Delinquent FBAR submission procedures: How to file late FBARs in 2026
Delinquent FBAR Submission Procedures (DFSP) allow US taxpayers to file overdue foreign account reports without maximum penalties. If you missed FBAR deadlines for accounts exceeding $10,000 aggregate, DFSP provides a compliance path with typically $0 penalties if you have reasonable cause.
This guide covers DFSP eligibility, acceptable reasons for late filing, filing procedures through the BSA E-Filing System, real scenarios, and what happens if the IRS contacts you first.
2026 key updates for delinquent FBAR filing
- DFSP available: IRS path for late FBAR filing with potential $0 penalties.
- 2026 penalties: $16,536 non-willful per report-year, $165,353 willful cap when assessed.
- Bittner ruling: non-willful penalties apply per report, not per account.
- Lookback period: file 6 years of delinquent FBAR reports to match the IRS six-year assessment window.
- Critical requirement: submit before the IRS contact to keep this relief lane open.
- Processing time: Many past-due prep-to-submit cycles land in the 4-8 week range.
What are the Delinquent FBAR Submission Procedures (DFSP)?
DFSP is an IRS procedure allowing taxpayers to file overdue FBARs without facing maximum penalties.
- You submit a late FBAR electronically through FinCEN’s BSA e-filing system.
- Add a reasonable cause statement that clearly explains the delay.
DFSP is designed for non-willful violations where foreign account income was properly reported on tax returns, but FBAR filing deadlines were missed.
NOTE! An FBAR – formally FinCEN Form 114 – is required when the combined value of foreign financial accounts exceeds $10,000 at any point during the calendar year. The rule applies to US persons, including citizens, residents, and certain entities.
The annual deadline is April 15, with an automatic extension to October 15. When those deadlines pass for one or more years, delinquent FBAR submission procedures provide the structured method for bringing the filings current.
Program benefits
- Primary benefit: Under delinquent FBAR submission procedures, the IRS states it will not impose an FBAR penalty when income was properly reported, and the IRS has not contacted you about an exam or delinquent returns.
- The process creates a straightforward path back into compliance without the shock of maximum penalty exposure for honest mistakes.
- Proactive filing signals good-faith cleanup and keeps the facts aligned with the IRS criteria for favorable treatment.
Eligibility quick check
You qualify for DFSP if:
- Didn’t file required FBARs for 1+ years, and the missing years can be submitted now through the e-filing system.
- Properly reported all foreign account income on tax returns, with any tax due paid.
- Not under IRS examination or investigation, so this stays in the voluntary correction lane.
- IRS hasn’t contacted you about delinquent FBARs, which is a key condition the IRS lists for this procedure.
- The eligibility profile matches an unintentional miss rather than intentional disregard.
- Unreported foreign income exists, so Streamlined is generally the better fit for correcting both tax returns and FBARs.
- IRS already contacted you, which removes this option from the table.
- Under examination, meaning this is no longer a simple late-filing cleanup.
Acceptable reasons for filing FBAR late
Acceptable reasons for late FBAR filing include lack of knowledge about requirements, reliance on incorrect professional advice, serious illness, natural disasters, or family emergencies. These constitute reasonable cause that may excuse penalties if properly documented in your DFSP submission
FinCEN treats a report as late filed when it’s submitted after October 15 of the year following the reporting year, and the e-file asks for a late-filing reason or an other explanation. IRS instructions for delinquent FBAR submission procedures also require a statement explaining why the FBARs are being filed late.
Common reasonable cause examples
1. Lack of knowledge about FBAR: Most common for expats and new filers
A clear lack of knowledge narrative lands best when it shows ordinary care once the requirement became known.
Example: I was unaware of FBAR requirements
As a US citizen working abroad, I reported all foreign income and paid taxes. I learned about FBAR in [year] when researching expat obligations and am now filing all delinquent FBARs.
Strong when: Recently moved abroad, hired a preparer who didn’t mention FBAR.
