FBAR Filing Requirements: What Every Expat Needs to Know
If you hold any financial accounts outside the United States and the combined value of those accounts exceeds $10,000 at any point during the calendar year, you are required to file a Report of Foreign Bank and Financial Accounts — commonly known as the FBAR. This obligation applies to every U.S. person, including citizens, green card holders, and resident aliens who meet the substantial presence test.
At Segal, Cohen & Landis, P.C. (SCL), we have represented hundreds of taxpayers facing FBAR compliance issues — from routine filings to complex penalty disputes. In our experience, most FBAR problems begin with a simple misunderstanding of who must file and what accounts are reportable. This guide covers everything you need to know to stay compliant and avoid severe penalties.
Who Must File an FBAR?
The FBAR filing requirement applies to any “United States person” who has a financial interest in, signature authority over, or other authority over one or more foreign financial accounts if the aggregate value of all foreign accounts exceeds $10,000 at any time during the calendar year. The term “United States person” includes:
- U.S. citizens, regardless of where they live
- Lawful permanent residents (green card holders)
- Individuals who meet the substantial presence test
- U.S. entities — corporations, partnerships, LLCs, trusts, and estates
This means that an American living in London with a British bank account containing £8,000 and a separate investment account worth £3,000 must file an FBAR because the combined value exceeds $10,000. The threshold is calculated using the aggregate of all foreign accounts, not each individual account.
What Counts as a Foreign Financial Account?
The scope of reportable accounts is broader than most people realize. Foreign financial accounts include:
- Bank accounts — checking, savings, and time deposits held at foreign banks
- Securities accounts — brokerage accounts holding stocks, bonds, and mutual funds at foreign financial institutions
- Commodity futures and options accounts
- Insurance policies with cash value (e.g., foreign life insurance policies)
- Mutual funds and pooled investment vehicles
- Accounts holding precious metals, gold, or other non-cash assets — if maintained by a foreign financial institution
A common misconception is that only traditional bank accounts are reportable. In reality, if a foreign institution holds assets on your behalf — whether cash, securities, or gold — that account is potentially FBAR-reportable.
FBAR Deadline and Automatic Extension
The FBAR is due on April 15 of the year following the calendar year being reported. However, unlike most tax deadlines, the FBAR receives an automatic extension to October 15 — no request or form is required. If you miss the April deadline, you still have until October 15 to file without penalty.
The FBAR is filed electronically through the BSA E-Filing System maintained by the Financial Crimes Enforcement Network (FinCEN), not with your tax return. The form number is FinCEN Form 114. You cannot file a paper FBAR.
Joint Accounts and Signature Authority
If you hold a joint account with your spouse, only one FBAR is required — but both spouses’ Social Security numbers must be listed on the filing. The spouse who files can include the other spouse’s accounts on a single FBAR by checking the appropriate box on the form.
Importantly, signature authority alone triggers the filing requirement. Even if you do not own the account or benefit from it financially, having the ability to control the disposition of funds creates an FBAR obligation. This frequently affects corporate officers, trustees, and individuals with power of attorney over a relative’s foreign account.
FBAR Penalties: Non-Willful, Willful, and Criminal
FBAR penalties are among the most severe in the entire U.S. tax code. Understanding the penalty structure is critical because the consequences of non-compliance far exceed what most taxpayers expect.
Non-Willful Penalties
For violations that the IRS determines were not willful — meaning you did not know about the requirement or made an honest mistake — the penalty is up to $10,000 per violation, per year. Each unreported account in each year can constitute a separate violation.
Willful Penalties
If the IRS determines that your failure to file was willful — meaning you knew about the requirement and chose not to comply, or acted with reckless disregard — the penalty jumps to the greater of $100,000 or 50% of the account balance at the time of the violation, per account, per year. In cases involving large balances, willful FBAR penalties can easily exceed the total value of the accounts.
Criminal Penalties
Willful failure to file an FBAR can also result in criminal prosecution. The criminal penalties include fines of up to $500,000 and imprisonment for up to 10 years. The Department of Justice has pursued criminal FBAR cases with increasing frequency over the past decade.
In our practice at SCL Tax Law, we have helped clients reduce or eliminate FBAR penalties through reasonable cause arguments, voluntary disclosure, and streamlined filing procedures. The key in every case is acting before the IRS contacts you.
FBAR vs. Form 8938 (FATCA): Key Differences
Many taxpayers confuse the FBAR with Form 8938, which is filed under the Foreign Account Tax Compliance Act (FATCA). While both forms require reporting of foreign financial assets, they have different thresholds, different filing methods, and different penalties.
| FBAR (FinCEN 114) | Form 8938 (FATCA) | |
|---|---|---|
| Filed with | FinCEN (BSA E-Filing) | IRS (attached to tax return) |
| Threshold (U.S. residents) | $10,000 aggregate at any point | $50,000 on last day / $75,000 at any point |
| Threshold (expats) | $10,000 aggregate at any point | $200,000 on last day / $300,000 at any point |
| Assets covered | Foreign financial accounts | Financial accounts + non-account assets (foreign stocks, partnerships, etc.) |
| Maximum civil penalty | $100,000+ or 50% of balance (willful) | $10,000 per failure + up to $60,000 for continued non-filing |
| Filing deadline | April 15 (auto-extends to Oct 15) | Same as tax return deadline |
If you have foreign financial accounts, you may need to file both the FBAR and Form 8938. They are separate requirements with separate penalties — filing one does not satisfy the other.
