What Is FBAR? Thresholds, Filing, and Penalties

The Report of Foreign Bank and Financial Accounts, known as the FBAR, is a yearly disclosure any U.S. person must file with the Treasury Department if the combined value of their foreign financial accounts exceeded $10,000 at any point during the calendar year.¹ You file it electronically as FinCEN Form 114, and the deadline is April 15 with an automatic extension to October 15. The FBAR filing requirements and penalties are set out below: who must file, what to report, how to submit, and what missing the report can cost you.

Who Has to File

The FBAR applies to every “United States person.” That includes U.S. citizens, resident aliens, and domestic entities such as corporations, partnerships, LLCs, trusts, and estates formed under U.S. law.² You must file if two things are true: you have a financial interest in or signatory authority over at least one foreign financial account, and the combined value of all your foreign accounts topped $10,000 at any time during the year.¹

A financial interest means you’re the owner of record or hold legal title, even if the account is maintained for someone else’s benefit. When more than one U.S. person is on the account, each has a separate filing obligation.²

Signatory Authority Without Ownership

You also have to file if you have signatory authority, meaning you can direct the movement of money in a foreign account by communicating directly with the institution, even if none of the money is yours. This commonly catches employees who manage an employer’s overseas accounts and individuals holding power of attorney over a relative’s account. Certain employees of federally examined banks, SEC- or CFTC-regulated firms, and publicly listed companies are excused from reporting employer accounts they sign on but don’t personally own.²

Children

A child who meets the threshold has their own FBAR obligation. When the child is too young to file, a parent or guardian files on the child’s behalf, signs electronically, and enters “Parent/Guardian filing for child” in the filer title field.³

The $10,000 Threshold

The threshold is not per account. You take the highest balance each foreign account reached during the year, add those peaks together, and file if the total exceeded $10,000 at any point. A reasonable approximation of each peak is acceptable. Three accounts that each peaked at $4,000 total $12,000, so all three go on the FBAR, including the small ones. Balances in foreign currency are converted to U.S. dollars using the Treasury Financial Management Service exchange rate on the last day of the calendar year.⁴

Which Accounts Count

Any financial account physically located outside the United States counts. That includes:

Checking and savings accounts at foreign banks
Brokerage, securities, and commodity futures accounts
Foreign mutual funds and similar pooled investments
Foreign life insurance policies and annuity contracts with a cash surrender value

An account at a foreign branch of a U.S. bank is reportable; foreign real estate held directly is not.⁵

Virtual Currency

Under FinCEN Notice 2020-2, a foreign account that holds only virtual currency is not reportable on the FBAR. If the account also holds traditional financial assets, it is reportable. FinCEN has said it plans to propose a rule change bringing virtual currency accounts into the FBAR framework, but no final rule has been issued.⁶

Accounts You Don’t Report

Some categories are carved out entirely:

Accounts belonging to federal, state, tribal, or local government agencies
Accounts at international financial institutions of which the U.S. is a member
Accounts at U.S. military banking facilities serving installations abroad
Correspondent or nostro (bank-to-bank settlement) accounts
Foreign accounts held by or on behalf of a qualifying retirement plan under Internal Revenue Code sections 401(a), 403(a), 403(b), or an IRA under section 408 or Roth IRA under 408A

Participants and beneficiaries of those retirement plans don’t separately report the foreign holdings within the plan.¹

How and When to File

For each foreign account, you’ll need the peak balance during the year, the account number, the name of the foreign institution, its physical address, and whether the account is held individually, jointly, or through signatory authority.⁴

Filing happens through the BSA E-Filing System on FinCEN’s website. There are two options: a downloadable PDF you can complete offline, or an online form you fill out in a single session.⁷ Individuals can e-file without registering for a BSA account.⁸ There is no paper filing. On successful upload, the system generates a confirmation with a tracking ID; save both the submitted form and the confirmation.

The FBAR is due April 15. If you miss it, an automatic extension moves the deadline to October 15, with no request or form required.⁹ When April 15 falls on a weekend or holiday, the deadline moves to the next business day.¹

Filing Jointly With a Spouse

A spouse can skip filing a separate FBAR only if three conditions are all met: 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 complete and retain FinCEN Form 114a, Record of Authorization to Electronically File FBARs.¹⁰ Form 114a stays in your records; you do not submit it. If any condition fails, both spouses file separately, and each reports the full value of every jointly owned account.

