FBAR & IRS Streamlined Filing ComplianceA Clear, Calm Path Back to U.S. Tax Compliance
Did not know you had to report your foreign bank accounts? You are not alone — and you are probably not in serious trouble. We specialize in helping non-willful taxpayers come back into compliance through the IRS Streamlined Procedures, with no judgment and complete discretion.
If you are a U.S. person with foreign financial accounts — a bank account in Spain, an investment account in Portugal, a pension in the UK — you may be required to file an FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114). Many Americans discover this requirement only after years of non-compliance.
The FBAR is not filed with the IRS. It is filed electronically with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. The threshold is deceptively simple: if the aggregate value of your foreign financial accounts exceeded $10,000 at any point during the calendar year, you must file. But the rules around what counts, when it is due, and what happens if you do not file are more nuanced.
Beyond FBAR, FATCA (the Foreign Account Tax Compliance Act) requires U.S. taxpayers to report specified foreign financial assets on Form 8938, attached to their annual tax return. FATCA thresholds are higher, but the penalties are severe — and FATCA applies to a broader range of assets than FBAR.
At Lizo Tax Consulting, we have helped many clients come back into compliance through the IRS Streamlined Filing Procedures — a program specifically designed for taxpayers whose failure to file was non-willful. This guide will walk you through every aspect of FBAR, FATCA, and getting compliant safely.
Key Insight
The IRS distinguishes between willful and non-willful FBAR violations. If you genuinely did not know about the requirement — which is extremely common — you are likely eligible for the Streamlined Procedures, which can reduce or eliminate penalties entirely. Coming forward voluntarily is always better than waiting to be discovered.
What Is FBAR and Who Must File?
The FBAR is one of the most commonly missed U.S. tax obligations. Here is what every taxpayer with foreign accounts needs to understand.
Who Must File
Any U.S. person — citizen, resident, green card holder, or entity — who had a financial interest in or signature authority over foreign financial accounts with an aggregate value exceeding $10,000 at any point during the calendar year.
When It Is Due
The FBAR is due April 15, with an automatic extension to October 15. It is filed electronically through the BSA E-Filing System — not with your tax return. Missing the deadline without an extension can trigger penalties.
What Must Be Reported
Foreign bank accounts, savings accounts, checking accounts, brokerage accounts, mutual funds, trust accounts, and pension accounts held at foreign financial institutions. The $10,000 threshold applies to the aggregate value across all accounts, not per account.
Signature Authority
Even if you do not own the account, you must file an FBAR if you have signature authority over a foreign account. This commonly applies to business owners with access to corporate accounts, trustees, and officers of nonprofits.
What Is a Foreign Account
An account is "foreign" if it is located outside the United States. Accounts at foreign branches of U.S. banks are foreign. Accounts at U.S. branches of foreign banks are not. This distinction trips up many taxpayers.
Joint Accounts
If you hold a joint account with a non-U.S. person, you must report the full value of the account on your FBAR. There is no 50% allocation — the full balance counts toward your $10,000 threshold.
A Common Misconception
Many taxpayers believe that if they paid taxes on the income in their foreign country, they do not need to report the account to the U.S. This is incorrect. FBAR is a disclosure requirement, not a tax calculation. Even if you owe zero U.S. tax, you must still disclose foreign accounts that meet the threshold. The FBAR and your tax return are separate filings with separate obligations.
FBAR vs. FATCA: What Is the Difference?
FBAR and FATCA are separate reporting requirements with different thresholds, deadlines, and penalties. Many taxpayers need to file both. Here is how they compare.
| Comparison Point | FBAR (FinCEN 114) | FATCA (Form 8938) |
|---|---|---|
| Form | FinCEN Form 114 | Form 8938 |
| Filed With | FinCEN (Treasury Dept) | IRS (with tax return) |
| Threshold (Expats) | $10,000 aggregate | $200,000 year-end / $300,000 any time |
| Threshold (US Residents) | $10,000 aggregate | $50,000 year-end / $75,000 any time |
| Deadline | April 15 (auto ext. Oct 15) | Tax return deadline |
| Coverage | Bank & financial accounts | Broader: stocks, partnerships, foreign pension interests |
| Non-Willful Penalty | Up to $16,536 per violation (per year) | $10,000 per year |
| Willful Penalty | Greater of $100,000 or 50% of account balance per violation | Up to $50,000 per year |
Do I Need to File Both?
