FBAR Foreign Bank Account Report: Thresholds, Filing, and Penalties

If you’re a U.S. person and your foreign financial accounts together held more than $10,000 at any point during the year, you have to file an FBAR — the Report of Foreign Bank and Financial Accounts, submitted on FinCEN Form 114. It goes to the Financial Crimes Enforcement Network, not the IRS, and it’s filed electronically through the BSA E-Filing System. The deadline is April 15, with an automatic extension to October 15 that you don’t have to request.¹ You may owe no additional tax and still be required to file. Missing it can cost $10,000 for an honest mistake and much more if the government thinks you knew better.

Who Has to File

The rule applies to every “United States person” with a financial interest in, or signature authority over, at least one foreign financial account when the combined value of those accounts exceeds $10,000 at any time during the calendar year. That category is broader than most people assume. It covers U.S. citizens, green card holders, and residents who meet the substantial presence test. It also covers corporations, partnerships, LLCs, trusts, and estates formed under U.S. federal or state law.²

You don’t need to own the money to trigger the filing. Being the owner of record or holding legal title is a “financial interest.” Having the power to direct the foreign institution to move funds is “signature authority,” and that alone can require you to file — even over accounts belonging to your employer. An employee or officer with signature authority over a company’s foreign accounts generally files their own FBAR, though the employer keeps the underlying records.³

How the $10,000 Threshold Works

The threshold is aggregate. You take the highest balance each account reached during the year, add them together, and if that total ever crossed $10,000, every account has to be reported — even the small ones.⁴ Three accounts at $4,000 each puts you over. Balances are converted to U.S. dollars using the Treasury Reporting Rates of Exchange for the last day of the calendar year; if no Treasury rate exists for a currency, another verifiable source is acceptable, but keep documentation.⁵

Which Accounts Count

Reportable accounts include checking and savings accounts at foreign banks, brokerage accounts, mutual funds, and foreign-issued life insurance or annuity contracts with a cash surrender value.³ A foreign branch of a U.S. bank counts as a foreign account.⁶

Foreign Retirement Accounts

U.S. retirement plans like IRAs and 401(k)s are exempt. Foreign retirement plans are not. A Canadian RRSP, a Mexican AFORE, a UK pension — all are normally reportable and count toward the $10,000 aggregate.⁷ Anyone who spent a few years working abroad and left behind a modest pension often doesn’t realize it needs to be reported.

Cryptocurrency

FinCEN has stated that current FBAR regulations do not treat an account holding only virtual currency as a reportable account. Crypto held exclusively on a foreign exchange is not reportable at this time, unless that account also holds cash or securities. FinCEN has said it intends to propose a rule change bringing virtual currency accounts within FBAR reporting, but that rule has not been finalized.⁸

Filing FinCEN Form 114

Form 114 is filed only electronically, through the BSA E-Filing System. You can complete it in the browser or fill out a PDF version and upload it. You sign electronically, and after submission you’ll get an on-screen acknowledgment and an email with a unique BSA Identifier — hang on to both.

For each account, you’ll need:

The name and address of the foreign financial institution.
The account number and whether it’s held individually or jointly.
The maximum value the account reached during the year, in U.S. dollars.
Your Social Security Number or Employer Identification Number.

Keep your records for five years from April 15 of the year following the calendar year reported.⁹

If Your Spouse Owns Accounts With You

A spouse can skip filing separately only if all three of these are true: every account the non-filing spouse would report is jointly owned with the filing spouse; the filing spouse timely files an FBAR with an electronic signature covering those accounts; and both spouses sign and retain Form 114a, the authorization to file jointly. If any condition fails, both spouses file, and each reports the full value of the joint accounts. A spouse who is not a U.S. person has no FBAR obligation, but the U.S.-person spouse still reports the joint accounts on their own filing.¹⁰

Having a Preparer File for You

If a tax preparer or another third party files on your behalf, both of you complete FinCEN Form 114a. You keep signed copies for five years; you do not send Form 114a to FinCEN.¹¹

What It Costs to Skip Filing

Penalties split into three tiers, and intent drives everything.