2. Reliance on incorrect professional advice: The tax preparer failed to mention FBAR
A professional advice explanation reads strongest when it names the role, the years covered, and the moment the gap was discovered.
Example: "My CPA prepared returns for [years] without mentioning FBAR requirements. I relied on professional advice and believed I was compliant. Upon consulting another professional in [year], I learned about FBAR."
3. Serious illness or medical condition: Hospitalization, chronic illness, mental health
Illness becomes compelling when the dates overlap the filing window and the statement sticks to verifiable facts.
Example: "I was hospitalized for [condition] from [dates] and unable to manage tax obligations during recovery."
4. Family emergency or death: Caring for an ill family member, estate administration
Must document the timeframe and relationship, and it becomes a strong cause when it overlaps with the filing period.
5. Natural disaster: Hurricane, fire destroyed records
A disaster-based explanation works best when it connects the event to missing documentation and shows the steps taken to reconstruct records and file promptly.
Evacuation from a foreign country must correspond with the missed filing period.
6. Misunderstanding threshold rules: Believed $10,000 per account, not aggregate
This misunderstanding is common, and the strongest version shows immediate correction once the aggregate rule is understood.
Example: "I believed each account had to exceed $10,000 individually. Upon learning the correct interpretation, filed immediately."
What doesn't qualify
- Financial difficulties or inability to pay rarely support a reasonable cause showing because FBAR filing is a reporting obligation separate from payment.
- Didn’t think it applied without a specific reason reads as a weak FBAR late filing excuse because it lacks concrete facts and documentation.
- Simply forgetting without circumstances usually fails because the explanation doesn’t show ordinary business care or good-faith effort.
- Disagreement with FBAR law is not a filing defense and does not establish penalty relief under IRS standards.
How to file delinquent FBARs: Step-by-step guide
Filing delinquent FBARs requires completing FinCEN Form 114 for each missed year, preparing a reasonable cause statement, and submitting electronically through the BSA E-Filing System. Process takes 2–4 hours per year, depending on account complexity.
Step-by-step filing process
Step 1: Determine years needing filing
Accurate year identification is the foundation of a clean submission, so take time to confirm exactly which calendar years triggered an FBAR requirement before starting the forms.
- Review at least the most recent six years, since Treasury generally has a 6-year civil assessment period for FBAR penalties, then add any earlier required but unfiled years if applicable.
- Identify each year in which the aggregate maximum value of foreign financial accounts exceeded $10,000 at any time during the calendar year.
- Gather supporting data for each year: bank statements showing the highest balances, account opening and closing dates, foreign bank names and addresses, and account numbers or other designations.
Step 2: Register for BSA E-Filing
Open FinCEN’s BSA e-filing portal and choose the File FBAR as an Individual path, which satisfies the obligation through the no registration option when filing personally.
A logged-in account is mainly for institutions and practitioners; personal filers can still enter an email address for acknowledgements (and create a password to receive the BSA Identifier number), then keep that email thread organized because it becomes part of the audit-ready trail.
Step 3: Complete Form 114 for each year
Each delinquent year must stand on its own, so treat every calendar year as a separate filing under the official how to file framework.
- File a separate FinCEN Form 114 for each year, since the system does not allow multiple years to be combined into one submission.
- Report all foreign financial accounts required to meet the $10,000 aggregate threshold for that specific year.
- Enter maximum values in US dollars using the exchange rate on the last day of the calendar year, commonly based on Treasury Reporting Rates of Exchange.
- Include complete details for each account: account number, financial institution name and address, and account type, ensuring no required fields are left incomplete.
Step 4: Prepare a reasonable cause statement
The written explanation is central to delinquent FBAR submission procedures because IRS guidance requires a statement explaining why the FBARs are late.
- Provide a clear timeline explaining why the requirement was missed and when the obligation was discovered.
- Confirm that all related income was properly reported on the corresponding tax returns and that any tax due was paid.
- Keep the explanation to one or two specific, factual paragraphs and avoid vague language.
NOTE! Use a concise structure such as: Filing delinquent FBARs for [years]. Unaware of the requirement because [specific reason]. Learned on [date] through [source]. Reported all income on tax returns. Filing to achieve compliance.
