Every US citizen and green card holder whose foreign accounts together topped $10,000 at any moment of 2025 owes FinCEN a report by Thursday, October 15, 2026 — and most people abroad cross that line without noticing, simply by having a salary account and a savings account in the country where they live. The FBAR is not a tax, and it costs nothing to file. Yet its penalties dwarf those of almost any other information form, and in July 2026 the IRS quietly withdrew the one published promise that honest late filers would not be fined. This piece explains what the report covers, how penalties actually work after the Supreme Court's 2023 Bittner decision, and where the remaining traps are.
A banking-secrecy report, not a tax form
The FBAR — formally FinCEN Form 114, the Report of Foreign Bank and Financial Accounts — comes from the Bank Secrecy Act, not the Internal Revenue Code. Its legal basis is 31 U.S.C. § 5314, implemented by 31 CFR § 1010.350, and it is filed electronically through FinCEN's BSA E-Filing System, separately from the federal tax return. The IRS enforces it, but the form never touches Form 1040.
The Supreme Court put the purpose plainly in 2023: the law does not make foreign accounts illegal and does not tax them; it requires a report so the government can trace funds used for illicit purposes and spot unreported income. That framing matters for expats. Having a bank account in Lisbon, Tokyo or Toronto is entirely legal. Failing to tell Treasury about it is the violation.
The regulation applies to every "United States person." That means citizens wherever they live, US residents (including green card holders, who are resident aliens for tax purposes), and US-organized entities such as corporations, LLCs, partnerships and trusts. Dual citizens are not exempt because they also hold a Romanian, Canadian or Israeli passport.
The $10,000 test is aggregate, momentary and unindexed
You must file if the combined value of your foreign financial accounts exceeded $10,000 at any time during the calendar year. Three features of that test catch people out.
First, it is aggregate. The IRS's own example: two accounts whose combined balance passes $10,000 at any one time must both be reported, even if neither alone came close. An expat with €4,000 in a current account, €5,000 in savings and a small brokerage account is likely over the line.
Second, it is momentary. A single day above $10,000 — a bonus landing, a house deposit passing through — triggers the year's filing. You report each account's maximum value, taken from periodic statements in the account's currency and converted to dollars at the Treasury's end-of-year reporting rate.
Third, the $10,000 figure is fixed in regulation (31 CFR § 1010.306(c), as quoted in the Bittner opinions) and, unlike the penalty caps, is not indexed for inflation. It is the same number that has applied for decades, so in real terms the net catches more people every year — the exact year the $10,000 threshold was first set was not independently confirmed against a primary historical source for this article.
What counts as an account is broad. The regulation covers bank accounts, securities accounts, insurance or annuity policies with a cash value, commodity futures accounts, and mutual funds or similar pooled funds with a regular net asset value. What does not count is equally specific: foreign currency or precious metals you hold directly, foreign real estate you own directly, and foreign government "Social Security"-type benefits are not reportable. Accounts in US territories such as Puerto Rico or Guam are not "foreign" for FBAR purposes, because the FBAR definition of the United States includes the territories.
The exceptions are narrow. Accounts held through a US retirement plan or IRA, accounts at a US military banking facility abroad, and accounts of governmental entities need not be reported.
Ownership is not the only trigger: signature authority, entities and joint accounts
The FBAR asks about two relationships to an account: a financial interest or signature or other authority.
A financial interest exists where you are the owner of record, but also where the owner is your agent or nominee, a corporation or partnership in which you own more than 50 percent of the vote, value, profits or capital, or a trust in which you hold a present beneficial interest in more than 50 percent of the assets or income. A US founder of a Singapore or Estonian company who holds a majority stake must therefore report the company's foreign bank accounts on a personal FBAR — on top of the separate reporting that comes with owning a foreign company outright.
