FBAR quiet disclosure 2026: Risks, IRS penalties, and why Streamlined FBAR disclosure is better
Many Americans living abroad discover that several foreign bank accounts should have been reported on FinCEN Form 114, with FBARs for the 2025 calendar year due April 15, 2026, and automatically extended to October 15, 2026, and decide to quietly file the missing forms without using an IRS compliance program – a step commonly referred to as an FBAR quiet disclosure.
They are drawn to an IRS quiet disclosure because it seems like a simple fix, but the exposure remains real. Keep in mind that the IRS does not treat this as a formal compliance path and instead directs taxpayers toward recognized options such as Delinquent FBAR Submission Procedures, the Streamlined Filing Compliance Procedures, or the Voluntary Disclosure Practice in higher-risk cases.
Brought to you by Taxes for Expats, a US expat tax team that has helped 2,200+ Americans worldwide resolve non-compliance through CPA-led procedures since 2012. Looking for the right disclosure path? Our team is ready to help you prepare a complete and consistent submission.
What is an FBAR quiet disclosure?
An FBAR quiet disclosure is filing late FBARs or offshore corrections outside an IRS-recognized disclosure process, usually without the required procedural statements and certifications the IRS expects.
Typical examples
- Late FBARs filed without explanation – past-due FinCEN Form 114 filed through the BSA e-filing system, but with no reference to an approved IRS procedure, even though the IRS provides specific options for delinquent FBAR filing and streamlined submissions.
- Amended tax returns + FBARs filed “quietly” – amended returns that add previously unreported offshore income, filed together with back-year FBARs, but without using the IRS certification and disclosure framework required under formal offshore compliance procedures.
- “Delinquent” filing without meeting the criteria – calling a submission “delinquent FBAR” even though IRS conditions are not met, such as when related income was not fully reported, or the IRS has already started contact about an examination.
A quiet disclosure FBAR approach does not, by itself, limit penalties. Civil FBAR penalties can still apply under the general rules. The current inflation-adjusted maximums for penalties assessed on or after January 17, 2025, are up to $16,536 for non-willful violations and up to $165,353 for willful violations, with willful cases also tied to the statutory 50% standard.
The difference between simply amending and using a formal IRS process becomes clear when the two approaches are placed side by side.
| Approach | What it looks like | What the IRS has published | Typical penalty posture |
|---|---|---|---|
| Amended filing only | Amended returns and/or late FBARs submitted without the required program labels, certifications, and procedural statements | The IRS has warned about quiet disclosures and the risk of examination tied to them | No built-in penalty structure; general FBAR penalty rules apply under 31 USC 5321 and related regulations |
| Formal disclosure | A Streamlined package with Form 14653 or Form 14654, or the use of Delinquent FBAR Submission Procedures when income was already reported | Streamlined requires specific filings and certifications; SDOP applies a 5% miscellaneous offshore penalty, and delinquent FBAR procedures can result in no FBAR penalty when conditions are satisfied | Structured treatment under published IRS guidance with defined penalty terms |
NOTE! Quiet disclosure is not an IRS program. The IRS has clearly addressed the risks of quiet submissions.
In practical terms, quiet disclosure vs streamlined comes down to whether the correction follows the IRS’s published framework, including required certifications, statements, and penalty calculations.
IRS position on quiet disclosure of FBAR
The IRS has publicly warned about quiet disclosures, describing them as so-called quiet disclosures’ made outside of the Offshore Voluntary Disclosure Program (OVDP) on its Streamlined page.
On that same page, the IRS explains why amended returns and late FBARs filed quietly can still create problems – streamlined may still be available, but prior penalty assessments will not be abated.
For enforcement, the IRS says submissions can be checked for accuracy against information received from banks and other sources, and may be selected for audit under normal processes – that kind of data matching is how quiet filings get pulled into an exam.
Why the IRS quiet disclosure is risky
Understandably, an IRS quiet disclosure can feel like the quickest fix. As explained in this article, though, saying it is risky is not enough – it is important to see exactly why it can fail and how it can quietly make things worse.
