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FBAR penalties come in two tiers. Non-willful violations run $16,536 per late report at the current inflation-adjusted rate, applied per report, not per account, under Bittner v. United States. Willful violations reach the greater of $165,353 or 50 percent of the account balance. The IRS has six years from each report’s due date to assess either one.
Those numbers are ceilings, not certainties. Penalties are asserted after review, and most late filers who move first through the right correction lane never pay one.
The rules reach anyone whose foreign accounts crossed a $10,000 aggregate at any point in a year: expats, immigrants, dual citizens, and plenty of stateside owners of an old account back home.
Here is how each tier works, what Bittner changed, how the six-year clock runs, and what to do if you are behind.
What Are the Penalties for Not Filing an FBAR?
The Bank Secrecy Act sets two tiers under 31 U.S.C. 5321(a)(5), and conduct decides which one applies. Non-willful means you did not know and did nothing to avoid knowing. Willful covers knowing failures and reckless ones. The reporting rules themselves sit on the IRS FBAR page.
Both figures index for inflation, so the statutory $10,000 and $100,000 baselines are history. The table shows where the numbers stand now.
| Factor | Non-Willful | Willful |
| Statutory base | $10,000 per violation, indexed | Greater of $100,000, indexed, or 50 percent of the balance |
| Current adjusted amount | $16,536 | Greater of $165,353 or 50 percent of the balance |
| Unit of violation | Per report, per year (Bittner) | Per account, per year |
| Defense | Reasonable cause, balances properly reported | Conduct fight, no reasonable cause exception |
| Measurement | $99,216 across six late reports | Near 100 percent of the highest aggregate balance in practice |
Neither penalty is self-executing. Assessment takes an examination, a computation, and signatures, which is why the sequence of your own moves matters as much as the published numbers.
One more tier exists on paper: criminal exposure for willful violations, which runs on its own clock and its own standard. If that word is in play, representation comes before any filing.
As I tell every client staring at this table: “FBAR penalties are a range, not a rate. Where you land inside that range is decided by your conduct, your records, and your first move after finding the problem. Two of those three are still in your control.”
What Is the Non-Willful FBAR Penalty?
$16,536 per violation at the current adjusted rate, and after Bittner v. United States, 598 U.S. 85 (2023), a violation means one late report, not one account. The government had sought $2.72 million from Alexandru Bittner, $10,000 for each of 272 accounts across five late reports. The Supreme Court cut it to $50,000, one penalty per report.
The statute also carves out reasonable cause. A non-willful penalty does not apply where the failure had reasonable cause and the balances are properly reported once filed. The reasons that hold up follow patterns, and documentation decides them.
Below the maximum, examiners also have room to move. IRS mitigation guidelines let agents assess less than the ceiling where balances were modest and cooperation was clean, one more reason the opening computation is a position, not a verdict.
Case study: A physician under examination came to Ed Parsons CPA with two accounts and six unfiled years. The agent’s first computation ran the old per-account math: twelve violations, $198,432 proposed. We reframed it under Bittner to six reports, $99,216, then documented reasonable cause year by year. Four of the six were conceded. The exam closed at $33,072, about one sixth of the opening number.
What Is the Willful FBAR Penalty?
The greater of $165,353 or 50 percent of the balance in each unreported account, for each year. Because the 50 percent attaches per account, willful penalties stack in a way non-willful ones no longer can.
Across six open years, stacked willful penalties can pass the value of the accounts themselves. IRS guidance generally holds the total near 100 percent of the highest aggregate balance, but that is examiner discretion, not statute.
Run one account at $400,000 through three willful years and the arithmetic is $200,000 per year, $600,000 in total, against a $400,000 account. That is how the cap conversation starts, and why willful files are negotiated, not calculated.
Willfulness is not limited to intent. Courts have stretched it to reckless disregard and willful blindness, including checking No on Schedule B’s foreign account question. Where your conduct actually sits on the willful or non-willful line is its own analysis, and it is the highest-stakes call in this area.
What Is the FBAR Statute of Limitations?
Six years. Under 31 U.S.C. 5321(b)(1), the IRS must assess an FBAR penalty within six years of the violation, and the violation date is the report’s filing due date, April 15 with the automatic extension to October 15.
Two features make this clock unusual. It runs whether or not you ever file, unlike the tax return statutes that stay open on unfiled international forms. And each year is its own violation with its own six-year clock, so the window rolls: every due date that passes adds a fresh year of exposure on one end while an old year falls off the other.
The rolling window cuts both ways. A year that has aged past six is closed to assessment entirely, so an account shut long ago may carry no live exposure at all. Mapping which years are open is the first concrete step in any FBAR cleanup.
Once a penalty is assessed, 31 U.S.C. 5321(b)(2) gives the government two years to bring a collection suit. During an examination, agents routinely request consent to extend the clock, and that is a decision to make with representation, not by reflex.
How Do You Avoid FBAR Penalties If You Are Behind?
By choosing the correction lane your facts support before the IRS chooses for you. If every dollar of foreign income was already reported and taxed, the delinquent FBAR submission procedures close all six open years free, with no penalty. Preparing the reports is what the Form 114 FBAR CPA Filing service covers.
If income went unreported, streamlined filing is the repair: amended returns, six FBARs, and a certification, at 5 percent domestic or 0 percent foreign through the Streamlined Filing CPA Package. The program terms sit on the IRS streamlined procedures page.
The full decision tree for late FBARs walks the fork, including the branch where neither program fits. Both lanes share one clock of their own: they are only open before the IRS makes contact. An exam letter closes the delinquent door and narrows the streamlined one.
My Take After 17 Years of FBAR Penalty Files
The industry does two things with these numbers. It quotes the willful figure at frightened non-willful people to sell heavy programs, and it lets forum advice whisper that a six-year statute means waiting is a plan. Both misread the same fact: penalties follow conduct and sequence, and waiting is itself conduct. Every due date that passes adds a fresh violation to the pile.
The underrated feature of the six-year window is that it makes exposure finite and mappable. Six reports, known balances, two published rates. You can compute your worst case to the dollar in an afternoon, and a known number is easier to fix than a feared one.
If I were the reader, I would map the six-year exposure today, run the lane decision honestly, and move before the first IRS letter turns options into positions. At Ed Parsons CPA, IRS account work is the core of the practice.
