FBAR penalties in 2026: Everything you need to know
The penalty for failing to report your foreign bank accounts in 2026 could cost more than the accounts themselves, with willful FBAR penalties reaching $165,353 or 50% of the account balance per violation.
FinCEN’s latest inflation adjustment and tighter enforcement, along with new court rulings, have made FBAR compliance riskier than ever. Whether you're an expat, dual citizen, or accidental owner of offshore assets, this guide – based entirely on the 2026 official amendment – shows how to avoid steep fines and stay compliant.
Key takeaways
The 2026 enforcement landscape is more aggressive than ever:
- Willful violations: Up to $165,353 or 50% of the account balance per violation, plus criminal penalties of up to $250,000 and 5 years in prison, following the 2023 Supreme Court decision in Bittner v. United States.
- Non-willful violations: Up to $16,536 per report
- Filing threshold: Required if aggregate balance exceeds $10,000 at any point during the year
- Relief options: Delinquent FBAR Submission, Streamlined Filing Compliance, and Voluntary Disclosure Practice available
- Mitigation and relief programs, including the Delinquent FBAR Submission Procedures, Streamlined Filing Compliance, and Voluntary Disclosure Practice, offer options for taxpayers to come forward and reduce penalties.
What is FBAR?
The Foreign Bank Account Report (FBAR), formally known as FinCEN Form 114, is an electronic information return mandated by 31 USC. Section 5314 and 31 C.F.R. Section 1010.350. US persons – including citizens, green card holders, and resident aliens – must file it if they hold a financial interest in or signature authority over foreign financial accounts totaling more than $10,000 at any time during the calendar year.
Reportable accounts include not just bank accounts, but also foreign mutual funds, securities accounts, and other financial instruments. The FBAR filing deadline is April 15, with an automatic extension to October 15 if you use our free tax extension service, available for all filers.
What is the penalty for late filing of FBAR in 2026?
FBAR penalties depend on whether your failure is classified as willful or non-willful.
Willful FBAR penalty amounts
Willful violations occur when you knowingly fail to file or intentionally disregard the requirement:
- Civil penalty: Greater of $165,353 per violation or 50% of the unreported account's balance
- Criminal penalty: Up to $250,000 and/or 5 years imprisonment for willful failure; up to $10,000 and/or 5 years for knowingly filing a false FinCEN 114
Example: An expatriate with $800,000 across three Swiss accounts forgot to file for 2024. The IRS deemed it willful, and the civil fines reached $400,000. A separate criminal referral exposed the client to 5 years in prison and another $250,000 fine.
Non-Willful FBAR penalty amounts
Non-willful violations are unintentional failures:
- Civil penalty: Up to $16,536 per report (not per account, following Bittner v. United States)
- Reasonable cause: IRS may waive the penalty entirely
Following the 2023 Supreme Court decision in Bittner v. United States, non-willful penalties are capped per report rather than per account. For example, ignoring four years of FBARs with 15 accounts each generates at most four $16,536 penalties ($66,144 total) rather than 60 separate penalties.
Example: A dual-resident software engineer missed the 2023 filing but promptly corrected it. With documented reasonable cause and no tax under-reporting, the IRS can waive the penalty entirely.
Penalty summary table
| Violation Type | Penalty Amount (2026) | Maximum Cap |
|---|---|---|
| Non-Willful | Up to $16,536 per report | N/A (capped per form, not account) |
| Willful | Greater of $165,353 or 50% of balance | No annual cap |
| Criminal | Up to $250,000 | 5 years in prison |
FBAR statute of limitations: How far back can the IRS go?
The IRS has 6 years from the date of the violation to assess FBAR penalties. This means if you failed to file in 2020, the IRS can still assess penalties until 2026.
However, there are important exceptions:
- If you never filed an FBAR, the statute of limitations may never start
- Willful violations may extend the statute of limitations further
- Criminal prosecution follows different timelines
Bottom line: Don't assume old violations are safe. The IRS has a long memory and powerful enforcement tools.
How the IRS finds unreported foreign accounts
Global data sharing means your foreign accounts aren’t private. From FATCA to FinCEN Query, here’s how the IRS finds unreported accounts – even if they’re buried overseas.
- FATCA data sharing: Over 110 partner jurisdictions transmit US-account data to the IRS under Model 1/2 IGAs.