Audit risk
A “quiet” filing doesn’t create penalty protection and may still be reviewed under normal IRS selection processes. The IRS also notes that submissions can be checked against information received from banks, financial advisors, and other sources.
Loss of eligibility for streamlined
The quiet disclosure vs streamlined choice matters because the streamlined is only open before the IRS starts an exam. Streamlined is only available if you’re eligible at the time you submit.
If the IRS has initiated a civil examination of any of your returns (even if unrelated to foreign assets), you’re not eligible for streamlined.
Criminal exposure (high-level, non-alarmist)
IRS guidance has warned that quiet submissions can be reviewed for possible criminal issues in serious cases. Most expats with simple mistakes never reach that level, but using the wrong path can create risk where a clear, approved process would have reduced it.
Penalty escalation
A quiet disclosure penalty can still apply after the forms are filed. Current inflation-adjusted FBAR maximums are $16,536 for a nonwillful violation and $165,353 for a willful violation, and penalties can stack across years.
Examples of FBAR quiet disclosure penalty
Even small mistakes can grow fast once penalties are on the table.
| Violation Type | Potential Penalty | IRS Discretion Risk |
|---|---|---|
| Non-willful FBAR | Up to $16,536 per violation (inflation-adjusted for penalties assessed on or after Jan 17, 2025) | High |
| Willful FBAR | Up to the greater of $165,353 (inflation-adjusted maximum for penalties assessed on or after Jan 17, 2025) or 50% of the account balance at the time of the violation | Very high |
| Multiple years | Per-year stacking | Severe |
Quiet disclosure vs Streamlined FBAR disclosure
Streamlined FBAR filing is an official IRS way to fix late FinCEN Form 114 reports using clear steps and required forms.
A quiet disclosure FBAR means sending in late FBARs or amended returns without using an IRS-approved process. The IRS has warned that these quiet filings can be reviewed and that earlier penalties usually stay in place.
Streamlined FBAR disclosure works differently. It follows written IRS rules – three years of tax returns, six years of FBARs, and a signed non-willful statement on Form 14653 or Form 14654.
Who is eligible for it (Streamlined FBAR disclosure):
- The mistake was non-willful, meaning it happened because of error, neglect, or misunderstanding.
- No IRS civil audit has started.
- No IRS criminal case is open.
- Three tax years and six FBAR years with passed deadlines are included.
- Form 14653 is used for the foreign track.
- Form 14654 is used for the domestic track.
- The domestic track includes a 5% offshore penalty based on the highest total balance during the covered years.
- The foreign track removes common penalties, including FBAR penalties, when rules are followed.
These clear rules and set penalty terms make the difference below easy to see.
| Feature | Quiet Disclosure | Streamlined FBAR |
|---|---|---|
| IRS-approved | No | Yes |
| Penalty protection | None | Often waived |
| Audit risk | High | Low |
| Best for expats | No | Yes |
| IRS forms required | Inconsistent | Structured |
Why Streamlined FBAR disclosure is the better option for expats
Streamlined gives expats a defined IRS path to fix past noncompliance without creating new risk.
1. A clear non-willful standard
Streamlined is built on the IRS definition of non-willful conduct – negligence, inadvertence, mistake, or a good faith misunderstanding of the law. That legal framing is part of the submission itself.
A quiet disclosure FBAR filing, by contrast, sends amended returns or late FBARs without that structured explanation. With current maximum penalties at $16,536 for non-willful violations and $165,353 for willful violations (per violation, inflation-adjusted), using a formal process matters.
2. Predictable offshore streamlined benefits
For qualifying expats under Streamlined Foreign Offshore Procedures (SFOP), a complete submission generally results in zero miscellaneous offshore penalties.
For US residents under Streamlined Domestic Offshore Procedures (SDOP), exposure is consolidated into a single 5% miscellaneous offshore penalty base.
Both tracks require:
- 3 years of amended or delinquent US tax returns
- 6 years of FBARs
- Payment of tax and interest due
The structure replaces uncertainty with defined rules – and preserves eligibility when addressed before IRS contact.