Step 5: Submit electronically
The filing process stays consistent year after year: submit each year’s FBAR through the BSA E-Filing interface, select a late-filing reason on the cover page, and use other with a written explanation when the preset reasons do not fit.
After processing, FinCEN assigns a 14-digit BSA Identifier, often beginning with 310000, that appears in the acknowledgement email, so saving the confirmation PDFs and that email message set is part of the compliance package.
Step 6: Maintain records
Treat record retention as the final step in delinquent FBAR procedures: keep the filed FBARs, the explanation text, and the acknowledgements, plus the account documentation that supports maximum values and account identification.
Records are generally kept for five years from the FBAR due date of April 15 of the following year, and the retained file should include the account name, number, institution name and address, account type, and maximum value.
Real delinquent FBAR scenarios and outcomes
These examples show common delinquent FBAR situations and how DFSP applies. All details are illustrative.
Example 1: US expat – employment account
Sarah moved to the UK in 2020 and kept a Barclays salary account that peaked at £45,000 (about $58,000). She filed US tax returns, reported account income, and paid any tax due, but missed FBARs and has not been contacted by the IRS about them.
Action: file FBARs for 2020–2025 and include a statement explaining the late filing due to lack of knowledge as a new expat.
Outcome: The IRS states it will not impose an FBAR penalty when the DFSP criteria are met.
Example 2: Inherited foreign account
Michael is a US resident who inherited a Swiss account in 2019 that reached CHF 85,000 (about $95,000). He reported the interest on his US returns and paid any tax due, but did not realize an FBAR was required and has not been contacted by the IRS about the missing FBARs.
Action: file FBARs for 2019–2025 with a statement explaining the late filing due to inheritance and lack of knowledge; the outcome follows DFSP when the IRS criteria are satisfied.
Example 3: Investment account, CPA mistake
Jennifer held a Canadian brokerage account with a peak value of CAD 125,000. Dividends were reported on her US returns, and foreign tax credits were claimed, but her CPA never raised FBAR filing for five years, and the IRS has not contacted her about delinquent FBARs.
Action: file the missing FBARs and include a statement explaining late filing due to reliance on a tax professional; outcome fits DFSP when all IRS conditions are met.
Example 4: Multiple small accounts
David had four German accounts totaling €18,500 (about $20,000) at their highest point. He thought the $10,000 threshold applied per account rather than in aggregate, reported any account income on his US return, and has not been contacted by the IRS about FBARs.
Action: file the required FBAR years and include a statement explaining the late filing due to misunderstanding the aggregation rule; outcome tracks DFSP when eligibility criteria are met.
Example 5: NOT eligible
Robert maintained an offshore account that peaked at $150,000 and had $15,000 of unreported income tied to the account. DFSP is not the right path because the IRS frames it for taxpayers who do not need delinquent or amended returns to report and pay additional tax.
Alternative: streamlined filing compliance procedures for non-willful facts, or IRS Criminal Investigation voluntary disclosure practice for willful or high-risk facts.
NOTE! DFSP only for properly reported income.
What if the IRS contacts you about delinquent FBARs?
If the IRS contacts you about delinquent FBARs before you file, you cannot use DFSP. Once under examination or after IRS notification, you must respond through the examination process. This is why proactive filing before IRS discovery is critical.
Your options after IRS contact
If you receive IRS Letter 3800 or FBAR notice:
- Respond within the timeframe (usually 30 days)
- File missing FBARs immediately
- Submit a reasonable cause statement
- Penalty assessment at examiner's discretion (NOT automatic waiver)
May face $0 to maximum penalties if under examination:
- Cannot use DFSP or Streamlined
- Work with the assigned examiner
- Argue reasonable cause during examination
- Professional representation is strongly recommended
Why proactive filing matters:
-
File before IRS contact = DFSP access with likely $0 penalties
- File after IRS contact = examination with uncertain outcome
Recommendation: File immediately when you discover non-compliance.
