FBAR Penalty

Katelynn Minott, CPA & CEO July 11th, 2026

An FBAR penalty is a civil or criminal penalty for failing to file, filing late, filing inaccurately, or failing to keep required records for FinCEN Form 114. For U.S. expats, FBAR penalties can apply even when no U.S. tax is owed.

Why it matters for U.S. expats

FBAR penalties can be much larger than the account income involved, which is why missed foreign account reporting needs careful handling. The IRS looks at the facts, including whether the failure was non-willful or willful, whether the taxpayer had reasonable cause, whether account income was reported, and whether the taxpayer corrected the issue before being contacted.

Common questions

1. What triggers an FBAR penalty?

An FBAR penalty can be triggered by failing to file a required FBAR, filing after the deadline, omitting reportable accounts, reporting incorrect account values, or failing to keep required FBAR records.

2. How much is the non-willful FBAR penalty?

The current inflation-adjusted maximum for a non-willful FBAR violation is $16,536. For a missed annual FBAR, non-willful penalties apply per report, not per account.

3. How much is the willful FBAR penalty?

The willful FBAR penalty can be the greater of the current inflation-adjusted fixed amount or 50% of the balance in the account at the time of the violation.

4. What is the difference between willful and non-willful FBAR violations?

A non-willful violation usually involves mistake, misunderstanding, or negligence. A willful violation involves intentional conduct, reckless disregard, or conscious avoidance of the FBAR rules.

5. Can an FBAR penalty apply if no tax is owed?

Yes. FBAR is an account reporting requirement, not an income tax form. A penalty can apply even when the accounts produced no income or the taxpayer owed no U.S. tax.

6. Can FBAR penalties be removed for reasonable cause?

Yes. A non-willful FBAR penalty may be avoided if the taxpayer shows reasonable cause and the account balance was properly reported.

7. What should U.S. expats do if they missed an FBAR?

They should review whether all account income was reported and whether the Delinquent FBAR Submission Procedures, Streamlined Filing Compliance Procedures, or another compliance route applies before filing late FBARs.

8. Are FBAR penalties automatic?

No. The IRS says penalty decisions depend on the facts and circumstances. Filing late or incorrectly creates exposure, but the final penalty treatment depends on the case.

9. Can FBAR penalties become criminal?

Yes. Criminal FBAR penalties can apply in serious cases, especially where willful conduct, false filings, tax evasion, or other financial crimes are involved.

10. Is an FBAR penalty the same as a Form 8938 penalty?

No. FBAR penalties apply to FinCEN Form 114 under the Bank Secrecy Act. Form 8938 penalties apply to FATCA reporting on the tax return.

When to get help

Professional guidance is important when:

You missed one or more FBAR deadlines.
You omitted accounts from a filed FBAR.
You are unsure whether the failure was willful or non-willful.
You received an IRS notice, FBAR examination letter, or penalty notice.
You have foreign bank, brokerage, pension, business, or signature authority accounts.
You also missed Form 8938, Form 5471, Form 3520, or another international form.
You need to choose between late FBAR filing, Delinquent FBAR Submission Procedures, streamlined filing, or voluntary disclosure.

Bright!Tax can review your FBAR history, identify penalty exposure, and help choose the right compliance route before you file late or corrected reports. Get started with Bright!Tax.

Official sources

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

July 2026

Glossary: Reasonable Cause