IRS FBAR Penalty

Author Claudia Gantt on December 8, 2022

Fact checked by David J. Allen

All of the information on this page has been reviewed and certified by a tax professional.

What is FBAR Penalties

The FBAR is a FinCEN Form. FinCEN is the Financial Crimes Enforcement Network. The FBAR (aka FinCEN Form 114) is covered under Title 31 (Money and Finance) of the US code and not Title 26 (Internal Revenue Code).

The primary goal of the FBAR is to minimize money laundering and other financial crimes by requiring US persons with certain ownership, co-ownership, or signature authority over foreign accounts to report the account information to the US government each year on the annual FBAR — nothing to do with tax.

The form is required to be filed at the same time that a taxpayer files a tax return. Even if a person does not have to file a Tax Return, they may still have to file an FBAR.

31 USC 5321 et seq. Civil FBAR Penalties: Willful or Non-Willful

What Are The Penalties?

The FBAR range for violations of foreign account reporting compliance is as follows:

  • warning letter in lieu of penalty;
  • a $10,000 penalty that encompasses all the violations for all years;
  • a $10,000 per year; or
  • a $10,000 penalty per violation per year.*

*The $10,000 penalty per violation per year caps at 50% value of the account values (see IRM).