Topic · FBAR
FBAR Penalties: Non-Willful vs Willful, and What Reduces Them
The current FBAR civil penalty ceilings — $16,536 per report for a non-willful violation, the greater of $165,353 or 50% of the balance for a willful one — what Bittner changed, why the ceiling is not the bill, and the routes that bring a missed FBAR back into compliance.
By Danilson Ramos · Founder, Atamatax
Updated November 2026
Direct answer
What is the penalty for not filing an FBAR?
For a non-willful failure, the civil penalty is capped at $16,536 per missing or late annual FBAR — per report, not per account (Bittner v. United States, 2023). For a willful failure, the cap is the greater of $165,353 or 50% of the account balance at the time of the violation.
Both are ceilings the IRS may impose, not amounts it must: FBAR penalties are discretionary, the reasonable-cause exception can eliminate a non-willful penalty, and the Internal Revenue Manual tells examiners not to assert one where the failure was non-willful, due to reasonable cause, and the account is properly reported on the late FBAR. The amounts are the 2025 inflation-adjusted figures, which still apply through 2026 because the 2026 adjustment was cancelled (OMB memo M-26-11).
- Last verified
What changes the answer
- The annual inflation adjustment under 31 CFR §1010.821 (the 2027 cycle is expected to run normally)
- 31 U.S.C. §5321(a)(5) is amended
- IRM 4.26.16 (FBAR penalties) is revised
Next step: Check my catch-up options
Check it for your own accounts
Do you need to file an FBAR?
Three questions, no balances typed, no email. The read explains the aggregate rule — the part most people get wrong — and what would settle the rest.
Free, no account, nothing you answer leaves this page. Open the full FBAR / Form 8938 checker
A threshold screen, not a filing determination. Three answers cannot establish whether a specific account is reportable; the full checker and the account's own terms can.
The FBAR penalty is a Bank Secrecy Act civil penalty (31 U.S.C. §5321(a)(5)), enforced by the IRS under authority delegated by FinCEN. It attaches to the report, not to tax: it can apply even when you owe no US tax at all, which is exactly the position most Americans abroad are in. Below are the current ceilings, how the courts count them, and what actually decides where a case lands.
The current FBAR penalty amounts
| Violation | Maximum civil penalty (2025 amounts, still current in 2026) | How it is counted |
|---|---|---|
| Non-willful | $16,536 | Per annual report, not per account (Bittner v. United States, 2023) |
| Willful | The greater of $165,353 or 50% of the balance at the time of the violation | Measured against the account balance; willfulness is a finding on your facts |
| Criminal | Separate criminal provisions (fines and imprisonment) | Prosecuted cases only — this is a tax attorney's question, not a preparer's |
Per report, not per account: what Bittner changed
Before 2023 the government argued that the non-willful penalty applied to every account a report should have listed — so five accounts missed for four years could be read as twenty violations. In Bittner v. United States (2023) the Supreme Court held that the non-willful penalty applies per report: one missing or deficient annual FBAR is one violation, however many accounts it should have listed. The willful penalty is written differently — the statute measures it against the balance in the account — so it still scales with the accounts and what was in them.
Non-willful or willful — what decides it
Non-willful covers negligence, inadvertence and good-faith misunderstanding: not knowing the FBAR existed, or believing that a pension, a joint account or a fintech wallet did not count. Willful means a voluntary, intentional violation of a known duty, and some courts have extended it to reckless disregard of an obvious risk. The label is a legal finding on your facts — and it decides both the ceiling and which catch-up route is open to you.
- Knowledge — whether you knew, or had reason to know, that foreign accounts had to be reported (some courts have weighed the foreign-account question on the tax return you signed).
- The income — whether the income from the accounts was reported and taxed on your returns.
- The accounts — how they were held, and whether anything was structured or concealed.
- Your conduct since — what you did once you learned of the duty.
Reasonable cause, and why the ceiling is not the bill
The non-willful penalty has a statutory reasonable-cause exception (31 U.S.C. §5321(a)(5)(B)(ii)): no penalty applies where the violation was due to reasonable cause and the balance in the account was properly reported. Beyond that, the penalty is discretionary — the statute says the Treasury may impose it — and the Internal Revenue Manual (IRM 4.26.16) tells examiners how to use that discretion, including not asserting a penalty for an account where the failure was non-willful, due to reasonable cause, and the account is properly reported on the late FBAR.