Many U.S. expats need to file both FBAR and Form 8938. The key question is whether your foreign assets exceed the FATCA thresholds. If you have multiple foreign accounts, a pension, and any foreign investments, it is very likely that both apply to you. We review every client situation to determine exactly which forms are required.
What About Form 3520 and 3520-A?
If you have a foreign trust, received a foreign gift exceeding $100,000, or are a beneficiary of a foreign trust, you may also need to file Forms 3520 and 3520-A. These have their own strict deadlines and severe penalties. We assess every client for these additional requirements during our compliance review.
FBAR Penalties: What You Actually Risk
Understanding the penalty structure helps you assess your situation accurately. The distinction between willful and non-willful is the most critical factor.
Up to $16,536 per violation (per year)
The Supreme Court's 2023 decision in Bittner v. United States held that non-willful FBAR penalties apply per report (per year), not per account. This was a significant change from prior IRS practice and dramatically reduces potential exposure for non-willful violations.
Greater of $100,000 or 50% of account balance per violation
Willful violations carry far more severe penalties. The IRS looks at factors such as opening accounts in numbered or pseudonym form, structuring deposits to avoid detection, and moving funds between accounts. If the IRS determines your failure was willful, the penalties can be devastating.
Up to $250,000 fine and/or 5 years imprisonment
In egregious cases involving intentional tax evasion, criminal penalties apply. This is extremely rare for ordinary taxpayers who simply did not know about the FBAR requirement. Criminal prosecution typically involves evidence of intentional concealment and tax evasion.
The Bittner Decision: A Game-Changer for Non-Willful Cases
In February 2023, the Supreme Court decided Bittner v. United States, holding that the maximum penalty for a non-willful FBAR violation is calculated per FBAR report (per year), not per unreported account. Previously, the IRS had been assessing penalties per account, which could multiply exposure by 5x, 10x, or more for taxpayers with multiple accounts.
This decision significantly reduces penalty exposure for non-willful taxpayers. However, willful penalties still apply per account, and the IRS has not changed its approach on that front. Understanding where you fall on the willful vs. non-willful spectrum is essential.
We assess every client\'s situation to determine their position on this spectrum before recommending any course of action.
IRS Streamlined Filing Procedures
The IRS has a formal program for taxpayers who failed to file non-willfully. Here is how it works and how we guide you through every step.
Streamlined Foreign Offshore
For U.S. expats who meet the non-residency requirement — generally, living outside the U.S. for at least one of the past 3 tax years.
- No miscellaneous offshore penalty
- 3 years of amended/delinquent tax returns
- 6 years of FBAR filings
- Non-willfulness certification required
- Available for non-willful violations only
Streamlined Domestic Offshore
For U.S. residents who do not meet the non-residency requirement but whose violations were still non-willful.
- 5% miscellaneous offshore penalty on highest aggregate balance
- 3 years of amended tax returns
- 6 years of FBAR filings
- Non-willfulness certification required
- Available for non-willful violations only
The Streamlined Process: Step by Step
Determine Your Eligibility
The Streamlined Procedures are available to taxpayers whose failure to file was non-willful — meaning it resulted from negligence, inadvertence, or a misunderstanding of the law, not intentional tax evasion. We review your circumstances to assess whether you qualify.
Prepare the Required Returns
For the Streamlined Foreign Offshore Procedures (for expats), you will file 3 years of amended or delinquent tax returns and 6 years of FBARs. For the Streamlined Domestic Offshore Procedures (for US residents), you file 3 years of amended returns and 6 years of FBARs.
Submit the Non-Willfulness Certification
A critical component is a signed statement certifying that your failure to comply was non-willful. This document must be drafted carefully — it is reviewed by the IRS. The wording matters significantly, and we guide clients through this process.
Pay the Applicable Penalty (If Any)
Under the Streamlined Foreign Offshore Procedures, there is no penalty for qualifying expats. Under the Streamlined Domestic Offshore Procedures, a 5% miscellaneous offshore penalty applies. We calculate exactly what you owe before submission.
Move Forward with Confidence
Once accepted, you are back in compliance. Going forward, we help you stay current with annual FBAR filings, FATCA reporting, and any other required disclosures. This program exists specifically for people in your situation — use it.
Common FBAR & FATCA Mistakes
These are the errors we see most often. Each can turn a manageable situation into a serious problem.
