2025 FBAR penalties
Updated on December 12, 2025
by Jeff Patterson
Jeff Patterson is an American living in Scotland and joined the team at Expat Tax Online after experiencing the complexities of living abroad with a family.
Table of Contents
The 2025 FBAR penalties are here, and yes, they’ve inched upward again because of inflation adjustments. Nothing dramatic, but enough to matter if you’ve been putting this off.
Before getting into the penalty amounts, it helps to review the basic FBAR rules, especially for US expats managing accounts across several countries.
Do US expats still need to file an FBAR in 2025?
If you’re a US citizen or Green Card holder living abroad and your total foreign account balance hits more than US$10,000 at any point in 2025, even for a single day, then yes, you still have to file an FBAR.
And that US$10,000 number is combined, not per account. This catches people every year.
This applies whether you live in the US or abroad, though expats tend to be the ones who trigger the requirement.
What counts as a “foreign account” for US expats?
A foreign financial account generally includes bank accounts, investment accounts, and accounts where you have signature authority.
Foreign accounts can include:
- bank accounts (checking, savings, time deposits)
- investment or brokerage accounts
- online banks and fintech wallets
- accounts where you have signature authority
- some foreign retirement plans (though these require careful classification)
For expats, this often includes:
- Australia: superannuation + bank accounts
- UK: ISAs + current accounts
- Singapore: CPF + savings accounts
- Digital nomads: Wise, Revolut, Monzo, N26
Foreign retirement plans aren’t automatically reportable. Some plans are treated like employer retirement accounts and may be exempt from FBAR reporting, while others function more like standard financial accounts. Plans such as Australian superannuation and Singapore CPF need a case-by-case analysis.
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How much is the FBAR penalty for 2025?
The IRS breaks FBAR penalties into three main categories: non-willful, willful, and criminal. The intent behind the mistake changes everything.
- Non-willful FBAR penalty (civil): up to US$16,536 per report.
- Willful FBAR penalty (civil): the greater of US$165,353 or 50% of the account balance per violation.
- FBAR criminal penalty: up to US$250,000 plus potential imprisonment.
How non-willful penalties are assessed
For non-willful cases, the calculation of penalties changed after the Supreme Court’s Bittner ruling. The penalty is now applied per FBAR report, not per account. That means one penalty per year of missing FBARs, not one per account.
The IRS still looks at factors like:
- Your explanation
- Your filing history
- Whether income was reported correctly
- How quickly you fix the error
Depending on your circumstances, the IRS may reduce the penalty or waive it entirely.
When the IRS may issue zero penalties
This happens more than people think. Cases like:
- You moved abroad recently and truly didn’t know.
- You reported all income but missed the FBAR.
- You fixed everything voluntarily before the IRS contacted you.
How willful penalties are assessed
Actions that suggest intentional concealment include:
- Ignoring FATCA letters
- Signing tax returns claiming you have no foreign accounts
- Spreading funds across several banks to avoid detection
- Forming offshore structures solely to hide assets
- Instructing an accountant to omit an account
Patterns where criminal cases actually occur
Criminal FBAR cases usually involve deliberate evasion, such as:
- Multi-year, high-balance concealment
- Using false names or entities
- Lying to IRS agents
- Money laundering investigations
How the IRS decides willful vs non-willful
The IRS evaluates intent using a combination of documents and behavior patterns. No single factor determines the outcome because agents consider the overall picture.
- Intent indicators
- Emails to your accountant
- Whether you previously filed FBARs
- FATCA letters from your bank
- Bank account opening documents
- Tax return answers (Schedule B)
- Negligence vs reckless disregard
- Negligence: You didn’t know, didn’t understand, or forgot.
- Reckless disregard: You had reasons to know, but ignored them.
- Willful: Clear intent to hide.
How foreign banks report in 2025
Foreign banks report US account holders mainly through FATCA and their local information-sharing agreements with the US. Many banks also participate in the OECD’s CRS system for non-US clients, which encourages wider global sharing, but the US itself is not a CRS member. As a result, FATCA remains the primary mechanism for US-related account disclosures.
Simple table comparing categories
|
Category |
What it means |
Common expat situations |
Penalty level |
|
Non-willful |
Mistake or misunderstanding |
Forgot old account |
Low or none |
|
Reckless |
Ignored clear warnings |
Accountant flagged it |
Medium |
|
Willful |
Intentional concealment |
Offshore structures |
High (50%+) |
What to do if you missed FBAR filings
Expats usually fall into one of four paths depending on intent and history.
- Delinquent FBAR Submission Procedures (DFSP)
DFSP typically results in no penalties because it’s designed for taxpayers who correctly reported all income but simply forgot to file FBARs. If the IRS hasn’t contacted you yet and your tax return is otherwise accurate, they generally treat it as a record-keeping issue rather than a compliance failure.
Best for people who:- reported all their income on U.S. returns
- simply forgot to file FBARs
- weren’t contacted by the IRS yet
- Streamlined Foreign Offshore Program (SFOP)
This program works well for expats who were non-willful and simply didn’t know about FBAR or other foreign reporting requirements.
Under SFOP, eligible taxpayers must file three years of amended returns and six years of FBARs and pay any tax and interest owed.
In the Streamlined Foreign Offshore Program, expats pay no offshore penalty. In the Domestic version, US residents pay a 5% offshore penalty. In both programs, taxpayers must still pay any tax and interest owed. - Voluntary Disclosure Program (VDP)
Used only when the behavior looks willful.
When it applies:- deliberately hidden accounts
- offshore entities
- ignored FATCA bank letters
- false statements on tax returns
FAQs
-
Does filing an FBAR change my US tax bill?
No. The FBAR is a reporting requirement, not a tax. Filing it doesn’t increase your taxes, and missing it doesn’t reduce them. The penalties exist because the IRS wants visibility into offshore accounts, not because the accounts themselves are taxable. However, if you earned income in those accounts, that income may still need to be reported on your US tax return.
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If my foreign bank already reports my information under FATCA, do I still need to file an FBAR?
-
What if my foreign accounts fluctuate throughout the year?
-
Do joint accounts with my non-US spouse count toward the $10,000 threshold?
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What if the account is in a foreign currency?
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If I missed several years of FBARs, should I file them all at once or step-by-step?
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