Delinquent FBAR Submission Procedures for U.S. Expats
If you missed one or more FBARs, the IRS gives you four ways to catch up, and the right one depends on a single question: were your U.S. tax returns for those years filed and complete? If yes, the Delinquent FBAR Submission Procedures let you file the late FBARs with a short explanation and, if you qualify, generally no FBAR penalty is imposed. If income was also unreported or returns were never filed, the Streamlined Filing Compliance Procedures fix both at once. The other two routes, quiet disclosure and the Voluntary Disclosure Practice, are for people who should not be using the first two. This guide explains how to pick the path, how many years to file, and what the late filing statement needs to say.
Key Takeaways
- Delinquent FBAR Submission Procedures apply when your tax returns were complete and only the FBARs were missed. There is no penalty if the IRS accepts your reason.
- If income was unreported too, use the streamlined procedures instead. Using the delinquent procedures with unreported income does not work, even for small amounts of interest.
- File every required FBAR you missed within the last six years.
- Every late FBAR is filed electronically through the BSA E-Filing System and includes a reason for late filing.
- A quiet disclosure, filing late with no explanation, is the one approach the IRS has said it is watching for.
Which path applies to you
|
Your situation |
Path |
Penalty exposure |
|---|---|---|
|
Tax returns filed and complete. Foreign account income was reported. Only the FBARs were missed. Not under IRS examination. |
Delinquent FBAR Submission Procedures |
None, if the IRS accepts the reason for late filing. |
|
Tax returns not filed, or filed without the foreign income. The failure was not intentional. |
Streamlined Filing Compliance Procedures (Foreign or Domestic) |
None under the foreign procedures. A 5 percent offshore penalty under the domestic procedures. Tax and interest are still due. |
|
You knew about the requirement and chose not to file. |
Voluntary Disclosure Practice |
Civil fraud penalty and willful FBAR penalties, in exchange for protection from criminal prosecution. |
|
Filing late FBARs and amended returns with no explanation. |
Quiet disclosure |
Full penalty exposure if examined. The IRS discourages this route and has stated it identifies these filings. |
The line between the first two rows is sharper than it looks. The delinquent procedures require that every dollar of income from the foreign accounts was already reported and taxed. One year of unreported interest, even a few dollars, moves you to the streamlined row.
Who must file an FBAR
Any U.S. person whose foreign financial accounts together exceeded $10,000 at any point in a calendar year must file an FBAR for that year. That includes citizens and green card holders living abroad, and it includes accounts you can sign on but do not own. If you are not sure whether you were required to file in a given year, start with our FBAR filing requirements guide before deciding how to catch up.
How many years of delinquent FBARs to file
For direct delinquent FBAR filing, file all required FBARs you missed within the six-year assessment period. The IRS does not currently specify a fixed six-year submission package for direct late filing, but the statute of limitations for assessing FBAR civil penalties is generally six years from the due date of the report. File only years in which you met the $10,000 aggregate reporting threshold.
Under the Streamlined Filing Compliance Procedures, the rule is more specific: for each of the most recent six years for which the FBAR deadline has passed, file any delinquent FBAR that was required.
If you cannot obtain complete records for one of the required years, file as complete an FBAR as possible using the information available, say so in the reason for late filing, and amend later if better information becomes available. Omit the year only if you reasonably conclude it was not required.
Delinquent FBAR Submission Procedures, step by step
1. Confirm you qualify. All of these must be true: your income tax returns for the years in question were filed; all income from the foreign accounts was reported on them and any tax was paid; you are not under an IRS civil examination or criminal investigation; and the IRS has not already contacted you about the missing FBARs.
2. Gather the account details for each missed year. Institution name and address, account number, account type, and the maximum value during that year converted to U.S. dollars at the Treasury year-end rate for that year. Prior-year rates are published on the Treasury’s exchange rate page.
3. File each year electronically through the BSA E-Filing System. Each year is a separate FinCEN Form 114. Nothing is mailed to the IRS.
4. Select the reason for late filing on each form. The form asks why the report is late and provides a list of reasons to choose from. If none of the listed reasons fits, select “Other” and enter your explanation in the text box provided. What to write is covered in the next section.
5. File all missed years at the same time. Filing one year and waiting on the others draws attention to the gap. Submit the full set together.
6. Keep the acknowledgment for each year. The BSA system emails a confirmation for each filing. Save each one. The IRS does not send a letter accepting a delinquent FBAR submission; the confirmation is your record.
The late filing statement: what to write
The IRS is deciding one thing when it reads your explanation: did you know about the requirement and ignore it, or did you not know? A statement that answers that question directly, with facts the IRS could check, is what reasonable cause looks like. A statement that argues, apologizes, or quotes the law is not.
