FBAR penalties: what happens if a report is missing or incorrect?

Non-willful violations: the maximum is $16,536 per violation. Bittner limited non-willful penalties to one per report, not one per account. IRS guidance also caps total non-willful penalties across all open years at 50% of the highest aggregate balance of the accounts. The IRS may propose less, or no penalty.⁠^{[2]Source 2}⁠^{[4]Source 4}

Willful violations: under 31 U.S.C. 5321(a)(5), the maximum is the greater of $165,353 or 50% of the balance in the account at the time of the violation. Willful penalties are generally calculated account by account. Willful conduct can also lead to criminal prosecution where further elements are proven.⁠^{[2]Source 2}⁠^{[4]Source 4}⁠^{[5]Source 5}

These are the 2025 adjusted amounts; no adjustment was made for 2026. They apply to penalties assessed on or after January 17, 2025, but only for violations after November 2, 2015. Older violations use the original statutory amounts of $10,000 and $100,000.⁠^{[4]Source 4}⁠^{[6]Source 6}⁠^{[7]Source 7}

Time limits: the IRS must assess an FBAR penalty within six years of the violation. The government then has two years from assessment to sue to collect it.⁠^{[5]Source 5}

Non-willful conduct is a failure to file or report correctly without the knowledge, recklessness or willful blindness that makes conduct willful. Examples include not knowing about the requirement, misreading the instructions, forgetting a secondary account or mishandling records. Those facts don't on their own prove reasonable cause.⁠^{[1]Source 1}⁠^{[2]Source 2}

Reasonable cause is a statutory exception for non-willful violations, available when the account balance is properly reported. An explanation needs credible facts showing appropriate care. Saying you didn't know, or that you used a filing app, isn't enough on its own.⁠^{[2]Source 2}⁠^{[5]Source 5}

For multiple years, the late FBAR guide explains first-time delinquent filing while the amendment guide covers reports already filed.⁠^{[1]Source 1}⁠^{[2]Source 2}

Willfulness covers more than deliberately hiding an account. Under IRS guidance, a violation is willful if the person knowingly violated the duty, acted with reckless disregard of the reporting requirement, or deliberately avoided learning about it (willful blindness). Examiners look at the facts, including warnings, forms previously signed, advice received, and steps taken to conceal or correct accounts. No single fact makes conduct willful.⁠^{[2]Source 2}

Examples that call for professional advice include keeping an account undisclosed after an adviser's clear warning, making false statements about foreign accounts, or deliberately hiding an interest. A high account balance doesn't on its own show willfulness.⁠^{[2]Source 2}

Filing a missing FBAR or correcting a wrong one promptly helps, but doesn't guarantee there will be no penalty. For a missing FBAR, IRS examination guidance says no penalty is asserted for an account when the failure was not willful, was due to reasonable cause and the account is properly reported on the late FBAR. For a filed FBAR with errors, submit a complete amended report. If foreign income was also left off your tax returns, the late FBAR guide explains the IRS compliance procedures.⁠^{[1]Source 1}⁠^{[2]Source 2}⁠^{[3]Source 3}

Where examiners find a violation, they either issue a warning letter (Letter 3800) or determine a penalty. If the IRS has contacted you, an examination is under way or criminal exposure is possible, get independent U.S. tax counsel before choosing a correction route.⁠^{[1]Source 1}⁠^{[2]Source 2}