FBAR penalty figures get quoted more often than almost anything else in cross-border tax, usually without the context that decides which one applies to you. The numbers are real. They are also ceilings rather than forecasts, and the distance between the two is mostly about intent.
Everything below is the general shape of the rules. Penalty amounts are adjusted for inflation and the specifics move, so treat this as orientation and get your own year checked.
Two tiers, and the word that separates them
FBAR penalties divide into non-willful and willful.
Non-willful covers the person who did not know, or misunderstood, or thought the rule was about year-end balances. That is the overwhelming majority of the people who come to us. The maximum penalty per violation is a fixed amount adjusted annually for inflation.
Willful is a different category entirely. It applies where there was a voluntary, intentional disregard of a known legal duty, and the maximum is dramatically higher: broadly, the greater of a large fixed figure or half the account balance.
The word "willful" is doing enormous work in that sentence. It is not a synonym for "careless" and it is not established by the fact that an account went unreported. It has to be shown.
The per-report question, and why it matters
For years there was a live argument about whether the non-willful penalty applied once per unfiled report or once per unreported account. The difference is not academic: someone with eight foreign accounts and one missed form faces a very different number under each reading.
In Bittner v. United States (2023), the Supreme Court held that the non-willful penalty applies per report, not per account.
That decision meaningfully reduced exposure for exactly the profile we see most, which is someone with several small accounts and a genuine misunderstanding rather than a hidden fortune.
What usually actually happens
Here is the part the penalty tables do not tell you.
Most of the people we sit with are not in penalty territory at all. They are in correction territory. They had a misreading of the threshold, or an account they never thought of as an account, and the income behind it was already declared on their return.
For that profile there is a defined route back, and where the income was already reported and the reason for the miss is genuine, it is built to end without a penalty. Using it voluntarily is the whole point. That is covered in you missed FBAR: here is the path back.
Where a penalty is genuinely in play, reasonable cause matters, the facts matter, and the story of how the omission happened matters. Someone who came forward on their own initiative, with a coherent account of the misunderstanding and complete records, is in a fundamentally different position from someone who was contacted first.
What usually happens instead
A lot of writing in this space is built to make you anxious enough to hire someone, which is why the maximum figures travel further than the context around them.
We would rather you had the accurate version. The IRS and FinCEN are administering a reporting regime, not hunting people who kept a savings account in the country they moved from. Where the omission was a genuine misunderstanding and the correction is made voluntarily, the outcome is usually procedural rather than punitive.
That is not a promise about your case. It is the difference between what the rules permit and what actually tends to happen.
What actually raises your risk
In practice, three things:
- Waiting. Voluntary looks different from discovered, and that difference is the single biggest variable you control.
- Partial fixes. Filing some years and not others, or fixing FBAR while leaving the underlying income unreported, creates a worse record than a complete correction.
- Guessing at the numbers. Reconstructing highest balances properly matters. Rounding from memory does not hold up.
If you are reading this because you think something is unfiled, the useful next step is not to work out your maximum exposure. It is to work out which correction path fits, which comes down to whether there is unreported income behind the account.
Tell us your situation in one sentence. Being years behind is a normal conversation here, not a confession.
Start with FBAR filing: the key points if you are still working out whether you had an obligation at all.
Thresholds, deadlines and penalty amounts change every filing year. This guide is reviewed against the current year, and it is educational rather than advice about your own situation. Before you act on anything here, check it with us.