Missing the Report of Foreign Bank and Financial Accounts (FBAR) deadline happens more often than people think. Many U.S. taxpayers with foreign accounts simply forget the requirement, even when they have reported all their income correctly on their tax returns.

Not filing an FBAR isn’t a minor slip. Each non-willful violation can carry a civil penalty of $10,000, and the total can grow quickly if several years are affected. However, the good part is that the Internal Revenue Service (IRS) has procedures that allow honest mistakes to be corrected without facing large fines.

For taxpayers whose late FBARs were unintentional, the delinquent FBAR submission procedures offer a way to file safely, protect against penalties, and restore compliance with U.S. tax law.

This blog post walks you through these procedures, explains who qualifies, and shows the practical steps you can take to handle late FBAR filings properly.

What are the Delinquent FBAR Submission Procedures?

Delinquent FBAR submission procedures let taxpayers complete a late FBAR filing without facing penalties when they meet the IRS rules. The IRS gives this program to help people who missed the deadline but have already reported all their foreign income and paid the taxes they owed. It is an easy way to correct mistakes and stay in good standing with the IRS.

When to Use Delinquent FBAR Filing Procedures?

Use delinquent FBAR filing procedures when your situation fits common, honest mistakes rather than serious noncompliance. These examples can help you decide if this path matches your circumstances:

• You only recently found out about the FBAR requirement and realized the taxes were unfiled.
• A tax preparer or advisor gave you wrong guidance about whether you needed to file FBARs.
• Severe illness, an accident, or some other significant life event interfered with your timely filing.
• Natural catastrophes or other unforeseen emergencies made it impossible to deliver on time.
• Family crises, including a death or severe financial loss, led to delays in attending to paperwork.
• You have stayed compliant with your U.S. tax returns, but now want to correct missed FBAR filings before the IRS contacts you.

These situations show practical times to use delinquent FBAR procedures. Acting quickly can help you fix past mistakes and avoid penalties.

Who Qualifies for Delinquent FBAR Filing Procedures?

Meeting the right IRS conditions is the only way to avoid penalties when using an FBAR delinquent filing. The following rules decide whether you can safely file your late FBARs or need to consider another compliance program.

1. No IRS Contact Yet: The IRS has not reached out to you about any unfiled FBARs.
2. All Income Already Reported: Every bit of your foreign income was already included on your U.S. tax returns.
3. Taxes Already Paid: You do not owe extra tax linked to the missed FBARs.
4. Non-Willful Conduct Only: Your late filing should be an innocent mistake, for example, ignorance of FBAR regulations, misunderstanding counsel, or honest error. If you stand to lose and knowingly fail to report or conceal accounts, that constitutes willfulness and excludes you.
5. Other Offshore Forms: If you also failed to file forms such as  FATCA (Form 8938) or Form 3520, the IRS requires that you employ the Delinquent International Information Return Submission Procedures instead.

How to File Using Delinquent FBAR Submission Procedures?

Following the right process for late FBARs shows the IRS that you are taking responsibility and filing correctly, which can help avoid penalties and complications.

Gather Details for Each Foreign Account

Start by collecting complete information for every account you missed over the last six years. Accurate details make your filing smooth and reduce follow-up questions from the IRS. Include:

• Bank or Institution Name and Address: This tells the IRS exactly where your account was held.
• Account Number: Make sure it matches the bank’s records.
• Type of Account: Specify whether it was checking, savings, investment, or another type.
• Highest Year-End Balance: Convert it to U.S. dollars for each year.
• Control or Signature Authority: Note whether you controlled the account or only had signing rights.
• Joint Account Details: If someone else shared the account, include their information.

Collecting these details carefully sets a clear record and shows good faith.

Submit Through the FinCEN BSA E-Filing System

Taking each step in the BSA E-Filing system carefully helps you provide clear, accurate information to the IRS and supports your claim that the late FBARs were filed responsibly.

