The delinquent FBAR submission procedures is an IRS procedure that allows U.S. taxpayers to file overdue Foreign Bank Account Reports (FBARs) while potentially avoiding or reducing severe penalties. The IRS offers several options for taxpayers who’ve missed the annual October 15th extended FBAR filing deadline, including the Delinquent FBAR Submission Procedures program, Streamlined Filing Compliance Procedures, and Voluntary Disclosure programs. Understanding these remediation options becomes important when you’re facing penalties up to $10,000 per year for non-willful violations or the greater of 50 percent or $100,000 per account per year for willful violations (penalty amounts are adjusted annually for inflation).

What You Need to Know About FBAR Compliance

By statute, for taxpayers with multiple years of FBAR compliance failures, FBAR penalties can exceed the total value of their accounts —either a $10,000 annual penalty for non-willful violations, up to the greater of 50 percent of the account balance or $100,000 per account per year for willful violations (both adjusted annually for inflation).
Delinquent FBAR Submission Procedures provide penalty relief, but only for eligible taxpayers. Selecting the appropriate remediation process is critical (Delinquent FBAR Submission Procedures, Streamlined Filing COmpliance Procedures, or Voluntary Disclosure).
Avoid filing late FBARs reactively without a strategy — the wrong approach can trigger unwanted or avoidable penalties instead of relief.
To qualify for the late filing procedure, you must meet certain specific eligibility criteria.
Professional guidance is often essential when deciding which program fits your situation and avoids unnecessary risk.

What Are Delinquent FBAR Submission Procedures?

Delinquent FBAR submission procedures is a formal IRS procedure that enables taxpayers to file late Foreign Bank Account Reports while potentially qualifying for penalty relief if eligibility requirements are met. This procedure provides an organized path to achieve compliance when you’ve failed to timely meet FBAR filing deadlines. The procedure encourages voluntary compliance by offering more favorable treatment than the harsh penalties typically imposed through traditional IRS enforcement actions.

Understanding FBAR Filing Requirements and Critical Deadlines

You must file an FBAR if you’re a U.S. person with a financial interest in or signatory authority over foreign financial accounts exceeding $10,000 in aggregate value at any point during the calendar year. This threshold applies to the combined total of all your foreign accounts, not individual account balances.

The requirement covers various account types, including:

Checking accounts
Savings accounts
Investment accounts
Certain other financial accounts held outside the United States

If you are uncertain whether certain foreign financial assets are required to be reported on an FBAR, reach out to a qualified professional. Often overlooked foreign financial accounts include certain foreign retirement accounts, as well as foreign life insurance accounts.

You’re may be subject to FBAR filing obligations if you fall into any of these categories:

U.S. citizen
U.S. resident
Entity created or organized in the United States
Trust with U.S. beneficiaries

These broad categories capture many individuals and entities with connections to the United States. The filing obligation exists regardless of whether you owe any U.S. taxes on the foreign accounts.

The annual FBAR filing deadline falls on April 15th, with an automatic extension available until October 15th of the same year (this should be confirmed annually). Unlike tax returns that offer paper filing options, FBARs must generally be filed electronically through the Financial Crimes Enforcement Network (FinCEN) using Form 114. This filing requirement operates separately from your federal income tax obligations, creating a distinct compliance burden that many taxpayers often overlook.

Severe Penalties for Late or Missing FBAR Filings

FBAR penalties can severely impact your financial situation if you are determined to be out of compliance. Non-willful violations carry penalties of $10,000 per year, while willful violations can result in penalties up to $100,000 per account per year or 50% of the account balance—whichever amount is greater. These amounts are adjusted annually for inflation. The IRS can assess these penalties for each year of non-compliance, and in the willful penalty context, for each unreported account, causing penalty amounts to rapidly multiply, possibly exceeding the account balance altogether.

Beyond monetary penalties, willful FBAR violations can trigger criminal charges, including fines up to $250,000 and imprisonment up to five years. The IRS determines willfulness based on factors such as your education level, sophistication, prior experience with reporting requirements, and any efforts to conceal accounts.

