Delinquent FBARs Carry Steep Fines and Possible Federal Prison Time

Failing to disclose an individual or corporate taxpayer’s foreign bank accounts to the federal government can have serious consequences. Not only can noncompliance lead to substantial fines, but it can also lead to federal prison time in some cases. With DOJ and IRS FBAR investigations on the rise, taxpayers need to prioritize compliance in 2026.

Foreign bank accounts are subject to mandatory disclosure requirements under federal law. The Bank Secrecy Act (BSA) requires taxpayers to disclose annually foreign accounts with an aggregate value of $10,000 or more, and taxpayers may have additional disclosure obligations under the Foreign Account Tax Compliance Act (FATCA). For those who are not in compliance, facing a DOJ or IRS investigation can have serious consequences. Learn more from New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:

When Are U.S. Taxpayers Required to File an FBAR?

Complying with the BSA involves filing a Report of Foreign Bank and Financial Accounts (FBAR) with FinCEN. Individual and corporate taxpayers who own qualifying foreign bank accounts must file an FBAR annually. While FBARs are technically due on Tax Day, all U.S. taxpayers automatically receive a six-month filing extension.

What Are the Consequences of Failing to Timely File an FBAR?

The consequences of failing to file an FBAR in a timely manner can be significant. Delinquent taxpayers can face consequences including (but not limited to):

DOJ and IRS FBAR Investigations

The DOJ and IRS have been prioritizing enforcement of FBAR compliance in 2026. Taxpayers suspected of failing to file FBARs can face invasive investigations focused not only on FBAR compliance but also on other aspects of federal tax compliance.

Civil Monetary Penalties

Even inadvertent FBAR filing deficiencies can lead to civil monetary penalties. These penalties can be up to six times the value of a taxpayer’s undisclosed accounts.

Criminal Prosecution (for Willful Violations)

If federal prosecutors find evidence of a willful failure to file, they can pursue criminal charges under the BSA (and other federal statutes). Convictions can result in substantial fines and federal prison time.

How Our Team Can Help

Our team assists individual and corporate taxpayers with coming into compliance with their foreign bank account disclosure obligations. We also provide defense representation during FBAR investigations and federal prosecutions. If you are at risk (or your business is at risk) of facing penalties due to FBAR noncompliance, we may be able to:

• Assist with submitting an IRS streamlined disclosure filing
• Assist with submitting an IRS voluntary disclosure
• Work to favorably resolve the government’s case without a federal trial

When facing the consequences of FBAR noncompliance, the options available to you depend on the specific circumstances at hand. Our team can assess your options and then help you make an informed decision about how best to proceed.

Schedule a Call with New Jersey Tax Lawyer Kevin E. Thorn

For more information about how we help clients facing the consequences of FBAR noncompliance, contact us today. Call 201-842-7696 or contact us online to schedule a call with New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.