Assuming No US Filing Is Needed
CriticalMany expats believe that because they pay taxes in their foreign country, they do not need to file US returns or FBARs. This is wrong. US citizens must file regardless, and FBAR is a disclosure requirement independent of tax owed.
Missing Signature Authority Accounts
CriticalYou must report accounts you have signature authority over, even if you do not own them. Business owners often overlook corporate accounts, and trustees miss trust accounts. This is a common source of FBAR violations.
Forgetting Joint Accounts Count in Full
High RiskJoint accounts with a non-US spouse must be reported at 100% of their value — not 50%. The full balance counts toward your $10,000 aggregate threshold. Many taxpayers mistakenly split the value.
Confusing FBAR and FATCA Thresholds
High RiskFBAR has a $10,000 threshold. FATCA Form 8938 has much higher thresholds ($200,000/$300,000 for expats). Just because you do not need to file Form 8938 does not mean you can skip FBAR.
Filing FBAR Late Without Extension
Medium RiskThe FBAR deadline is April 15 with an automatic extension to October 15. If you miss October 15 without a valid reason, you are technically late. We help clients file on time or apply for reasonable cause relief.
Not Reporting Foreign Pensions Correctly
High RiskForeign pension accounts often trigger both FBAR and FATCA reporting. Additionally, certain foreign pension structures may be treated as trusts (Form 3520) or foreign grantor trusts. The reporting requirements are complex and frequently missed.
Waiting for the IRS to Find You
CriticalVoluntary disclosure is treated far more favorably than discovery. If you know you have a compliance issue, coming forward proactively through the Streamlined Procedures or another voluntary disclosure program is almost always the best strategy.
DIY Streamlined Filing
High RiskThe non-willfulness certification in the Streamlined Procedures is reviewed by the IRS. Poorly worded certifications can lead to rejection or escalation. This is not a DIY project — professional guidance significantly improves outcomes.
FBAR, FATCA & Compliance Deadlines
Missing a deadline can trigger penalties. Here is a clear calendar of what is due and when.
Primary FBAR & Tax Deadlines
FBAR Due (FinCEN Form 114)
Automatic extension to Oct 15 available
FATCA Form 8938 Due
Filed with your tax return
US Expat Tax Return Due
Automatic 2-month extension
Extended FBAR Deadline
Final deadline with automatic extension
Extended Tax Return Deadline
If you filed Form 4868
Related Compliance Forms
Foreign Gift / Trust Reporting
Same as tax return deadline (April 15 / extended Oct 15)
Foreign Trust Annual Return
March 15 (or extended Sept 15)
Foreign Corporation Info Return
Filed with tax return
PFIC Annual Return
Filed with tax return
What If I Missed Deadlines?
If you missed FBAR or tax return deadlines, you generally have options. Reasonable cause relief may apply if you can demonstrate that your failure was due to reasonable cause and not willful neglect. The Streamlined Procedures are available for non-willful violations. Do not let past missed deadlines paralyze you — there is almost always a path forward.
Why Trust Lizo Tax Consulting with Your Compliance?
Compliance issues are stressful enough without worrying whether your advisor truly understands the landscape. We bring deep, focused expertise to every FBAR and Streamlined case.
IRS Enrolled Agent Status
Rhymus Lizo is an IRS Enrolled Agent, federally authorized to represent taxpayers before the IRS at all levels — including examinations, collections, and appeals.
FBAR & FATCA Specialist
We focus specifically on cross-border compliance. Every year, we handle dozens of FBAR filings, FATCA disclosures, and Streamlined Procedure cases.
Expat-Specific Experience
Having worked inside the UN system including a staff appointment in the UN Income Tax Unit, and lived internationally, we understand the practical realities of foreign banking, multi-country accounts, and cross-border complexity.
Discreet & Judgment-Free
Most clients who come to us for Streamlined compliance did not know about the requirements. We treat every case with discretion and zero judgment.
Frequently Asked Questions
Straight answers about FBAR, FATCA, and getting compliant.
Probably not, if your failure was genuinely non-willful. The IRS distinguishes between taxpayers who intentionally hid accounts and those who simply did not know about the requirement. The Streamlined Filing Procedures exist specifically for people in your situation. The key is to come into compliance proactively rather than waiting for the IRS to find you.
Get Compliant. Sleep Better.
The longer you wait, the more complicated it gets. The good news: there is a clear path forward, and we have walked many clients through it calmly and completely.
Start with a free 30-minute fit call. No obligation. Discreet, judgment-free assessment.