Even non-willful penalties can quickly accumulate to amounts exceeding the total value of your unreported accounts. For example, if you have one foreign account with a $15,000 highest balance consistently among the open FBAR statute years (generally six years), that may result in a statutory penalty of $60,000 ($10,000 per year for six years). The penalty amount is further increased due to annual inflation adjustments. This penalty structure makes prompt and strategic remediation through appropriate compliance procedures and programs necessary for protecting your financial well-being.

Available Options for Delinquent FBAR Submissions

You have several compliance options when addressing delinquent FBARs, each with different eligibility requirements and penalty structures. The primary pathways include the Delinquent FBAR Submission Procedures, Streamlined Filing Compliance Procedures (both domestic and offshore versions), and the Voluntary Disclosure Practice.

Your choice between these options depends on various factors such as a determination of willfulness related to your non-compliance, your tax filing and income tax reporting history, and the complexity of your international financial situation. The Delinquent FBAR Submission Procedures is geared towards taxpayers who are current and compliant with their tax filings but simply failed to file required FBARs. The Streamlined procedures accommodate situations involving both delinquent FBARs and unreported foreign income, while the Voluntary Disclosure Practice addresses cases involving willful non-compliance or potential criminal exposure.

The Delinquent FBAR Submission Procedures

The Delinquent FBAR Submission Procedures offers favorable treatment for eligible taxpayers who have only failed to file FBARs while remaining current on income tax obligations. Under this procedure, you can file delinquent FBARs for up to six years without facing penalties, provided you meet specific eligibility criteria and the IRS hasn’t initiated contact regarding your FBAR obligations.

To qualify, you must meet all of these requirements:

Be current on your income tax filings
Have properly reported all income from foreign accounts on your tax returns
Not be under IRS examination or criminal investigation
Not have been previously contacted by the IRS about delinquent FBARs
Provide a statement explaining the reasons for your non-compliance

Meeting each criterion is necessary for eligibility, as failing any single requirement may disqualify you from penalty relief.

This procedure provides that the IRS will not impose a penalty for the failure to file FBARs for eligible taxpayers who made honest mistakes or were unaware of their FBAR obligations, recognizing that the reporting requirement isn’t widely understood among taxpayers with foreign accounts. The key advantage lies in achieving full compliance with minimal administrative burden.

Streamlined Filing Compliance Procedures Alternative

The Streamlined Filing Compliance Procedures provide relief for taxpayers who have both delinquent FBARs and unreported foreign income, but whose non-compliance was non-willful. This procedure offers separate tracks for U.S. residents (Streamlined Domestic Offshore Procedures) and non-residents (Streamlined Foreign Offshore Procedures), with different penalty structures and requirements.

Under the streamlined domestic procedures, you must pay a penalty equal to 5% of the highest aggregate year-end balance of unreported foreign assets during the covered period in lieu of the significant possible information reporting penalties. Under the domestic procedures, taxpayers are not able to file delinquent income tax returns, only amended income tax returns are accepted. The streamlined foreign procedures carry no penalty for eligible non-resident taxpayers, and allows for the filing of delinquent income tax returns, unlike the domestic procedures. Both versions require filing three years of amended tax returns, six years of delinquent FBARs, and a certification of non-willful conduct.

The streamlined procedures offer substantial penalty relief compared to traditional IRS enforcement actions but require more extensive compliance efforts than the Delinquent FBAR Submission Procedures procedure. You’ll need to calculate unreported income, file amended returns, and navigate more complex documentation requirements. However, the penalty relief can be substantial when compared to the potential exposure from full FBAR and other information reporting penalties.

Voluntary Disclosure Program for Serious Cases

The Voluntary Disclosure Practice is available to taxpayers who cannot qualify for other programs due to willful non-compliance or potential criminal exposure. This program requires full disclosure of all unreported income and payment of all taxes, interest, and penalties, but provides the most, though not absolute, protection from criminal prosecution when properly executed.