- International banking cooperation: FinCEN Query and other BSA databases cross-match foreign account info received from banks.
- Risk flags during audits: The IRS’s SB/SE and LB&I examiners use IRM 4.26 filters (e.g., Schedule B inconsistencies) to pick returns for FBAR review.
Late FBAR filing options & amnesty programs
Missed the deadline? Don't file quietly, hoping the IRS won't notice. The IRS offers several official programs designed to help you come forward, reduce penalties, and avoid criminal charges.
Delinquent FBAR Submission Procedures
If you've already reported the income and owe no tax, file the late FinCEN 114 electronically, mark "delinquent," and attach a concise statement. The IRS generally issues no FBAR penalty when the facts are reasonable.
Streamlined Filing Compliance Procedures
Qualifying non-willful taxpayers can file three years of amended returns plus six years of FBARs. Along with these filings, applicants must include a taxpayer certification form to confirm non-willfulness and complete their streamlined procedure package. Offshore fines are 0% (foreign residents) or 5% (US residents) of the highest unreported account balance – far below willful rates.
In case you're wondering where to even start from, or you are a filing novice, Taxes for Expats has softened the process with our streamlined procedure service, made with expats in mind.
IRS Voluntary Disclosure Practice (VDP)
For willful cases where criminal exposure looms, the IRS Voluntary Disclosure Practice (VDP) allows full disclosure, payment of tax, a 75% fraud penalty, and the statutory civil FBAR penalty – but generally avoids prosecution. Early entry is critical; once you're under investigation, VDP shuts.
Can FBAR penalties be waived?
Yes – but only if you qualify under specific IRS programs. Here are your best options:
Reasonable cause defense
Demonstrate (in writing) that you exercised ordinary business care but circumstances prevented timely filing – e.g., natural disasters, inaccessible records, or professional advice that turned out wrong. Cite supporting documents; if accepted, the IRS drops all FBAR penalties.
First-time abate
Many taxpayers come across "First-Time Abate" while researching penalty relief options and assume it might help with FBAR penalties. Unfortunately, that's not the case.
FTA only works for certain IRS tax penalties (like failure-to-file or failure-to-pay penalties on Form 1040). FBAR is a separate FinCEN filing, so FTA doesn't apply. If you're hoping for penalty relief, focus on reasonable cause or one of the amnesty programs above.
Common FBAR mistakes to avoid
It’s the little things that trip people up. From exchange rates to crypto wallets, these are the most common – and costly – filing mistakes expats make.
- Forgetting joint accounts held with a non-US spouse or elderly parent.
- Misreading the $10,000 threshold as “per account” rather than aggregate.
- Late filing without disclosure – simply sneaking FinCEN 114 into the system forfeits mitigation opportunities.
- Using tax-year exchange rates instead of calendar-year Dec 31 rates.
- Omitting cryptocurrency “cash-value” wallets at foreign exchanges (FinCEN has signaled future FBAR coverage).
Should you hire a tax professional to help with FBAR?
Given the six-figure fines, potential criminal exposure, and evolving court precedent, most expats choose professional help.
Taxes for Expats CPAs and enrolled agents specialize in FBAR reporting, reasonable-cause narratives, and Streamlined or VDP submissions. Let us cut your risk – and your stress – before the next April 15 clock starts.
FAQ – FBAR penalties & compliance
Failing to file FinCEN 114 can result in civil FBAR penalties up to $16,536 per report for non-willful cases, or $165,353 or 50% of the account for willful violations. Criminal charges may apply, carrying fines up to $250,000 and 5 years in prison, so ensure you report foreign bank accounts.
Log in to the BSA E-Filing System, choose File Amended FBAR, and submit a complete Foreign Bank Account Report – checking the Amend box and listing all accounts, not just the ones you’re fixing. FinCEN’s filing guide stresses that every amended submission must be a full replacement report.
The Treasury can assess civil FBAR penalties for up to six years after the original due date. For an FBAR that was never filed, that clock never starts – leaving exposure open indefinitely.
FATCA treaties enable over 110 countries to share US account holder data automatically. FinCEN and IRS use this with analytics and tax return matching to flag discrepancies.
Absolutely. Global data-sharing, whistle-blower tips, and AI-driven pattern analysis let the IRS spot missing FBAR reporting quickly. Once identified, taxpayers face the full menu of fines, back-dated interest, and – where willfulness appears – criminal referral.
