of their undisclosed account(s).
However, in both cases, if the IRS discovers that the failure to file was willful or that the taxpayer did not report all of their income/assets in the newly filed or amended returns, the IRS may assess penalties or even recommend criminal charges.
However, taxpayers who have previously filed delinquent/amended returns must pay previous penalties assessed.
How to file under the streamlined procedures
If you live out of the country, you must file or amend the last three years of returns to show any income related to the undisclosed assets. If you live in the United States, you cannot use the streamlined procedures unless you already filed a return – so you should amend the last three years of returns to show the undisclosed income. Then, in both cases, you should file the last six years of FBAR reports.
In red at the top of your tax returns, note “Streamlined Foreign Offshore Procedures” or “Streamlined Domestic Offshore Procedures”. You must make this note to ensure that the IRS processes your return under these procedures – if not, you may face unnecessary penalties. The IRS will not notify you that they received the return, nor will they notify you when they have completed processing the return.
Audit risk
Note that the IRS indicates that returns and FBARs submitted under streamlined procedures may have their information cross-checked with information from financial institutions, financial advisors, and other sources. It is extremely important to ensure that your filings are accurate and complete.
Delinquent FBAR Submission Procedures
You may use the Delinquent Submission Procedures if the following are true:
- You’re not required to file delinquent or amended tax returns using the Streamlined Procedures.
- You are not under civil examination or criminal investigation by the IRS.
- You haven’t been contacted by the IRS about the late FBARs.
Like all other FBARs, your delinquent FBARs must be submitted online via the BSA E-Filing System. You need to provide a reason for why the return is filed late with the delinquent filing.
Here’s an example. Say that you have a foreign bank account that was over the reporting threshold. You earned interest from the bank account, which you properly reported on your tax return but did not file an FBAR. As long as the IRS hasn’t contacted you yet, you qualify for the delinquent submission procedures. However, if you hadn’t reported that interest on your tax return, you would need to look into another option.
Criminal Investigation Voluntary Disclosure Practice
If the failure to report foreign accounts was willful, you may need to get back into compliance through the Voluntary Disclosure Practice. This option is for people who may have committed a tax crime and want to get back into compliance with the IRS.
You must contact the IRS before they contact you, and in exchange for coming forward voluntarily, you reduce the risk of criminal charges. Note that the IRS advises taxpayers to consult with an attorney before taking advantage of this program.
What is the Offshore Voluntary Disclosure Program?
The Offshore Voluntary Disclosure Program was an old program that helped taxpayers catch up on unfiled FBARs. This program ended at the end of 2018 and has not been revived since.
Submitting a Reasonable Cause Statement
Submitting a statement of reasonable cause essentially involves telling the IRS that you should not be charged penalties for your delinquent FBAR because you had reasonable cause not to file. You must be able to show that there were significant mitigating factors leading to your failure to file or events beyond your control that kept you from filing. Additionally, you must be able to prove that you acted in a responsible manner before, during, and after your failure to file.
What are the mitigating factors under this definition? Potential mitigating factors include:
- Never having needed to file that form prior to the failure to file.
- A history of complying with information reporting requirements.
- No history of previous penalties for failure to file.
- If the filer has a history of penalties, their error rate decreases each year.
Events beyond the filer’s control include an unavailability of business records for the time period in question and actions taken by the IRS or an IRS agent.
Note that the examples listed above are not an exhaustive list of reasons—the IRS will assess each reasonable cause letter on its own merits, not by checking its contents against a list.
Record Keeping and Best Practices
How can you maintain accurate records to avoid getting behind on FBAR filings in the future? Some best practices to consider include:
- Refreshing yourself on FBAR requirements and other tax laws each year ahead of tax season: Tax law does change from time to time, and not having to file one year doesn’t mean you’ll never have to file in the future. A quick search or talk with your accountant or tax expert each year can help you stay on top of your requirements.
- Keep records of all foreign accounts: Maintain accurate records from month to month. Ensure that your records include the account’s max balance during the month, the bank’s name, and the account number. As soon as you hit the filing cap—currently $10,000—add filing your FBAR to your calendar.
- Set an annual reminder: If you regularly have to file the FBAR, set calendar reminders to help you avoid delinquent filings. Some taxpayers find it helpful to set a reminder for April 15—the original deadline—and October 15, just in case you miss the first deadline.
What if I forgot to file Form 8938?
If you are required to file an FBAR, you may also be required to file Form 8938. This form requests information about specified foreign assets. It has a longer list of assets than the FBAR but has much higher reporting thresholds. Check out Form 8938 requirements now, or contact us for help with all of your unfiled international information returns.
Get Help With Delinquent FBARS Now
The stakes are high (and expensive) if the IRS realizes you have not been filing your FBARs. The options listed here can be overwhelming, and mistakes can potentially cost you thousands of dollars in penalties. But we can help.
If you’ve failed to file one or more FBARs, don’t panic. You have options, and odds are good that at least one is a good fit for you. Turn to the team at Wiggam Law to explore your options and take the first step toward compliance. To get help now, schedule a consultation or call us at (404) 233-9800.