Common mistakes when filing delinquent FBARs
Common delinquent FBAR mistakes include incomplete account reporting, incorrect valuations, weak reasonable cause statements, and filing the wrong years. These errors delay processing or trigger penalties.
- Not filing all 6 years: IRS expects a 6-year lookback for DFSP. Filing only 1-2 recent years leaves exposure.
- Missing reportable accounts: Commonly missed are foreign pensions, business accounts, signature authority accounts, and accounts closed mid-year. Must report all contributions to the $10,000 aggregate threshold.
- Incorrect maximum values: Use the highest balance during the year, not the year-end. Convert using Treasury Dec 31 rates for that year. Review all 12 months of statements.
- Weak reasonable cause: Generic "I forgot" is insufficient. Must be specific with dates, circumstances, and timeline.
- Paper filing attempt: All FBARs must be filed electronically through BSA E-Filing since 2013. Paper forms are not accepted for delinquent filings.
- No confirmation records: Save BSA confirmation PDFs - only proof of filing. Retain 5+ years with supporting documents.
FBAR penalties: What you need to know
FBAR penalties depend on willful vs non-willful violations.
- Non-willful: up to $16,536 per year (2026).
- Willful: greater of $165,353 or 50% of balance.
- IRS can impose civil and criminal penalties for willful cases. DFSP with reasonable cause typically results in $0 penalties.
The numbers matter, but context matters more. Penalties are assessed under 31 U.S.C. 5321 and adjusted annually for inflation. For penalties assessed in 2026, the civil maximums reflect FinCEN’s current inflation adjustments.
2026 penalty table
| Penalty type | 2026 amount | When applied | Waivable |
|---|---|---|---|
| Non-willful | Up to $16,536 per annual report | Negligence, inadvertence, lack of knowledge | Yes, with reasonable cause |
| Willful | Greater of $165,353 or 50% of account balance | Intentional conduct, reckless disregard, willful blindness | Rarely |
| Criminal | Up to $250,000 and 5 years in prison Up to $500,000 and 10 years if combined with certain violations |
Egregious conduct, often involving tax evasion or other crimes | No |
Civil willful penalties can reach 50% of the account balance per violation. Criminal penalties apply in more extreme cases and require prosecution by the Department of Justice.
Bittner context
- 2023 Bittner v. United States ruling: Non-willful penalties apply per annual report, not per account.
- Significantly reduced exposure for multiple accounts.
- Previous IRS interpretation allowed stacking per account, which could result in millions for a single year.
- Under Bittner: maximum $16,536 per year for non-willful, not per account.
This decision reshaped non-willful exposure. One missed year with ten accounts is treated as one violation for penalty cap purposes, not ten.
Willful vs non-willful
-
Non-willful: Negligence, inadvertence, mistake.
Examples: Didn't know the requirement, misunderstood the threshold, relied on wrong advice, illness. - Willful: Intentional failure, reckless disregard, willful blindness. IRS must prove willfulness.
NOTE! Most DFSP cases are non-willful with $0 penalties when reasonable cause is approved. In practice, the distinction drives everything.
Non-willful cases with documented reasonable cause and proper use of delinquent FBAR submission procedures commonly result in no penalty. Willful cases carry materially higher financial and legal risk and require careful handling.
Alternative programs if you don't qualify for DFSP
If you don't qualify for DFSP due to unreported income or IRS contact, two alternatives exist:
- Streamlined Filing Compliance Procedures (for non-willful with unreported income) and
- Voluntary Disclosure Practice (for willful violations).