How a missed FBAR comes back into compliance
| Your situation (broad) | Usual route | Penalty position |
|---|---|---|
| Returns filed and the account income reported — only the FBARs were missed | Late FBAR filing with a reasonable-cause statement | Discretionary; reasonable cause is what an examiner tests |
| FBARs missed and income unreported or returns unfiled; non-willful; living abroad | Streamlined Foreign Offshore Procedures | Miscellaneous offshore penalty of 0% for an eligible taxpayer who certifies non-willfulness; tax and interest still due |
| Facts that may be willful | Voluntary disclosure, through counsel | Set by the IRS framework — take legal advice before filing anything |
The Streamlined route is a conditional one: it requires non-willful conduct, a non-residency test for the foreign version, and a signed certification (Form 14653). The domestic version for US residents carries a miscellaneous offshore penalty that the foreign version does not. The Streamlined procedures are closed to you once the IRS has opened a civil examination of your returns for any year — whether or not it concerns foreign accounts — or while IRS Criminal Investigation is investigating you. An ordinary IRS notice is not an examination and does not by itself close them, but read any IRS letter before filing: some letters open an examination.
Other penalties that often arrive with a missed FBAR
A missed FBAR rarely travels alone. The same accounts and investments often require tax-return information forms with penalties of their own — assessed under the Internal Revenue Code rather than the Bank Secrecy Act, and due whether or not any tax is owed:
| Form | Penalty for not filing | Read more |
|---|---|---|
| Form 8938 (FATCA) | $10,000, plus up to $50,000 more for continued failure after IRS notice ($60,000 maximum) | Form 8938 · FBAR vs Form 8938 |
| Form 5471 (foreign corporation) | $10,000 per form, per tax year | Form 5471 |
| Form 3520-A (foreign trust with a US owner) | the greater of $10,000 or 5% of the gross value of the trust assets treated as owned by the US person | Forms 3520 and 3520-A |
Where a required information return such as Form 8938, Form 5471 or Form 8621 was never filed, the assessment period for the return can stay open (IRC §6501(c)(8)) — with a narrower rule where the failure was due to reasonable cause. And where tax itself was unpaid, the failure-to-file addition is 5% of the unpaid tax per month, capped at 25%.
Missed FBARs and unsure which route fits?
The free eligibility check sorts a missed FBAR into the route that fits — late filing with a reasonable-cause statement, Streamlined, or a case for an attorney. Atamatax provides preparation support; this is not individualized tax or legal advice.
Authorities cited
- 31 U.S.C. §5321 — 31 U.S.C. §5321 — Civil penalties for FBAR violations (§5321(a)(5))
- 31 CFR §1010.821 — 31 CFR §1010.821 — Penalty adjustment table (annual inflation adjustments to BSA civil penalties)
- OMB Memorandum M-26-11 — OMB Memorandum M-26-11 — cancellation of federal civil-penalty inflation adjustments for 2026
- Bittner v. United States (2023) — Bittner v. United States, 598 U.S. 85 (2023) — the non-willful FBAR penalty applies per report, not per account
- IRM 4.26.16 — Report of Foreign Bank and Financial Accounts (FBAR) — IRM 4.26.16.3.11 Delinquent FBAR Filing Procedures and 4.26.16.5 FBAR Penalties — the examiner standard: no penalty asserted where non-willful, reasonable cause, and the account is properly reported on the late FBAR
- IRS — Report of Foreign Bank and Financial Accounts (FBAR), "Filing delinquent FBARs" — IRS FBAR page, "Filing delinquent FBARs": file late FBARs as soon as possible with the reason for filing late (page reviewed 30 Jul 2026)
- FinCEN Form 114 (FBAR) — Report of Foreign Bank and Financial Accounts (FBAR)
- IRS Streamlined Foreign Offshore Procedures — U.S. Taxpayers Residing Outside the United States — Streamlined Foreign Offshore Procedures
- IRS Criminal Investigation Voluntary Disclosure Practice — IRS Criminal Investigation Voluntary Disclosure Practice — the route for taxpayers whose conduct was willful (Form 14457)
- IRC §6038D — IRC §6038D — Information reporting of specified foreign financial assets (Form 8938)
- IRC §6038 — IRC §6038 — information reporting with respect to certain foreign corporations and partnerships
- IRC §6677 — IRC §6677 — Failure to file information with respect to certain foreign trusts
- IRC §6501(c)(8) — IRC §6501(c)(8) — Limitations period stays open until certain information returns (incl. Form 8621) are filed
Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.
Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.