• Log in to the official Financial Crimes Enforcement Network (FinCEN) Form 114 BSA E-Filing System.
• Select Form 114 for each year you are submitting late.
• Choose “Reason for Late Filing” and select Delinquent FBAR Submission Procedures.
• Attach your Reasonable Cause Statement, either in the main form or as a separate file.
• Double-check all details, including account numbers, balances, and ownership.
• Submit electronically; paper submissions are not allowed for FBARs.

Write a Clear Reasonable Cause Statement

Your Reasonable Cause Statement explains why the FBAR was not filed on time. Be honest and give specific details. Some accepted reasons include:

• You did not know about the FBAR requirement at the time.
• You relied on incorrect advice from a tax professional.
• Illness or serious family emergencies prevented you from filing.

Focus on facts and actions. Show that once you realized the missed filing, you acted promptly to correct it.

Keep All Records

After you send it, retain the digital confirmation and supporting documents. Such records indicate that you filed correctly and may be valuable in case the IRS later audits your submissions.

Check out: Recent Developments in Criminal FBAR Enforcement

What Happens Next: IRS Response and Penalty Relief?

Filing late FBARs correctly through the delinquent filing procedures places you in a positive standing with the IRS and reduces the chances of having penalties. Once you have filed, the following is usually what happens:

• IRS Review: The IRS thoroughly reviews your late FBARs to ensure all foreign income was reported on your tax returns and that any taxes owed were paid. If everything is correct and no audits or investigations are pending, the IRS generally waives penalties for these late submissions.
• Possible Audits: Although the IRS does not invariably audit all delinquent FBARs, certain filings can be chosen for examination by IRS compliance checks. Keeping detailed records and supporting documents can facilitate responding in the event that the IRS has questions.
• IRS Contact Prior to Filing: If the IRS contacts you regarding missing FBARs prior to filing, the procedures for delinquent filings will no longer apply. Under such circumstances, penalties or other enforcement procedures may be imposed. Filing first acts to protect you from this risk.
• Penalty Waivers and IRS Offshore Amnesty Program: Filing delayed FBARs under this program can qualify you for FBAR penalty relief. The IRS will usually only grant waivers if you file voluntarily and provide a clear, reasonable cause for the delayed filing.
• Importance of Documentation: Keep all evidence of submissions, copies of the reasonable cause statement, and associated correspondence. Documenting ensures that you can demonstrate that you were in good faith and responsible once the mistake of filing was realized.
• Statute of Limitations: The IRS may impose penalties on FBAR violations within a period of six years from the original filing due date. Filing ahead of time reduces your vulnerability and limits the time frame within which penalties can be imposed.

Alternatives to Delinquent FBAR Submission Procedures

When you are late filing FBARs or have issues related to FBARs, the IRS has various programs to get you back in compliance. Each program is appropriate for a variety of situations, and determining which one is right for you can save you time, money, and hassle.

Each program has its own distinct rules based on your particular situation. For instance:

• If you merely overlooked filing FBARs but reported everything else in full and good faith, the delinquent FBAR procedures are the most straightforward, lowest-risk solution.
• If you also missed reporting foreign income on your return but did not willfully try to conceal it, the streamlined procedures allow you to get back on track without most penalties.
• The practice of voluntary disclosure comes into play only if you’re aware that you failed to comply or are already in trouble with the IRS.
• Occasionally, late filings include other documents beyond FBAR, such as Foreign Account Tax Compliance Act (FATCA) Form 8938, and those have their own respective procedures for delinquent submissions.

Deciding on the proper path can be difficult. Obtaining professional guidance guarantees you’re following the optimum course according to your facts and preventing unnecessary penalties or IRS scrutiny.

How Can the Verni Tax Law Help with Delinquent FBAR Filing?

Anthony N. Verni is leading Verni Tax Law with over 25 years of practice as a sole practitioner to address delinquent FBAR submissions and other IRS compliance matters. As both an attorney and a Certified Public Accountant (CPA), he serves clients internationally and nationally, working solely on U.S. tax burdens and the unique challenges they pose.

Through this experience, clients are able to proceed with certainty, knowing every step is informed by profound expertise and meticulous care.