Non-Willful

The base statutory penalty for a non-willful violation is up to $10,000 per report.¹² The Supreme Court held in Bittner v. United States (2023) that the cap is per report, not per account: ten unreported accounts on a single year’s FBAR are subject to one $10,000 maximum for that year, not ten.¹³ The statutory amounts are subject to annual inflation adjustments. A reasonable cause exception applies if you also properly reported the account balances.

Willful

Willful violations are penalized per account. The civil penalty rises to the greater of $100,000 (inflation-adjusted) or 50% of the account balance at the time of the violation, for each unreported account.¹² Reasonable cause is not a defense to willful conduct.⁷

Criminal

Willful FBAR violations can also be charged criminally under the Bank Secrecy Act. A conviction carries up to $250,000 in fines, up to five years in prison, or both. When the violation is part of a pattern of illegal activity involving more than $100,000 in a 12-month period, the ceilings rise to $500,000 and ten years.¹⁴

FBAR Is Not the Same as Form 8938

People routinely mix these up. Form 8938, created under the Foreign Account Tax Compliance Act, is a separate obligation filed with the IRS as part of your income tax return. The FBAR goes to FinCEN.⁶ The two forms have different thresholds, and Form 8938’s are substantially higher and vary by filing status and whether you live in the U.S. or abroad.¹⁵ Form 8938 also reaches assets the FBAR doesn’t, including foreign stock or securities not held in an account and interests in foreign partnerships, hedge funds, or private equity funds. Filing one does not satisfy the other. If you cross both thresholds, you file both.

If You’ve Missed Past Years

Doing nothing is the worst option. Two paths exist, and which one fits depends on whether you also underreported income.

Delinquent FBAR Submission Procedures

This is the cleaner path when you reported and paid tax on your foreign income but simply didn’t file the FBAR. You must not have been contacted by the IRS about the missing filings and not be under civil examination or criminal investigation. You file the late FBARs through the BSA E-Filing System and select a reason for the late filing on the cover page. The IRS will not impose a penalty if you properly reported all income from the foreign accounts and paid the tax owed.¹⁶

Streamlined Filing Compliance Procedures

If unreported income is also involved, the Streamlined procedures may fit. They require you to certify that your failure to report was non-willful — negligence, inadvertence, mistake, or good-faith misunderstanding of the law. You’re ineligible if the IRS has opened a civil examination for any year, if you’re under criminal investigation, or if you’ve previously submitted a voluntary disclosure letter. The procedures are open to both U.S. residents and Americans abroad, with different penalty structures for each group.¹⁷

Both routes close the moment the IRS contacts you. Acting on your own is almost always cheaper than waiting to be found.

1
Financial Crimes Enforcement Network. Due Date for FBARs
2
eCFR. 31 CFR 1010.350 – Reports of Foreign Financial Accounts
3
Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
4
Financial Crimes Enforcement Network. Report Foreign Bank and Financial Accounts
5
Financial Crimes Enforcement Network. Reporting Maximum Account Value
6
Internal Revenue Service. Comparison of Form 8938 and FBAR Requirements
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Internal Revenue Service. Internal Revenue Manual 4.26.16 – Report of Foreign Bank and Financial Accounts (FBAR)
8
Financial Crimes Enforcement Network. Filing Requirement for Virtual Currency
9
Financial Crimes Enforcement Network. Record Keeping
10
Financial Crimes Enforcement Network. Filing for Spouse
11
Financial Crimes Enforcement Network. Record of Authorization to Electronically File FBARs (Form 114a)
12
Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties
13
Supreme Court of the United States. Bittner v. United States, 598 U.S. 85 (2023)
14
Office of the Law Revision Counsel. 31 USC 5322 – Criminal Penalties
15
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets?
16
Internal Revenue Service. Delinquent FBAR Submission Procedures
17
Internal Revenue Service. Streamlined Filing Compliance Procedures