The IRS modified language on its website that previously assured certain taxpayers they wouldn’t be subject to penalties for failing to file delinquent Foreign Bank and Financial Accounts (FBAR) reports, on FinCEN Form 114. The change doesn’t necessarily mean similarly situated taxpayers will automatically face penalties going forward, but it reduces the level of certainty that previously existed for taxpayers seeking to correct missed FBAR filings.
Importantly, the website modification itself doesn’t change the underlying FBAR filing requirements, statutory penalty provisions, or FinCEN reporting obligations. Instead, it removes previously published administrative language that many taxpayers and advisors considered when evaluating whether to voluntarily submit delinquent FBAR filings.
Who must file an FBAR report?
Generally, a U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust, or estate, must file an FBAR to report a financial interest in, signature authority over, or other authority over at least one financial account located outside the United States, if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
The IRS notes that whether or not an account produced taxable income has no effect on if the account is considered a foreign financial account for FBAR purposes. The IRS also lists several limited exceptions to the FBAR filing requirement, so taxpayers should review the rules before concluding if a filing is or isn’t required.
The FBAR is due April 15 following the calendar year reported. Taxpayers who miss the April 15 deadline receive an automatic extension to October 15, with no extension form required. Additional extensions may be available in certain circumstances, such as when disaster relief applies.
What changed in the recent IRS website modification?
Until mid-2026, the IRS website included language indicating that the IRS wouldn’t impose a penalty for failure to file delinquent FBARs if taxpayers had properly reported and paid U.S. tax on income from the foreign financial accounts and had not previously been contacted regarding an income tax examination or a request for delinquent returns for the years at issue.
That language no longer appears on the IRS website. The current IRS FBAR page states that filing an FBAR late or not at all is a violation and may subject the taxpayer to penalties. It also states that taxpayers who haven’t been contacted by the IRS about a late FBAR and who aren’t under civil or criminal investigation should file late FBARs as soon as possible to keep potential penalties to a minimum.
Why the FBAR update matters
The practical concern isn’t that every delinquent FBAR will now trigger a penalty. Rather, the prior website language provided clearer administrative assurance for taxpayers who appeared to satisfy specific criteria. With that assurance removed, taxpayers may face greater uncertainty regarding how late FBAR submissions and penalty relief requests will be evaluated.
For taxpayers and advisors, the change makes fact development more important. Before filing delinquent FBARs, taxpayers should confirm whether all income from the foreign accounts was properly reported, whether U.S. tax was paid, whether the IRS has already initiated contact, and whether other international information returns may also be implicated.
What penalties may apply to FBAR violations?
FBAR penalties can be significant. The IRS states that taxpayers may be subject to civil monetary penalties and/or criminal penalties for FBAR reporting and recordkeeping violations, and that the assertion of penalties depends on the facts and circumstances. Because civil FBAR penalty maximums are adjusted annually for inflation, taxpayers should avoid relying on outdated penalty amounts when evaluating potential exposure.
This is a fact-specific analysis. Penalty exposure can depend on the taxpayer’s conduct, the number of years involved, account balances, recordkeeping, prior compliance history, and whether the failure appears willful or nonwillful.
Compliance options after the IRS website update
Taxpayers with missed FBAR filings may still have options, but the appropriate path depends on the facts. Some taxpayers may be able to file late FBARs and provide an explanation for the delay. Others may need to consider broader compliance options, particularly if income from the foreign accounts was omitted from U.S. tax returns or if other international information returns were also missed.
The IRS delinquent international information return procedures separately state that taxpayers who aren’t under civil examination or criminal investigation and haven’t already been contacted about delinquent international information returns should file those returns through normal filing procedures, and that penalties may be assessed in accordance with existing procedures. Taxpayers may attach reasonable cause statements where appropriate, but the IRS notes that penalties may be assessed during processing without considering the attached reasonable cause statement, requiring taxpayers to respond to later correspondence.
Next steps for taxpayers with FBAR reporting obligations
Taxpayers with foreign financial accounts should promptly review prior-year filing obligations and determine whether any delinquent FBARs exist. Given the IRS removal of prior penalty-relief language, taxpayers shouldn’t assume administrative relief will be available under the same terms that previously appeared on IRS.gov. However, timely voluntary action may still reduce compliance risk and improve the likelihood of a more favorable resolution.
A practical review should address whether the taxpayer met the FBAR filing threshold in prior years, whether foreign-account income was reported on U.S. tax returns, whether any international information returns are also missing, whether the IRS has already contacted the taxpayer, and which compliance path best matches the taxpayer’s facts.
Key takeaways
- The IRS removed website language that previously stated certain delinquent FBAR filings wouldn’t be subject to penalties.
- The change doesn’t alter the FBAR filing requirement or the statutory penalty framework.
- Taxpayers may face greater uncertainty regarding how penalty relief will be administered.
- Prompt voluntary compliance may still provide for better outcomes, depending on the facts.
- Individuals and businesses with foreign financial accounts should review prior-year filing obligations with their advisors.