3. FBAR and tax returns are filed together
Streamlined resolves the full offshore picture in one coordinated package. Returns, FBARs, and required international forms align across the same 3-year and 6-year framework, reducing inconsistencies that can trigger review.
This integrated approach is especially important for expats with foreign income, credits, pensions, or multi-country histories.
4. Form 14653 strengthens the submission
Under SFOP, Form 14653 certifies eligibility and explains why prior noncompliance was non-willful. The certification is signed under penalties of perjury and attached to the filing.
NOTE! Preparing that explanation correctly is critical. With 14+ years of Streamlined experience and 2,200+ successful cases across 190+ countries, our CPAs at Taxes for Expats structure submissions so they meet IRS standards the first time – and allow clients to move forward with clarity and peace of mind.
Other IRS compliance options
Streamlined is where many expats begin the conversation with TFX, but it is not always the only answer. Our CPAs have worked these cases since 2012 and supported 2,200+ clients worldwide, which makes it easier to identify when another IRS compliance option provides a cleaner procedural path.
Delinquent FBAR Submission Procedures
Delinquent FBAR Submission Procedures are designed for late FBAR filings when the underlying US tax reporting was already done correctly.
The IRS says it will not impose an FBAR penalty under Delinquent FBAR Submission Procedures if you properly reported and paid tax on the income from the foreign accounts, and you have not previously been contacted about an income tax examination or a request for delinquent returns for the years involved.
What makes this option work smoothly in practice
- One focused deliverable: delinquent FBARs filed electronically, paired with a concise explanation for the late filing (the narrative matters).
- Fast course-correction mindset: IRS guidance emphasizes filing late FBARs as soon as possible to keep potential penalties to a minimum.
- Avoiding the “patchwork fix”: a quiet disclosure FBAR approach often looks similar on the surface but skips the published procedural framing, which can create unnecessary review risk when filings suddenly change across multiple years.
Voluntary Disclosure Practice (for willful cases)
Voluntary Disclosure Practice is the IRS Criminal Investigation-managed pathway intended for willful exposure, where the priority becomes a structured process and a documented resolution.
The IRS process centers on Form 14457 and a staged acceptance flow that starts with preclearance through Criminal Investigation before the matter moves to civil examination.
High-level procedural markers that matter
- Timing is tight by design: after receiving a preclearance letter, the IRS states Part II must be submitted electronically within 45 days, with no more than one 45-day extension permitted.
- Clear handoff to civil once accepted: upon preliminary acceptance, Criminal Investigation forwards the disclosure to a civil section of the IRS to work the case through the examination process.
This option is less about speed and more about a disciplined, complete submission that can stand up over time under an IRS-defined framework.
Common myths and misconceptions about FBAR quiet disclosure
A few persistent myths make offshore cleanup feel simpler than it really is – and that’s where unnecessary risk starts.
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Quiet disclosure is an IRS program
Quiet disclosure is a nickname, not a protected process, and it does not come with a defined penalty framework. The IRS has explicitly discussed quiet submissions as something taxpayers attempt outside formal disclosure options. -
Filing late FBARs means the IRS will just be happy it’s fixed
The IRS treats late filing as a violation that may be penalized, even when the intent was simply to correct the record. IRS guidance does encourage filing as soon as possible to reduce exposure, but that is not the same as guaranteed relief. -
Quiet disclosure is safer as long as the IRS contact hasn’t started
Timing does matter – but structure matters more.As Wendy Christiansen, CPA, Tax Supervisor at Taxes for Expats, explained in her Streamlined webinar: "The biggest thing is to do this before the IRS comes to you.If the IRS reaches out first, you may no longer be eligible for the streamlined procedures".
Early action helps only when paired with the correct IRS process.
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Quiet disclosure avoids FBAR penalties
Quiet filing does not switch off the penalty rules – it simply files late without the guardrails of an IRS pathway. When the facts truly fit, the IRS has a specific lane where it states it will not impose a penalty for delinquent FBARs, but the conditions must be met. -
Amending tax returns and filing FBARs is the same as Streamlined
Streamlined is a packaged submission with required components, including a certification and procedural formatting, not just sending corrections. The IRS describes streamlined as a defined set of steps available only to taxpayers certifying non-willful conduct. -
The IRS can’t tell the difference between quiet disclosure and Streamlined
Streamlined submissions contain signals that quiet filings do not – especially the formal certification and the way the package is prepared and presented under published instructions.The IRS also states it is aware of taxpayers attempting quiet submissions, which undercuts the idea that they blend in unnoticed.