Strategic FBAR Penalty Mitigation

Verni Tax Law’s FBAR attorneys in California and beyond carefully review each client’s situation to identify opportunities for penalty relief under programs like the Delinquent FBAR Submission Procedures. They build strong, fact-based approaches to help reduce or eliminate fines tied to late or missing FBAR filings.

Expert Handling of IRS Audits and Inquiries

Having an IRS inquiry or audit related to FBARs can be a cause for anxiety. Verni Tax Law handles all aspects of the experience, preparing paperwork, negotiating with the IRS, and protecting your rights in full throughout.

Customized Compliance Solutions

Every situation is unique, and the company approaches it that way. Verni Tax Law develops feasible filing and compliance plans that conform to IRS regulations while accommodating your unique situation. This meticulous planning reduces future risks and guarantees accurate reporting.

Clear, Practical Guidance Every Step

Understanding FBAR rules and IRS procedures can be overwhelming. Verni explains the process in clear, simple terms so you can make informed choices confidently. Support continues throughout, giving you clarity and direction from start to finish.

Take Action and Gain Clarity on Your FBAR Filings!

Even if you are not sure if your FBAR filings are late or whether penalties will be applied for not filing, taking the first step to clarify is important. Uncertainty causes anxiety, and taking care of possible issues early gives you room to act boldly.

Contact Verni Tax Law to discuss your case and receive professional advice on the best course of action. Moving forward sooner is less stressful and prevents problems later.

FAQs

1. How detailed should my FBAR late filing explanation be?

Providing a clear and honest Reasonable Cause Statement is essential. It should explain why the FBAR was missed, focusing on circumstances that show the failure was not intentional. The IRS does not require a fixed length, but your explanation should:

• Describe the events that caused the delay.
• Show that you acted in good faith once the oversight was discovered.
• Include supporting evidence where available.

The goal is to make your situation understandable and credible without overcomplicating the statement.

2. Can I use the Streamlined Filing Compliance Procedures if I already paid all taxes?

Yes. The Streamlined Procedures are designed for taxpayers who:

• Non-willfully failed to report foreign financial assets.
• Have already paid taxes on those assets.
• Meet other IRS criteria, like filing all required returns and FBARs for the specified periods.

You must certify that your omission was not willful, and the IRS will review your case individually to confirm eligibility.

3. Difference Between Delinquent FBAR and Streamlined Filing Procedures

Understanding the distinction helps you choose the right approach:

1. Delinquent FBAR Submission Procedures

• For taxpayers who have already reported all income and paid taxes.
• No penalties are generally applied if the late filing was non-willful.

2. Streamlined Filing Compliance Procedures

• For non-willful taxpayers who did not report foreign financial assets or pay taxes.
• May involve a small penalty, like a 5% miscellaneous offshore penalty, depending on your situation.

The key difference is that the Delinquent FBAR program focuses solely on correcting FBAR omissions, while Streamlined Procedures covers broader foreign asset reporting issues.

4. Do I need a tax attorney to file late FBARs?

You are not required to hire one, but an attorney can:

• Ensure your filings are complete and accurate.
• Help prepare a strong Reasonable Cause Statement.
• Advise on the best IRS compliance program for your situation.
• Reduce the risk of mistakes that could lead to penalties.

Having professional guidance can make the process less stressful and more reliable.

5. My overseas bank closed. How do I reconstruct old account information?

When a bank no longer exists, you should collect any possible records:

• Old bank statements.
• Tax returns showing the account income.
• Emails or correspondence with the bank.
• Any supporting documents that prove account ownership.

Explain in your Reasonable Cause Statement the efforts you took to reconstruct the information. Transparency demonstrates your intent to comply and strengthens your position with the IRS.

6. What’s the latest on IRS enforcement of FBAR penalties?

The IRS remains active in enforcing FBAR rules. While non-willful violations carry penalties, programs like Delinquent FBAR Submission Procedures and Streamlined Procedures give taxpayers a path to compliance without fines. Acting quickly, filing accurately, and documenting your steps can significantly reduce risk and show good-faith effort.