Keeping Records

You must keep records of your foreign accounts for five years from the FBAR due date.¹¹ Keep bank statements, account records, and the documents you used to calculate the maximum values reported. These need to be available if the IRS or FinCEN asks during an examination.

Penalties for Not Filing

Penalty amounts turn on whether the violation was accidental or willful, and the statutory dollar figures are adjusted upward for inflation each year.¹

Non-Willful Violations

A non-willful violation is one caused by negligence, carelessness, or honest mistake. The statutory maximum civil penalty is $10,000 per violation, which adjusts to roughly $16,536 for 2026 after inflation.¹² The Supreme Court held in Bittner v. United States (2023) that the non-willful penalty applies per annual report, not per account. Before Bittner, the government treated each unreported account as a separate violation, which multiplied penalties for filers with many accounts.

Willful Violations

A willful violation is one where you knowingly ignored the requirement or acted with reckless disregard. The civil penalty is the greater of about $165,353 (the inflation-adjusted 2026 figure) or 50 percent of the account balance at the time of the violation.¹² Willful penalties can be assessed per account per year, so someone with several unreported foreign accounts can face penalties that exceed the total value of the accounts.

Criminal Penalties

Willful violations can also be prosecuted criminally. A conviction carries a fine of up to $250,000, 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 maximum fine doubles to $500,000 and the prison term rises to ten years.¹³ Civil and criminal penalties are not mutually exclusive; the government can impose both for the same violation.¹²

Reasonable Cause

You can avoid non-willful penalties by showing two things: the failure to file was due to reasonable cause, and you properly reported the income from the foreign accounts on your tax return.¹⁴ Reasonable cause generally means an honest, credible explanation for not knowing about the requirement, not simply forgetting. Showing you paid tax on all foreign-account income strengthens the defense.

Fixing Missed or Late FBARs

If you missed past FBARs but don’t owe additional tax on the foreign-account income, the IRS offers Delinquent FBAR Submission Procedures. You qualify only if you are not under IRS examination or criminal investigation and the IRS hasn’t already contacted you about the missing reports.¹⁵ You file the late FBARs through the BSA E-Filing System, select a reason for the late filing on the cover page, and include a statement explaining the delay. The IRS will generally not impose a penalty if you properly reported and paid tax on all the income from those accounts.

If you do owe unreported tax because foreign-account income was left off prior returns, the Streamlined Filing Compliance Procedures may be the route. Those procedures are for taxpayers whose failure to report was non-willful. You need a valid taxpayer identification number, and you cannot use the procedures if you are eligible for a Social Security number but haven’t obtained one.¹⁶ Both late-filing programs carry specific eligibility rules and legal consequences, so talking with a tax professional before submitting is generally worthwhile.

A Note on Form 8938

The FBAR is separate from IRS Form 8938, the FATCA disclosure filed with your income tax return. Filing one does not satisfy the other, and the two forms have different thresholds, different scopes, and go to different agencies.⁵ If your foreign holdings are substantial, check whether Form 8938 applies in addition to the FBAR.

1
Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
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eCFR. 31 CFR 1010.350 – Reports of Foreign Financial Accounts
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Financial Crimes Enforcement Network. Filing for Child
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Financial Crimes Enforcement Network. Reporting Maximum Account Value
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Internal Revenue Service. Comparison of Form 8938 and FBAR Requirements
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FinCEN. Filing Requirement for Virtual Currency
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Financial Crimes Enforcement Network. BSA E-Filing System – File FBAR
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Financial Crimes Enforcement Network. Report Foreign Bank and Financial Accounts
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FinCEN. Due Date for FBARs
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FinCEN. Filing for Spouse
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eCFR. 31 CFR 1010.430 – Nature of Records and Retention Period
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Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties
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Office of the Law Revision Counsel. 31 USC 5322 – Criminal Penalties
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Office of the Law Revision Counsel. 31 USC 5321 – Civil Penalties
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Internal Revenue Service. Delinquent FBAR Submission Procedures
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Internal Revenue Service. Streamlined Filing Compliance Procedures for U.S. Taxpayers Residing in the United States Frequently Asked Questions and Answers