Voluntary disclosure cases typically involve sophisticated taxpayers who deliberately concealed foreign accounts or income, used offshore structures to evade taxes, or engaged in other willful conduct. The program requires extensive documentation and communications with IRS Criminal Investigations. Taxpayers utilizing this process should proceed carefully under the guidance of professional representation.

While penalties remain substantial under voluntary disclosure, the program limits criminal consequences and the associated penalties may be less than those imposed through traditional enforcement. This option becomes necessary when you’ve engaged in conduct that could trigger criminal liability, making the trade-off of financial penalties for criminal protection worthwhile.

Step-by-Step Process for Filing Delinquent FBARs

The process for filing delinquent FBARs generally involves:

Gather account documentation to confirm the highest balances per account.
Convert the balances using the appropriate conversion rate per the FBAR instructions.
To the extent you are unsure whether a foreign asset is considered an account for FBAR purposes, contact a tax professional for advice.
Complete required forms (Form 114 for each delinquent year).
Prepare a statement explaining why the FBARs are being filed late.
Submit the FBARs electronically through FinCEN’s BSA E-Filing system.

For the Delinquent FBAR Submission Procedures, you must file FBARs electronically through the FinCEN website and include a statement explaining the reason for the late filing as part of the electronic submission. This statement must include specific language acknowledging the delinquent filings, and explaining the reasons for your non-compliance. If you are uncertain regarding your willfulness or non-willfulness status as it relates to FBAR non-compliance, reach out to a qualified tax professional for assistance. You should maintain copies of all submissions and delivery confirmations for your records.

The FBAR requires detailed information about each foreign account, including maximum balances, account numbers, and financial institution details. Accuracy is important, as errors can trigger IRS inquiries and potentially disqualify you from penalty relief programs.

Documentation Required for Delinquent FBAR Submissions

Successful delinquent FBAR submissions require comprehensive documentation of your foreign financial accounts and compliance history. Gathering the right documentation from the start can prevent delays and additional IRS inquiries.

Required documents you’ll need include:

Foreign bank statements showing account balances and activity throughout each relevant year
Account opening and closing documentation
Powers of attorney or signatory agreements
Copies of previously filed tax returns demonstrating proper income reporting
Explanatory statements detailing the circumstances that led to your non-compliance
Evidence supporting claims of non-willful conduct
Documentation of any professional advice you received regarding FBAR obligations

This documentation might also include correspondence with tax preparers, evidence of your attempts to understand filing requirements, or records showing you relied on professional advice that proved incorrect. Having comprehensive supporting materials strengthens your position and demonstrates good-faith compliance efforts should the IRS examine your submission. Maintaining organized records becomes important for responding to potential IRS inquiries and expedites resolution.

When to Consider Professional Legal Assistance

Given the complexity of FBAR compliance programs and the severity of potential penalties, most taxpayers benefit from professional legal assistance when addressing delinquent FBARs. Engaging an international tax attorney that can evaluate your eligibility for different programs, prepare required submissions, and provide representation in communications with the IRS, provides value and can help ensure you choose the proper compliance path and avoid costly mistakes in the remediation process.

Professional assistance becomes particularly important if you have substantial foreign assets, complex international structures, or potential willfulness issues. Hiring an international tax lawyer will help ensure you receive proper guidance on complex cross-border reporting requirements. The stakes are too high to risk mistakes that could disqualify you from penalty relief programs or trigger enhanced IRS scrutiny.

Legal representation becomes even more important when you face IRS examination, criminal investigation, or situations involving potential willful conduct. Attorneys provide Attorney-Client privilege for sensitive communications and negotiate with the IRS to achieve optimal outcomes. The cost involved with professional assistance typically represents a fraction of the potential penalties for improper handling of delinquent FBAR compliance, making it a prudent investment in protecting your financial future.

The complexity of international tax compliance continues to increase, and the IRS has intensified enforcement efforts around FBAR obligations. Taking advantage of available compliance programs and procedures while they remain accessible affords you with the best opportunity for achieving compliance while minimizing financial exposure and legal risk.

Facing a Tax Problem? We’re Here to Help.

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Delinquent FBAR Submission Procedures [Complete Guide]