Author: Randall Brody, Enrolled Agent | Licensed by the U.S. Department of the Treasury | Last Reviewed: July 2026
Key Takeaways
- FBAR penalties can be substantial. Non-willful violations may result in an inflation-adjusted civil penalty for each annual FBAR filing violation. Willful violations may carry a penalty equal to the greater of an inflation-adjusted statutory amount or 50% of the account balance, and criminal penalties may also apply.
- FATCA (Form 8938) is a separate but related reporting requirement with higher thresholds and different filing rules.
- FBAR and FATCA are not the same — you may be required to file both.
- Non-willful FBAR penalties are up to $10,000 per violation per year. Willful violations carry penalties up to the greater of $100,000 or 50% of the account balance.
- Expats with unreported foreign accounts may qualify for penalty-free resolution through the IRS Streamlined Procedures.
- Foreign financial institutions now report US account holders directly to the IRS — non-compliance is increasingly detectable.
Who This Is For
Foreign Accounts and the US Reporting Web
If you are a US citizen or green card holder living abroad with a foreign bank account, brokerage account, pension fund, or other financial account, you almost certainly have reporting obligations to the US government — beyond your annual tax return.
These obligations exist because the US tax system is based on citizenship, not residency. The Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA) are the two primary mechanisms the US government uses to identify and tax income held in foreign financial accounts. Since FATCA was enacted, many foreign financial institutions have been required to identify and report information about certain accounts held by US persons, either directly to the IRS or through their local tax authorities under intergovernmental agreements. As a result, unreported foreign accounts are increasingly detectable.
The penalties for failing to meet these obligations are severe. Understanding what you are required to file, and doing so correctly and on time, is not optional.
FinCEN Form 114
Who Must File
You must file an FBAR (FinCEN Form 114) if you are a US person — including citizens, green card holders, and certain residents — who has a financial interest in, or signature authority over, one or more foreign financial accounts with an aggregate value exceeding $10,000 at any point during the calendar year. The $10,000 threshold applies to the total of all foreign accounts combined, not each account individually.
What Counts as a Foreign Financial Account
- Foreign bank accounts (checking, savings, money market)
- Foreign brokerage accounts
- Foreign mutual funds
- Foreign-issued life insurance policies with cash value
- Foreign pension and retirement accounts
- Offshore hedge funds and private equity funds
Filing Deadline
The FBAR is due April 15, with an automatic extension to October 15. It is filed electronically through the Financial Crimes Enforcement Network (FinCEN) BSA E-Filing System — not with the IRS and not attached to your tax return.
Form 8938
FBAR vs. FATCA — Key Differences
|
FBAR (FinCEN 114) |
FATCA (Form 8938) |
|
|---|---|---|
|
Filed with |
FinCEN (separate from IRS) |
IRS (attached to tax return) |
|
Threshold (not filing jointly, abroad) |
$10,000 aggregate |
$200,000 on last day / $300,000 at any point |
|
Threshold (joint, abroad) |
$10,000 aggregate |
$400,000 on last day / $600,000 at any point |
|
Penalty (non-willful) |
Up to $10,000 per violation |
$10,000 + $10,000/month (up to $50,000) |
|
Covers |
Foreign financial accounts |
Foreign financial assets (broader scope) |
What Non-Compliance Actually Costs
FBAR penalties are among the most severe in the tax code, and unlike income tax penalties, they can exceed the value of the account itself.
- Non-willful violation: A non-willful failure to file a complete and accurate FBAR may result in a civil penalty for each annual FBAR violation. The statutory maximum is adjusted periodically for inflation. Penalties generally apply per annual report rather than separately to every account listed on that report.
- Willful violation: A willful FBAR violation may result in a penalty equal to the greater of an inflation-adjusted statutory amount or 50% of the balance in the account at the time of the violation. Criminal penalties may also apply.
- Interest: Interest accrues on unpaid penalties from the date they are assessed.
If penalties have already been assessed or the IRS has contacted you, review your IRS enforcement and resolution options.
Resolving Unreported Foreign Accounts
Streamlined Foreign Offshore Procedure (SFOP)
If you are an expat currently living abroad and your failure to file FBARs was non-willful, you may qualify for the Streamlined Foreign Offshore Procedure. Under the SFOP, you file six years of delinquent FBARs with no FBAR-specific penalties. This is the most favorable resolution available to qualifying expats.
Delinquent FBAR Submission Procedures
If you have unreported foreign accounts but your tax returns were filed correctly and you have no unreported income, you may be able to file delinquent FBARs without penalty under a specific IRS procedure. This option is narrow and requires careful assessment — Tax Samaritan will determine whether you qualify.
Streamlined Domestic Offshore Procedure (SDOP)
If you are no longer living abroad, the SDOP provides a path to compliance with a 5% miscellaneous offshore penalty — significantly less than standard FBAR penalties.
Frequently Asked Questions
Work With an FBAR Specialist
FBAR and FATCA compliance is not an area where errors or delays are manageable. The IRS has significantly increased international enforcement, and foreign banks are actively reporting US account holders.
Randall Brody is an Enrolled Agent licensed by the U.S. Department of the Treasury. Tax Samaritan has helped hundreds of expats come into full FBAR and FATCA compliance — including clients with multiple years of unreported accounts who qualified for penalty-free resolution under the streamlined procedures.
Learn how Tax Samaritan handles client security.
What Our Expat Clients Are Saying
Rachel C.
California, USA
As a US/UK dual citizen, I needed to amend several years of US tax filings and address two PFIC accounts. Fortunately, I found Randall, who calmly sorted everything out. Working with Tax Samaritan remotely was easy, and they responded quickly whenever I had a question. I recommend Tax Samaritan to anyone struggling with US tax reporting and FBAR filings.
Tony D.
godstone, uk
Randall Brody helped us navigate a complicated FBAR situation, clearly explaining the tax and reporting requirements and guiding us through the process. His expertise kept us on track and made an overwhelming situation much easier to manage. His fees were also quite reasonable. I heartily recommend Tax Samaritan.
Talk To An Expert
Ready to start saving money on your taxes? Please click the button below to talk to one of our expat tax experts. We are also available to discuss any other tax or planning concerns you may have.