Streamlined Filing Compliance Procedures
- For: Unreported foreign income, non-willful
- Requirements: 3 years tax returns + 6 years FBARs, non-willful certification
- Penalty: 0% (Domestic) or 5% (Foreign) of the max balance
- Eligibility: Not under examination, no IRS contact
- Timeline: 6-12 months
- Best if: Missed reporting foreign investment income, pensions, or wages
Voluntary Disclosure Practice
- For: Willful violations, criminal concerns
- Requirements: All years disclosed, all taxes paid, detailed narrative
- Penalty: Negotiated, typically 50% of max balance
- Benefit: Criminal prosecution protection
- Timeline: 12-24+ months
- Best if: Intentional non-compliance, hiding assets
Quick comparison table
When weighing alternatives, clarity around income reporting and risk level drives the decision.
| Factor | DFSP | Streamlined | VDP |
|---|---|---|---|
| Unreported income | No | Yes | Yes |
| Penalty | $0 typical | 0–5% offshore penalty (5% domestic; 0% foreign) | 50% typical civil fraud framework |
| FBARs | 6 years | 6 years | Generally, 6 years (may expand based on facts) |
| Tax returns | Current must be accurate | 3 amended years | Typically, 6 years amended or filed |
| Processing | 4–8 weeks typical acknowledgement | 6–12 months common | 12–24 months common |
| After the IRS contact | No | No | Maybe, depending on timing and facts |
NOTE! Choose DFSP if income is reported. Streamlined if unreported income + non-willful. VDP if willful or criminal concerns.
File your delinquent FBARs with confidence
Delinquent FBAR filing checklist:
- Properly reported income on tax returns
- File BEFORE IRS contacts you
- 6 years of delinquent FBARs
- Reasonable cause statement prepared
- BSA E-Filing System registration
- Documentation ready (statements, dates)
- Target: $0 penalties with DFSP approval
- Timeline: File proactively, don't wait
Filing delinquent FBARs through DFSP provides a path to compliance without heavy penalties. Proactive filing with proper documentation typically results in a penalty waiver for non-willful violations.
Need help filing delinquent FBARs? Taxes for Expats has filed 5,000+ delinquent FBARs with a high penalty waiver success rate. Our CPAs prepare reasonable cause statements and handle complete DFSP filings.
Frequently asked questions about delinquent FBAR filing
File every year, an FBAR was required and not filed. A six-year lookback is common because Treasury generally has six years from the FBAR due date to assess civil FBAR penalties, so reviewing at least the most recent six years helps close the main exposure window.
Not typically under IRS delinquent FBAR submission procedures when the conditions are met. The IRS says it will not impose a penalty for failure to file the delinquent FBARs when all account income was properly reported and paid, and the filer has not previously been contacted about an examination or delinquent returns for those years.
A written explanation of why the FBARs are being filed late should be submitted with the late FBAR filing. The IRS instructs including a statement explaining the late filing, and the BSA e-filing form requires selecting a late-filing reason. A strong, reasonable cause narrative stays specific: dates, circumstances, and the compliance steps taken.
No. FinCEN allows individuals to satisfy the FBAR filing obligation directly through the no-registration option in the BSA E-Filing System. Professional help becomes more useful when another offshore compliance option is needed, such as streamlined procedures or voluntary disclosure, because those involve additional filings and certifications.
No official DFSP processing timeline is published. FinCEN provides an electronic acknowledgement when the FBAR is submitted, while the IRS notes that late FBARs are not automatically audited but may be selected through normal processes. Follow-up only happens when additional questions arise.
No. IRS delinquent FBAR submission procedures apply only when there has been no IRS contact about the delinquent FBARs and the filer is not under civil examination or criminal investigation. Once contact occurs, the issue is handled through the examination or enforcement process.
DFSP fits late FBARs when tax returns are already correct, and no additional tax is due. Streamlined procedures are designed for non-willful failures to report all income, pay all tax, and submit required information returns (including FBARs), and they require a non-willful certification.
No, not when the original tax returns already reported all income from the foreign accounts and all tax was paid. DFSP is for late FBARs only. When returns need correction to report additional income, IRS guidance points toward streamlined procedures or other compliance options.
Often yes, when the pension or retirement arrangement is a foreign “financial account,” and the aggregate value of all foreign accounts exceeds $10,000 at any time during the year. IRS Publication 5569 gives examples of reportable foreign retirement-type accounts, including Canadian RRSP and TFSA, and certain Mexican retirement accounts.
