Who Has to File an FBAR
The FBAR (Report of Foreign Bank and Financial Accounts) is required from any U.S. person who has a financial interest in, or signature authority over, one or more foreign financial accounts whose aggregate value exceeded $10,000 at any time during the calendar year.
"U.S. person" includes:
- U.S. citizens, regardless of where they live
- U.S. residents (green card holders, substantial presence test)
- Domestic corporations, partnerships, LLCs, trusts, and estates
The $10,000 test is a single trigger. If you held three accounts that each peaked at $4,000 in different months, the total can still exceed $10,000 on one day, which is enough to require filing.
What Counts as a Foreign Financial Account
ReferenceReportable accounts include:
- Bank accounts (checking, savings, time deposits)
- Securities and brokerage accounts
- Mutual funds and other pooled funds
- Cash-value life insurance and annuities held abroad
- Foreign retirement accounts in many cases (UK SIPPs, Canadian RRSPs, Australian superannuation)
- Accounts held in your name OR over which you have signature authority
Crypto held in a foreign exchange is currently outside FBAR scope, but FinCEN has signaled that may change. Watch for new rules.
Deadlines and How to File
The FBAR is not filed with your tax return. It goes to the Treasury Department through the BSA E-Filing System at bsaefiling.fincen.treas.gov.
- Original due date: April 15 (matches the 1040 deadline)
- Automatic extension: October 15 (no form to request, the extension is automatic for everyone)
- Filing method: Electronic only through BSA E-Filing
- Joint filers: Spouses can file a joint FBAR only if all reportable accounts are jointly owned. Otherwise, each spouse files separately.
If you missed the April 15 deadline this year, the October 15 automatic extension still applies. There is no late penalty if you file by October 15.
FBAR vs Form 8938: Two Different Forms
Many taxpayers assume the FBAR and Form 8938 (FATCA reporting) are interchangeable. They are not. The same account often must be reported on both forms.
The simplest mental model: FBAR has the lower threshold and broader scope, so it captures more filers. Form 8938 starts later but adds penalties to your income tax return when omitted.
Penalties: Why FBAR Compliance Matters
FBAR penalties are some of the steepest in the tax code. The amounts depend on whether the failure to file was non-willful or willful.
FBAR Penalty Structure
CautionNon-willful violation: Up to $10,000 per violation (inflation-adjusted, currently around $16,000). The Supreme Court ruled in Bittner v. United States (2023) that this cap applies per FBAR form, not per account. So if you missed three years of FBARs covering twenty accounts, you face three penalties, not sixty.
Willful violation: The greater of $100,000 (inflation-adjusted, now over $160,000) or 50% of the highest balance in the unreported account at the time of the violation. This penalty stacks per account, not per form.
Criminal penalties: In severe cases, up to $250,000 in fines and up to 5 years in prison, or up to $500,000 and 10 years if combined with other tax offenses.
The IRS bears the burden of proving willfulness, but courts have found "reckless disregard" sufficient. Continuing to ignore disclosure questions on Schedule B after years of foreign banking is a common path to a willfulness finding.
Common Filing Mistakes
Treating Each Account Separately
The $10,000 threshold is aggregate. Five accounts that each held $3,000 still trigger a filing requirement when their combined peak exceeds $10,000. The test is the maximum value at any single point during the year, not the year-end balance.
Forgetting Signature Authority
If you can sign on a foreign account belonging to your employer, your parents, or a foreign business you help operate, that account is reportable. Signature-only accounts are reportable for FBAR even though they are not reportable for Form 8938.
Skipping Schedule B Question 7a
Schedule B of Form 1040 asks whether you had a foreign account. Answering No when you did, and later filing an FBAR, is one of the strongest indicators of willfulness. Always answer this question accurately on the tax return that corresponds to the FBAR year.
How to Catch Up If You Missed FBARs
If you have unfiled FBARs from prior years, do not simply file them quietly. The IRS offers structured programs that can dramatically reduce penalties when used correctly.
| Program | Best For | Outcome |
|---|---|---|
| Delinquent FBAR Submission Procedures | Non-willful, no unreported income | Penalty waiver if you file the missed FBARs and explain the reason |
| Streamlined Domestic Offshore Procedures | Non-willful, U.S. residents with unreported foreign income | 5% penalty on the highest aggregate account balance |
| Streamlined Foreign Offshore Procedures | Non-willful, U.S. citizens living abroad | Often no penalty if eligible |
| Voluntary Disclosure Practice | Willful conduct, possible criminal exposure | Criminal protection in exchange for civil penalties and full disclosure |
Choosing the right program is fact-specific. Filing under Streamlined when the conduct was actually willful can be worse than not filing at all. Get professional advice before you decide.
Bottom Line
If you have any meaningful foreign banking activity, the FBAR is probably not optional. The $10,000 threshold is low, the automatic October 15 extension makes timing forgiving, and the penalties for ignoring it are severe.
Contact TS CPA if you have foreign accounts and want to confirm whether you need to file, or if you have unfiled FBARs from prior years and need help choosing the right disclosure program.