How to Transfer Money From an Offshore Account: FBAR and Taxes

To transfer money from an offshore account to a U.S. bank, you send an international wire using the receiving bank’s SWIFT code and your U.S. account number, and separately handle the federal reporting that attaches to holding a foreign account in the first place. The wire is routine. The paperwork around it is where U.S. persons get into trouble, because the FBAR and Form 8938 obligations apply to the account itself, not to the transfer, and moving the money home does not erase a year in which the account existed.

What the Offshore Bank Needs to Send the Wire

Before you contact the offshore bank, gather the details for both ends of the transaction. Every international wire needs a SWIFT code, also called a Business Identifier Code or BIC, for the receiving bank. It is the bank’s global address and lets payment networks route funds to the right institution.¹

Then you need an account identifier for the recipient. Most countries use an International Bank Account Number (IBAN), which bundles a country code, check digits, and the domestic account number into one standardized string.² U.S. banks don’t use IBANs. Your offshore bank will instead need the receiving bank’s ABA routing number and your domestic account number. Confirm the exact format the offshore institution expects before you submit anything.

If the sending and receiving banks don’t have a direct relationship, an intermediary or correspondent bank bridges the gap. The offshore bank can tell you whether one is required and provide its SWIFT code and account details. Skipping this is a common reason wires get delayed or bounced back.

The wire authorization form will ask for your full legal name, address, the account to debit, the amount, and the currency. Your name and address must match the records at the receiving U.S. bank exactly. Even a small discrepancy can freeze the funds during compliance screening.

How the Wire Moves and How Long It Takes

Once the offshore bank verifies your identity and processes the instruction, the funds move through one of the major global payment networks. The two primary systems for U.S.-bound transfers are the Clearing House Interbank Payments System (CHIPS) and the Federal Reserve’s Fedwire Funds Service.³ Fedwire settles in real time; CHIPS batches and nets payments through the day. Add a day or two if a correspondent bank sits in the middle.

A typical international wire completes within three to five business days. Ask the sending bank for a Federal Reference Number or SWIFT tracking reference so you can monitor progress. If the funds haven’t arrived within five business days, contact the receiving U.S. bank with that reference. Delays usually trace back to compliance screening at the correspondent bank or a data mismatch that flagged the payment for manual review.

Fees and Exchange Rate Costs

International wires carry several layers of fees. The sending bank charges an outgoing wire fee, and the receiving U.S. bank often charges an incoming wire fee. A correspondent bank in the middle may deduct a lifting fee from the amount in transit, so the recipient can see noticeably less than you sent. Some banks offer an option to prepay all fees so the full amount arrives intact, though that option itself costs extra.

Currency conversion adds another variable. If your offshore account holds funds in a foreign currency, the bank converts them at its own exchange rate, which typically includes a markup over the interbank rate. On a large transfer, even a small spread can cost hundreds or thousands of dollars. Compare the bank’s quoted rate against the mid-market rate to see what the conversion is really costing you. Converting inside the offshore account before initiating the wire, or using a foreign exchange broker, can produce a better rate.

Is the Transfer Itself Taxable?

Moving your own money between your own accounts is not a taxable event. You do not owe income tax simply for bringing funds into the United States. What is taxable is the income the account earned. Interest, dividends, and capital gains from foreign investments count as taxable income in the year you earn them, whether or not you ever repatriate the money. The IRS does not wait for you to bring the funds home.

Income earned in a foreign currency is converted to U.S. dollars at the exchange rate on the date you received the income, not the date of the transfer. Foreign taxes you paid on that income may qualify for a credit against your U.S. tax liability through IRS Form 1116, which prevents double taxation in many cases.

If you transfer money to someone else’s account rather than your own, the transfer can be a gift. For 2026, the annual gift tax exclusion is $19,000 per recipient, and transfers above that amount require reporting on a gift tax return.⁴

FBAR: Report of Foreign Bank and Financial Accounts

If the combined value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year, you must file a Report of Foreign Bank and Financial Accounts. The requirement applies to any U.S. person with a financial interest in, or signature authority over, a foreign bank or securities account.⁵

You file FinCEN Form 114 electronically through the BSA E-Filing System. The deadline is April 15, with an automatic extension to October 15 if you miss the spring date.