Passport Restriction Risk for FBAR Non-Compliance
Under IRC § 7345, the IRS can certify seriously delinquent tax debt to the State Department, which can then deny, revoke, or limit your U.S. passport. The current threshold for certification is a combined tax debt of $55,000 or more (adjusted annually for inflation).
While FBAR penalties alone are not directly certified under this provision, the reality is that FBAR penalties frequently arise alongside back taxes, unfiled returns, and other tax liabilities. When FBAR penalties are assessed and combined with underlying tax debt, the total can easily exceed the $55,000 threshold — putting your passport at risk. For Americans living abroad, this can be devastating.
Records Retention Requirements
You must retain records of all foreign financial accounts — including bank statements, account opening documents, and records of the maximum account value — for a minimum of five years from the FBAR due date. Failure to maintain adequate records can itself be treated as a violation.
FBAR Late Filing: What to Do If You Missed the Deadline
If you have not filed FBARs in prior years, you have several options — but the worst option is doing nothing. The IRS distinguishes between taxpayers who come forward voluntarily and those who are caught. Coming forward proactively almost always results in significantly lower penalties.
The primary programs available include:
- Streamlined Filing Compliance Procedures — for taxpayers whose failure was non-willful. This program requires filing the last 3 years of tax returns and 6 years of FBARs, with a 5% miscellaneous offshore penalty (or zero penalty for qualifying U.S. taxpayers living abroad).
- IRS Voluntary Disclosure Program (VDP) — for taxpayers with willful exposure who want to avoid criminal prosecution. The VDP requires a 6-year disclosure period and results in negotiated civil penalties, but provides protection against criminal referral.
- Delinquent FBAR Submission Procedures — for taxpayers who have no unreported income but simply failed to file informational returns. Penalties may be waived if the IRS has not already contacted you.
Our attorneys at SCL Tax Law have guided clients through all three programs. The right choice depends on your specific facts — whether your failure was willful, whether you have unreported income, and whether the IRS has already initiated contact. Learn more about the IRS Voluntary Disclosure Program and how it works.
Frequently Asked Questions About FBAR Filing
Do I need to file an FBAR if my account never reached $10,000?
No. The FBAR filing requirement is triggered only when the aggregate value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year. If the combined maximum value stayed below $10,000, no FBAR is required.
Does a foreign retirement account need to be reported on the FBAR?
Generally, yes. Foreign pension plans, superannuation funds, and retirement savings accounts held at foreign financial institutions are reportable on the FBAR. There are limited exceptions under certain tax treaties, but the default position is that they must be reported.
Can I file an FBAR late without penalty?
Potentially, yes. If you qualify for the Delinquent FBAR Submission Procedures and the IRS has not already contacted you about the missing FBARs, penalties may be waived. However, this determination is fact-specific and you should consult a tax attorney before filing.
What happens if the IRS discovers my unreported accounts first?
If the IRS identifies your unreported foreign accounts before you come forward — through FATCA reporting, treaty exchange of information, or a whistleblower — you lose access to the Streamlined Procedures and may face the full range of FBAR penalties, including willful penalties and potential criminal prosecution.
Is cryptocurrency held on a foreign exchange FBAR-reportable?
FinCEN has indicated that it intends to require FBAR reporting for foreign-held cryptocurrency, but as of 2026, the final regulations have not yet been issued. However, the IRS is actively pursuing information about foreign crypto holdings through other channels, and proactive reporting is strongly recommended.
Protect Yourself: Talk to an FBAR Attorney Today
FBAR compliance is not optional, and the penalties for non-compliance are disproportionately severe. Whether you need to file current FBARs, correct past omissions, or defend against IRS penalties, the attorneys at Segal, Cohen & Landis, P.C. can help. We have decades of combined experience in international tax law and have resolved FBAR matters for clients across the United States and abroad.
Contact SCL Tax Law today for a confidential consultation about your foreign account reporting obligations. Attorney-client privilege protects our communications — unlike conversations with CPAs or enrolled agents, what you tell us stays protected.
Have questions about this topic? Talk to an IRS attorney today.
Segal, Cohen & Landis, P.C. — Beverly Hills. Serving clients nationwide.
Samuel Landis, Esq.
LL.M. (Tax) · Selected to Super Lawyers®
Sam Landis is a Beverly Hills IRS tax attorney specializing in IRS collection defense, audit representation, and international tax compliance for foreign nationals and US expats.