Signature authority is the power, alone or jointly, to move money in an account by instructing the bank directly. It catches expats who never think of the money as theirs: an employee who can authorize payments from a foreign employer's account, a treasurer of an expat association, an adult child added to an elderly parent's account in Manila or Mumbai. Some employees of regulated or listed companies are exempt from reporting authority over their employer's accounts. For certain financial professionals, the filing deadline for signature-authority-only reports has been extended year after year; the most recent such notice listed on FinCEN's FBAR page is Notice 2022-1, dated December 9, 2022, and the IRS says the extension continues, though this article did not locate a notice specifically covering the 2025 reporting year on FinCEN's site.
Joint accounts are reported in full by each US owner. Married couples get one simplification: if every foreign account is jointly owned, one spouse can file for both, provided the other signs FinCEN Form 114a. How the couple files their income tax return — jointly or separately — is irrelevant to this exception. A US citizen married to a non-American cannot use it for the spouse, since the non-American has no FBAR obligation to begin with; the US spouse simply reports the joint account.
Filers with a financial interest in, or signature authority over, 25 or more accounts can tick a box and state the number of accounts instead of listing each one, though they must supply details on request.
Deadlines, filing mechanics and the five-year paper trail
The FBAR is due April 15 after the calendar year it covers, with an automatic extension to October 15 that requires no request. For accounts held during 2025, that extended deadline falls this Thursday, October 15, 2026. FinCEN also grants further extensions to people in declared disaster areas; its FBAR page lists relief notices for Hurricanes Helene and Milton in October 2024 and for those affected by the attacks in Israel in 2023 and 2024.
Filing is electronic only. A paper FBAR is accepted only if FinCEN's Resource Center grants an exemption; the IRS rejects the obsolete TD F 90-22.1 and printouts of Form 114. Individuals can file through BSA E-Filing without registering, while CPAs, attorneys and enrolled agents filing for clients must register as institutional filers and keep a signed Form 114a.
The obligation does not end at submission. For every reported account you must keep the name on the account, the account number, the bank's name and address, the account type and the maximum value for the year — generally for five years from the FBAR due date. Bank statements usually suffice. For expats who change banks or countries often, downloading year-end statements before closing an account is the cheapest compliance insurance there is.
One more timing point: the FBAR always covers the calendar year, January through December, even if your country of residence runs its tax year on a different schedule, as the UK and Australia both do (their exact tax-year start and end dates were taken from general knowledge rather than re-checked against HMRC or the ATO for this article).
FBAR versus Form 8938: two reports, overlapping but not interchangeable
Since the Foreign Account Tax Compliance Act of 2010, many expats also file Form 8938 with their tax return. The IRS is explicit that Form 8938 does not replace the FBAR; people must test each form's rules separately and may owe both — our guide to FATCA and the accounts it exposes covers how the two systems connect. For someone living abroad, the 8938 threshold is twenty times higher, which is why many expats owe an FBAR but no 8938.
| Comparison point | FinCEN Form 114 (FBAR) | IRS Form 8938 |
|---|---|---|
| Filed with | FinCEN, via BSA E-Filing | IRS, attached to the income tax return |
| Threshold, single filer living abroad | Over $10,000 aggregate at any time in the year | Over $200,000 on the last day of the year or over $300,000 at any time |
| Threshold, married filing jointly, abroad | Same $10,000 test, applied per person | Over $400,000 on the last day or over $600,000 at any time |
| Threshold, single filer living in the US | Over $10,000 | Over $50,000 at year end or over $75,000 at any time |
| Due date | April 15, automatic extension to October 15 | Due with the tax return, including extensions |
| Account at a foreign branch of a US bank | Reported | Not reported |
| Signature authority only | Reported (with exceptions) | Not reported |
| Foreign stock held outside an account | Not reported | Reported |
| Foreign real estate held directly | Not reported | Not reported |
| Base civil penalty | Up to $16,536 non-willful (2025 adjusted) | $10,000, plus $10,000 per 30 days after IRS notice, up to $60,000 |
Table: IRS comparison chart for all rows except the FBAR penalty, which comes from 31 CFR § 1010.821.