Four things every statement should include. First, the facts of your situation during the years in question: where you lived, what the accounts were for, who advised you on taxes. Second, why you did not file: you were unaware the requirement existed, you were told by a preparer it did not apply, you believed the account was exempt. Be specific about the source of the misunderstanding. Third, how you found out: a letter from your bank, a new preparer, an article. Fourth, what you did once you knew: the date you learned and the date you filed. A short gap between those two dates is the strongest single fact in the statement.
What to leave out. Do not state that the failure was not tax evasion; the IRS reads that as a conclusion, not a fact. Do not include account balances or income figures; those are on the FBAR and the returns. Do not use language from a template you found online. IRS reviewers see the same template hundreds of times.
What a strong statement looks like. A teacher working in Kuwait had a local salary account opened by the employer. The teacher’s U.S. preparer prepared three years of returns and never asked about foreign accounts. After a colleague mentioned the FBAR in March, the teacher reviewed the missed years and filed every required FBAR in April. The statement would simply report those facts in order without arguing the legal standard.
Delinquent FBAR vs streamlined: how to decide
Both procedures waive FBAR penalties for people whose failure to file was not intentional, and both work within the six-year FBAR penalty window. The difference is what else is in the package. The delinquent procedures are FBARs only, filed through FinCEN with a reason for late filing. The streamlined procedures add three years of federal tax returns, a signed certification of non-willfulness on Form 14653, and payment of any tax and interest, mailed to the IRS as one submission.
You cannot choose the simpler one because it is simpler. If any foreign account income was left off a return for any of the years, the delinquent procedures are not available and the streamlined procedures are the correct route. Our streamlined procedure guide covers eligibility and the full package.
Why FBAR Quiet Disclosures are Discouraged
FBAR quiet disclosures are discouraged because they do not protect taxpayers from penalties or IRS scrutiny. This method involves filing delinquent FBARs and amended returns without formally notifying the IRS while paying any related tax and interest for previously unreported offshore income. Although it may seem tempting to avoid the penalties associated with voluntary disclosure programs, the current regulatory environment makes it clear that quiet disclosures are not a safe option.
The IRS has openly stated that it knows taxpayers are attempting quiet disclosures. A lack of immediate response does not mean the filing has been accepted or that penalties will not follow. Returns and disclosures may still be selected for examination or checked against information the IRS receives from banks, financial institutions, and other sources.
The IRS also receives foreign account information through the International Data Exchange Service (IDES), which allows foreign financial institutions and tax authorities to transmit FATCA information securely to the United States. This gives the IRS a standardized way to receive information about U.S. account holders with foreign financial accounts. That information can be compared with tax returns, FBARs, and other filings when the IRS reviews compliance.
What willful means
FBAR willfulness means intentionally violating a known legal duty. Your conduct may be considered willful if you knew you were required to file an FBAR and deliberately chose not to comply.
The IRS must show that you knew about the filing requirement. However, simply claiming you did not know may not be enough if the facts suggest willful blindness, such as deliberately avoiding information about your obligations or trying to conceal foreign accounts. Courts may infer willfulness from a taxpayer’s conduct and the surrounding circumstances.
For example, foreign banks and financial advisors increasingly notify account holders about U.S. reporting obligations through letters or documents such as Declarations of Consent. Ignoring those warnings may support an argument that the failure to file was willful.
Voluntary Disclosure Practice
The Voluntary Disclosure Practice (VDP) allows taxpayers who willfully failed to report foreign financial assets to come forward and correct the issue. It can reduce the risk of criminal prosecution, but it does not guarantee immunity. The IRS reviews each case based on its facts and circumstances.
Taxpayers begin by submitting a pre-clearance request using IRS Form 14457. IRS Criminal Investigation reviews the request to determine eligibility. If accepted, the taxpayer must fully disclose the unreported assets, income, and related advisors and cooperate with the examination. The process generally ends with payment of back taxes, interest, and penalties.
The VDP penalty framework includes a civil fraud penalty for at least one year with the highest tax deficiency. Willful FBAR penalties may also apply when foreign account reporting violations are involved.
Frequently asked questions
Get help with late FBARs
Tax Samaritan files delinquent FBARs under both IRS procedures and prepares the reason-for-late-filing statement as part of the work. If your returns were complete, the delinquent submission is a short engagement. If they were not, our streamlined catch-up filing service handles the returns, the FBARs, and Form 14653 together. Either way, the first step is a free quote, and the first question we will ask is the one above: were the returns complete?
