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FBAR & International Tax Resource Center

FBAR penalties: willful and non-willful violations

FBAR penalties can exceed the balance of the account itself in the worst cases. Understanding how they are calculated shows why fixing missed years early matters.

Updated November 2026 · VG CPA PC advisors

Non-willful penalties

A non-willful violation can carry a civil penalty of up to a little over $16,000, adjusted for inflation. In Bittner v. United States (2023), the Supreme Court held that this maximum applies per FBAR report, not per account, so a person with many accounts in one year faces one penalty for that year.

No non-willful penalty applies if the violation was due to reasonable cause and the balance was properly reported, and the IRS often uses reduced penalty amounts under its own guidelines.

Willful penalties

A willful violation can carry a penalty of the greater of an inflation-adjusted amount (currently over $160,000) or 50% of the account balance at the time of the violation, per account per year. Courts have held that willfulness includes reckless disregard and willful blindness, not only knowing violations.

Signing a tax return that asks whether you have foreign accounts and checking no can be used as evidence of willfulness. Criminal penalties are also possible for willful violations.

Statute of limitations and defenses

The IRS has six years from the FBAR due date to assess a civil penalty. Statements, emails with bankers, and the circumstances of the accounts are central to establishing whether conduct was non-willful.

If you have unreported accounts, a voluntary filing under the Streamlined or Delinquent FBAR procedures nearly always costs far less than penalties assessed after IRS contact.

Questions

Frequently asked questions

Can FBAR penalties be appealed?

Yes. Proposed penalties can be protested to the Independent Office of Appeals.

Are FBAR penalties tax?

No. They are civil penalties under Title 31, collected by the government in district court suits if unpaid.

Is ignorance of the FBAR rule a defense?

Genuine lack of knowledge supports non-willfulness, but it does not eliminate the non-willful penalty unless reasonable cause applies.

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Related guides and services

General information based on federal law as of the date above, not advice for your situation. Please speak with an advisor before acting.

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