Penalties after Bittner: per report, not per account
The statute sets two tiers. A non-willful violation carries a civil penalty of up to $10,000, and no penalty at all if the violation was due to reasonable cause and the account balance was properly reported. A willful violation raises the cap to the greater of $100,000 or 50 percent of the account balance at the time of the violation, and the reasonable-cause defense disappears. Those statutory figures are indexed: for penalties assessed on or after January 17, 2025, the caps are $16,536 (non-willful) and $165,353 (willful, or 50 percent of the balance if higher). As of early October 2026, the eCFR showed no later adjustment, so a 2026 update has either not been published or not yet been codified — check before quoting these numbers.
For years the open question was what "a violation" meant. The case that answered it began with Alexandru Bittner, a Romanian immigrant who became a naturalized citizen, returned to Romania in 1990 and built a business career there without realizing he had US reporting duties. After moving back to the United States in 2011, he filed late reports for 2007 through 2011. The government accepted that his errors were non-willful but counted 272 unreported accounts and assessed $2.72 million — $10,000 per account. In the Ninth Circuit, Jane Boyd, a US citizen with 13 UK accounts funded by an inheritance, had faced the same theory: $130,000 for one late report.
On February 28, 2023, the Supreme Court sided with Bittner, 5–4, in Bittner v. United States. Justice Gorsuch wrote that the non-willful penalty accrues per report, not per account; Justice Barrett, joined by Justices Thomas, Sotomayor and Kagan, dissented. Bittner's maximum exposure fell from $2.72 million to $50,000 — five reports at $10,000 each. The majority noted that Congress added non-willful penalties only in 2004; the original 1970 law penalized willful violations alone, capped at $1,000. The opinion also named the population most affected: immigrants with accounts abroad and Americans who live outside the country.
Bittner did not touch willful penalties, which remain per account and balance-based. The statute does not define willfulness, and several federal appeals courts have held that reckless disregard of the filing duty can qualify, though the specific circuit decisions on that standard were not reviewed in detail for this article. Criminal exposure sits on top: a willful violation can carry a fine of up to $250,000 and five years in prison.
Time limits are generous to the government. Treasury may assess a civil FBAR penalty within six years of the violation, and may sue to collect within two years of assessment. Practitioners generally read the six years as running from the FBAR due date, though that specific reading rests on professional commentary rather than the statute's own text.
Why the IRS already knows: FATCA and the bank on the other end
The FBAR used to depend on self-reporting. FATCA changed the arithmetic. Enacted in 2010, it requires foreign financial institutions to report to the IRS on accounts held by US taxpayers, either directly or under an intergovernmental agreement with their home country. Treasury's table of FATCA agreements lists 114 jurisdictions, from Algeria to Vietnam, including every major expat destination — Canada (in force June 27, 2014), the United Kingdom (August 11, 2014), France (October 14, 2014), Mexico (April 10, 2014) and Thailand (April 29, 2024).
In practice this means the account an expat forgot to put on an FBAR has very likely already been reported by the bank — the mechanics of that reporting, and what it means for the rest of your return, are the subject of our FATCA guide. The mismatch between FATCA data and a missing FBAR is exactly the kind of signal the IRS's streamlined-procedure page warns it may check submissions against. It also explains a parallel cost of being American abroad: some foreign banks decline US clients rather than take on the reporting work, though this article did not check a primary or statistical source on how common those refusals or closures actually are.
Catching up in 2026: the no-penalty promise is gone
Since 2014, an American abroad who had reported all income and paid all tax, but never filed FBARs, had a simple path: the Delinquent FBAR Submission Procedures. The published terms said the IRS would not impose a penalty if the income from the accounts had been properly reported and taxed and the person had not been contacted about an examination for those years — this description of the former terms rests on tax-practitioner commentary rather than an archived IRS page.