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Quiet disclosure is cheaper, so it makes more sense
Lower cost upfront can mean higher risk later.Wendy Christiansen also noted that, "The IRS is very procedural – they want specific returns in a specific order. If you don’t submit it exactly the way they ask, it may not be processed correctly, and you could be subject to penalties".
Precision matters more than price.
What to do if you’ve already used FBAR quiet disclosure
Step 1: Do not panic – quiet disclosure is not automatically penalized
A quiet submission does not automatically equal a penalty assessment, and many cases never escalate. The immediate goal is to get clarity on what was filed, what was missed, and what the IRS has already seen.
Step 2: Check whether the IRS has contacted you
Document any notices, IDR requests, letters, or audit activity tied to the years involved. IRS contact can change which compliance options remain available, so this checkpoint comes first.
Step 3: Review whether the filing actually qualifies as “quiet disclosure”
Some filings labeled “quiet” are simply delinquent FBARs with a proper explanation, while others include amended returns, missing forms, or incomplete account reporting. Compare what was filed to the IRS’s stated requirements for delinquent FBAR submissions to see whether the safer lane was actually used.
Step 4: Determine whether Streamlined filing may still be an option
IRS guidance acknowledges taxpayers sometimes file “quiet” corrections and then later look for a formal path; streamlined may still be possible when eligibility conditions remain satisfied. Expect one hard rule in practice – prior assessed penalties generally do not get unwound simply because a streamlined package is submitted later.
Step 5: Do not attempt to “fix” a quiet disclosure by filing again without guidance
Doubling back with a second set of filings can create mismatches across years, balances, income items, and forms, which is exactly what triggers deeper scrutiny. Stabilize the record first – then choose a single coherent strategy.
Step 6: Understand that Voluntary Disclosure may be required in some cases
When willfulness risk is present, Voluntary Disclosure Practice is the IRS’s structured route, run through IRS Criminal Investigation using Form 14457 and specific timing requirements. That lane is built for higher-risk facts and aims for a controlled resolution rather than piecemeal corrections.
FAQs on FBAR quiet disclosure
An FBAR quiet disclosure usually means filing delinquent FinCEN Form 114 reports or amended tax returns to correct offshore issues without using an IRS disclosure process. The IRS calls these “quiet disclosures” made outside formal programs.
Filing late reports is not automatically unlawful, but the IRS warns that “quiet” submissions can be examined and, in serious cases, lead to criminal prosecution. Using an IRS-recognized procedure lowers avoidable exposure.
The IRS does not treat quiet disclosure as a program and strongly encourages taxpayers to come forward through recognized options. It notes it identifies amended returns reporting income increases and reviews them closely.
Quiet disclosure does not change penalty rules. The IRS says FBAR penalties apply per year and are inflation-adjusted. IRS guidance cites up to $10,000 for non-willful violations and the greater of $100,000 or 50% of the account balance for willful violations, inflation-adjusted.
The IRS says streamlined submissions may be checked against information from banks, financial advisors, and other sources. It also identifies amended returns reporting income increases and reviews them closely, which is how quiet disclosures often surface.
Streamlined filing is an IRS-defined compliance procedure with required certifications and prescribed filing steps. Quiet disclosure generally means filing amended returns or late FBARs outside that framework, without formally entering an IRS program.
The IRS says taxpayers who previously filed delinquent or amended returns as “quiet disclosures” may still use streamlined procedures by following the instructions. It also states that any penalty assessments already made will not be abated.
Instead of quiet disclosure, the IRS points taxpayers to recognized options such as streamlined procedures for non-willful conduct, Delinquent FBAR Submission Procedures for certain FBAR-only cases, or the IRS Criminal Investigation Voluntary Disclosure Practice for willful exposure.
