Introduction
If you missed the deadline to file your Foreign Bank Account Report (FBAR), do not panic. The Delinquent FBAR Submission Procedures offer a way to correct this mistake without facing penalties.
Many taxpayers are unaware of their FBAR filing requirements or encounter unexpected circumstances that cause a delay in filing. Fortunately, if you meet the eligibility criteria, you can file late FBARs without penalties.
This guide explains who qualifies, how to submit a late FBAR, and what you need to know before applying.
What Are the Delinquent FBAR Submission Procedures
The Delinquent FBAR Submission Procedures are an amnesty program that allows taxpayers to file late FBARs without penalties. This process is available for individuals who:
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Failed to file an FBAR unintentionally and not as an act of willful avoidance.
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Do not owe additional taxes on their foreign income.
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Have not been contacted by the IRS regarding their missing FBARs.
By following this process, eligible taxpayers can correct their oversight and stay compliant without incurring financial penalties.
Who Qualifies for the Delinquent FBAR Submission Procedures
To be eligible, you must meet these conditions:
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You have not been contacted by the IRS about your missing FBARs.
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You reported all foreign income on your US tax returns.
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You paid all required taxes related to your foreign income.
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Your failure to file was unintentional and not due to willful neglect.
If you do not meet these requirements, you may need to explore other FBAR amnesty options.
How to File a Late FBAR Using Delinquent FBAR Submission Procedures
If you qualify, follow these steps to file your late FBAR correctly.
Step 1: Confirm Your Eligibility
Ensure you meet all eligibility criteria, including that you do not owe additional taxes and have not been contacted by the IRS. If you are uncertain, consult a tax professional.
Step 2: Prepare Your Late FBARs
You must submit up to six years of prior-year FBARs (FinCEN Form 114) through the BSA E-Filing System.
The required information includes:
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Bank account details such as account numbers, financial institution names, and addresses.
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Maximum account balances for each year.
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Personal identifying details, including name, Social Security Number, and address.
Step 3: Write a Reasonable Cause Statement
A reasonable cause statement explains why you did not file on time. This explanation is essential because the IRS reviews it before granting penalty relief.
Your statement should include:
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A clear explanation of why you missed the deadline.
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Confirmation that all foreign income was reported on your tax return.
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Assurance that all taxes related to the income were paid.
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A commitment to complying with FBAR filing requirements in the future.
Step 4: Submit Your Late FBARs Online
Once your FBARs and reasonable cause statement are ready:
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Go to the BSA E-Filing System.
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Select the option to file a late FBAR.
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Upload the FBAR forms for each delinquent year.
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Attach your reasonable cause statement.
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Submit and save the confirmation message for your records.
Acceptable Reasons for Filing the FBAR Late
Your reasonable cause statement must provide a valid explanation for the delay. Some acceptable reasons include:
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Lack of knowledge about the FBAR requirement despite making reasonable efforts to comply with tax laws.
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Incorrect professional advice from a tax expert who failed to inform you of the requirement.
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Health issues or serious medical conditions that prevented timely filing.
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Natural disasters or catastrophic events that disrupted filing.
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Family emergencies or personal crises that impacted the ability to file on time.
If you need help drafting your reasonable cause statement, a tax professional can assist in ensuring it meets IRS expectations.
Alternative FBAR Amnesty Programs
If you do not qualify for the Delinquent FBAR Submission Procedures, consider these other amnesty programs.
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Streamlined Filing Compliance Procedures: For non-willful taxpayers who owe additional tax on their foreign income. This requires amended tax returns in addition to late FBAR filing.
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Delinquent International Information Return Submission Procedures: For taxpayers who failed to file other offshore tax forms, such as FATCA Form 8938 or Form 3520.
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Voluntary Disclosure Program: For taxpayers whose FBAR violations were willful. This is the only program that can help avoid criminal tax charges.
Selecting the wrong program can lead to penalties, so consulting a tax professional is recommended.
Consequences of Failing to Correct Late FBARs
Failure to correct delinquent FBAR filings can lead to severe penalties.
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Non-Willful Violations: Fines up to ten thousand dollars per violation, per account, per year.
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Willful Violations: Penalties up to fifty percent of the account balance or one hundred thousand dollars per violation.
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Additional Risks: Increased IRS audit scrutiny and potential asset seizure for continued noncompliance.
It is best to resolve FBAR issues before the IRS contacts you to avoid these consequences.
Conclusion
Filing an FBAR late does not have to result in severe penalties if you take action through the Delinquent FBAR Submission Procedures. This process allows eligible taxpayers to correct their mistakes without fines. However, filing incorrectly or using the wrong amnesty program can result in penalties.
If you need help filing a late FBAR or determining which program best fits your situation, consult a tax professional. Proper guidance can ensure compliance and peace of mind while avoiding costly IRS penalties.
Block3 Finance guides UK investors through the 2025 Delinquent FBAR submission process. Ensure accurate reporting and avoid penalties with expert support.
If you have any questions or require further assistance, our team at Block3 Finance can help you.
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