A detail that catches people off guard: transferring all your offshore money to a domestic account does not eliminate the FBAR obligation for that year. If the account held more than $10,000 at any point, you still owe the report, even if the account is now closed and empty. The form asks for the highest balance during the reporting period, not the year-end balance.⁵

FATCA: IRS Form 8938

The Foreign Account Tax Compliance Act adds a separate disclosure layer under 26 U.S.C. § 6038D. If you hold specified foreign financial assets above the thresholds, you must report them on IRS Form 8938 and attach it to your annual tax return.⁶

The thresholds depend on your filing status and where you live:

Single filer in the U.S.: assets worth more than $50,000 on the last day of the tax year, or more than $75,000 at any point during the year.
Married filing jointly in the U.S.: more than $100,000 on the last day, or more than $150,000 at any point.
Taxpayers living abroad: significantly higher thresholds apply ($200,000/$300,000 for single filers, $400,000/$600,000 for joint filers).

Form 8938 covers more ground than the FBAR. While the FBAR focuses on bank and securities accounts, Form 8938 also captures foreign stocks, bonds, financial instruments, and interests in foreign entities held outside a financial institution.⁶ You may need to file both forms for the same account in the same year. They go to different agencies and one does not substitute for the other.

Reports That Do Not Apply to a Wire

Two other reporting rules come up in conversations about offshore transfers, and both are widely misunderstood. Neither applies to a standard wire.

A Currency Transaction Report (CTR) is filed by a bank when a customer conducts a cash transaction over $10,000 in a single day. Cash means physical currency and coin.⁷ A wire transfer is not a cash transaction, so moving money by wire does not trigger a CTR. Withdrawing more than $10,000 in cash from the receiving U.S. account later would.

FinCEN Form 105 applies when someone physically carries, mails, or ships currency or monetary instruments worth more than $10,000 across the U.S. border. The form itself states that “a transfer of funds through normal banking procedures, which does not involve the physical transportation of currency or monetary instruments, is not required to be reported.”⁸ A wire skips it entirely. Flying home with cash or traveler’s checks would require filing Form 105 with U.S. Customs and Border Protection at the time of entry.⁹

Suspicious Activity and Structuring

Banks independently monitor transactions for suspicious patterns. Under federal regulations, a bank must file a Suspicious Activity Report when a transaction involving $5,000 or more raises red flags, such as having no apparent business purpose or appearing designed to evade reporting requirements.¹⁰ You will not be notified if a SAR is filed about your transfer.

The way to avoid triggering one is straightforward: transfer in round, logical amounts, keep records of the legitimate source of funds, and don’t split a large transfer into smaller pieces to stay under thresholds. Structuring transactions to evade reporting is itself a federal crime.

Penalties for Failing to Report

The penalty structure for foreign account non-reporting is aggressive enough to dwarf the cost of any wire.

FBAR

Non-willful FBAR violations carry a penalty of up to $16,536 per annual report. Following the Supreme Court’s 2023 decision in Bittner v. United States, the penalty applies per report rather than per account, which reduced exposure for people with multiple accounts. Willful violations are far worse: the penalty is the greater of $165,353 or 50% of the account balance at the time of the violation. Criminal penalties, including imprisonment, are possible for willful failures. These amounts are adjusted for inflation annually.

Form 8938

Failing to file a complete Form 8938 by its due date triggers a $10,000 penalty. If the IRS sends you a notice and you still don’t file within 90 days, an additional $10,000 accrues for every 30-day period of continued non-compliance, up to a $50,000 maximum.¹¹ On top of that, the IRS can impose a 40% accuracy-related penalty on any underpayment of tax attributable to undisclosed foreign assets.

Voluntary Disclosure

If you have foreign accounts you should have been reporting in prior years, the IRS offers programs to come into compliance with reduced penalties. The Streamlined Filing Compliance Procedures are available to taxpayers whose failure was non-willful. Coming forward voluntarily almost always produces a better outcome than waiting for the IRS to find the accounts through FATCA’s automatic information exchange with foreign banks.

1
Swift. Business Identifier Code (BIC)
2
Swift. International Bank Account Number (IBAN)
3
Federal Reserve. A Summary of the Roundtable Discussion on the Role of Wire Transfers in Making Low-Value Payments
4
Internal Revenue Service. Frequently Asked Questions on Gift Taxes for Nonresidents Not Citizens of the United States
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eCFR. 31 CFR 1010.350 – Reports of Foreign Financial Accounts
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Office of the Law Revision Counsel. 26 USC 6038D – Information With Respect to Foreign Financial Assets
7
Financial Crimes Enforcement Network. Notice to Customers – A CTR Reference Guide
8
Financial Crimes Enforcement Network (FinCEN). FinCEN Form 105
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U.S. Customs and Border Protection. Money and Other Monetary Instruments
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eCFR. 12 CFR 208.62 – Suspicious Activity Reports
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Internal Revenue Service. International Information Reporting Penalties