That page no longer exists. Tax practitioners report that the IRS removed it around July 1, 2026, without an announcement. The primary record supports the change: the old IRS address returned a "not found" error when checked on October 12, 2026; the streamlined-procedures page, updated July 11, 2026, now lists only the Criminal Investigation voluntary disclosure practice and the delinquent international information return procedures as alternatives; and the IRS FBAR page, updated July 30, 2026, now says that filing late or not at all "is a violation and may subject you to penalties," urging people who have not been contacted to file "as soon as possible to keep potential penalties to a minimum." Practitioners note that an Internal Revenue Manual provision telling examiners not to penalize qualifying delinquent filers, IRM 4.26.16.3.11(4), still appears in the manual, according to the same secondary commentary.
What replaces the promise is discretion. A late FBAR filed through BSA E-Filing with a reason for lateness can still be accepted without penalty, and the statute's reasonable-cause defense still applies to non-willful violations. But there is no longer a published safe harbor to point to.
For expats who also left income off their returns, the main route remains the Streamlined Foreign Offshore Procedures, first offered September 1, 2012 and broadened since. To qualify, a citizen or green card holder must, in at least one of the three most recent tax years, have had no US abode and been physically outside the United States for at least 330 full days. The filer submits three years of delinquent or amended returns, six years of FBARs, and a Form 14653 certifying that the failures were non-willful — defined as negligence, inadvertence, mistake or a good-faith misunderstanding of the law. In exchange, the IRS waives FBAR penalties, information-return penalties and failure-to-file penalties, though the tax and interest must be paid. The domestic version, for people who do not meet the non-residency test, carries a 5 percent miscellaneous offshore penalty, per practitioner summaries of that program.
Two eligibility rules are absolute. Anyone whose return for any year is under civil examination, or who is under criminal investigation, cannot use the streamlined procedures. And the late FBARs must be e-filed with "Other" selected as the reason for lateness and "Streamlined Filing Compliance Procedures" entered in the explanation box.
Crypto, pensions and other gray zones
Cryptocurrency. Under FinCEN Notice 2020-2, published December 31, 2020, a foreign account holding only virtual currency is not currently reportable, because the regulation's list of account types does not include it. An account that holds virtual currency alongside cash or securities is reportable as usual. FinCEN said at the time it intended to propose adding virtual currency to the rule; practitioner sources report that no such rule had been finalized as of the 2026 filing season. Separately, on October 6, 2026, FinCEN published a withdrawal of a different 2020 proposal on bank and money-transmitter reporting for crypto wallet transactions, seen only in a Federal Register public-inspection excerpt rather than the full notice; that withdrawal does not change the FBAR position.
Foreign pensions. The regulation's retirement exception names only US arrangements — plans under Internal Revenue Code sections 401(a), 403(a) and 403(b), IRAs and Roth IRAs. Nothing in it exempts a UK workplace pension, an Australian superannuation fund or a French life-insurance-based savings plan. Whether a given foreign plan is a reportable "account" depends on its structure; a policy with a cash value is reportable by definition. This article did not check FinCEN or IRS guidance on specific foreign pension types beyond the regulation's own text — for how a given country's pensions interact with your US treaty position, see our guide to US retirement accounts abroad.
Government benefits and things you hold. Foreign state pensions of the "Social Security" type, cash in a home safe, gold coins held directly and a directly owned apartment are all outside the FBAR.
Mutual funds. Foreign mutual funds are FBAR-reportable when held in a foreign account, and they are also where FBAR compliance meets a far costlier tax problem: most count as passive foreign investment companies, a classification this article did not independently re-check against 26 U.S.C. § 1297.
Common mistakes
- Testing each account separately. The $10,000 test applies to the combined maximum balances of all foreign accounts.
- Using year-end balances. The FBAR asks for each account's maximum value during the year, not December 31.
- Assuming Form 8938 covers it. Filing Form 8938 does not satisfy the FBAR, and vice versa.
- Forgetting signature authority. An employer's account, a club's account or a parent's account you can sign on may be reportable even though none of the money is yours.
- Leaving out accounts in companies you control. A US person owning more than 50 percent of a foreign company has a financial interest in its accounts.
- Treating a foreign pension like an IRA. The retirement exception covers US plans only.
- Mailing a paper form. Paper FBARs are rejected unless FinCEN has granted an e-filing exemption.
- Relying on the old delinquent-filing safe harbor. Its published no-penalty terms were withdrawn in July 2026.
- Throwing away statements. Records must be kept for five years from the due date.
- Assuming dual nationality exempts you. Every US citizen is a US person for FBAR purposes, whatever other passport they hold.
What this means for your filing
For a US citizen or green card holder abroad, the FBAR sits beside the tax return rather than inside it, and the two must tell the same story. The practical sequence each year:
- Add up the highest balance of every foreign account you own, co-own, control through a company you hold more than 50 percent of, or can sign on. If the total ever passed $10,000, you file.
- File FinCEN Form 114 through BSA E-Filing by April 15, or by October 15 using the automatic extension. For 2025 accounts, that is October 15, 2026.
- Separately check Form 8938: abroad, single filers owe it above $200,000 at year end or $300,000 at any time; joint filers above $400,000 or $600,000.
- Make sure the income from every account you list — interest, dividends, gains — is on your Form 1040. Both the withdrawn delinquent-FBAR terms and today's streamlined terms turn on whether the account income was reported and taxed.
- Keep five years of statements.
If you have missed years, the decision has changed in 2026. Where all income was reported and only the FBARs are late, filing promptly with a clear explanation is still the natural step, but without a published guarantee of no penalty. Where income was also missed and you meet the 330-day non-residency test, the Streamlined Foreign Offshore Procedures still waive FBAR penalties in exchange for three years of returns and six years of FBARs. Where there is any question of willfulness, the IRS itself points people to its voluntary disclosure practice and to professional advice. After Bittner, a non-willful mistake costs at most about $16,500 per late report rather than per account — still a serious sum, but a bounded one.
Sources
Primary sources (accessed October 12, 2026)
- FinCEN, Report Foreign Bank and Financial Accounts
- IRS, Report of Foreign Bank and Financial Accounts (FBAR) (last updated July 30, 2026)
- 31 CFR § 1010.350, eCFR
- 31 CFR § 1010.821 (penalty adjustment table), eCFR
- IRS, Comparison of Form 8938 and FBAR requirements (last updated September 19, 2026)
- 31 U.S.C. § 5321, via Cornell LII
- FinCEN Notice 2020-2, FBAR Filing Requirement for Virtual Currency
- Bittner v. United States, No. 21-1195, decided February 28, 2023
- US Treasury, FATCA agreements table
- IRS, Streamlined filing compliance procedures (last updated July 11, 2026)
- IRS, US taxpayers residing outside the United States (Streamlined Foreign Offshore Procedures, last updated July 11, 2026)
Secondary sources, used for the 2026 policy change and program details where no primary source was available (accessed October 12, 2026): Kaufman Rossin, Taxes for Expats, and Beancount.io reporting on the Delinquent FBAR Submission Procedures' removal; Taxes for Expats on crypto FBAR reporting; and professional summaries of the Streamlined Domestic Offshore penalty.
A note on method: this article is general information, not tax, legal, or financial advice. The FBAR threshold and filing rules, the 2025 inflation-adjusted penalty caps, the penalty statute and time limits, the Supreme Court's opinion in Bittner v. United States, the Form 8938 comparison chart, the Streamlined Foreign Offshore Procedures, FinCEN Notice 2020-2 and Treasury's FATCA agreement table were checked against official sources current as of October 12, 2026. Penalty amounts, IRS compliance programs and FinCEN relief notices change frequently and should be reconfirmed before you rely on them.