U.S. persons with foreign accounts worth more than $10,000 combined must file FinCEN Report 114, the Report of Foreign Bank and Financial Accounts (FBAR). Many filers never learn the rule applies to them until a penalty notice arrives. The U.S. Treasury’s Financial Crimes Enforcement Network administers the filing, and the Internal Revenue Service (IRS) enforces it.
This is a low-effort filing with outsized penalties. Below is what triggers it, when it is due, what it costs to get wrong, and how it differs from IRS Form 8938.
What Is FinCEN Report 114 (FBAR)?
FinCEN Report 114 is the Report of Foreign Bank and Financial Accounts, required under the Bank Secrecy Act (BSA). The BSA is a 1970 anti-money-laundering law, so the FBAR’s original purpose is fighting money laundering and hidden offshore assets, not collecting income tax. The IRS confirms the requirement has existed since 1970.
FinCEN (Financial Crimes Enforcement Network), a bureau of the U.S. Treasury, owns the form. Enforcement is delegated to the IRS, which assesses penalties, per FinCEN’s Bank Secrecy Act page. The FBAR is not a tax form and is not filed with a tax return.
| FBAR fact | Detail | Source |
|---|---|---|
| Governing law | Bank Secrecy Act of 1970 | FinCEN |
| Threshold | $10,000 aggregate, any time in the year | IRS |
| Deadline | April 15, automatic extension to October 15 | IRS |
| Filed with | FinCEN via the BSA E-Filing System | IRS |
| Non-willful penalty max | $16,536 (assessed on or after Jan. 17, 2025) | 31 CFR 1010.821 |
| Willful penalty max | Greater of $165,353 or 50% of the balance | 31 CFR 1010.821 |
Who Needs to File an FBAR?
Any “United States person” with a financial interest in, or signature authority over, foreign accounts exceeding $10,000 in aggregate must file. The IRS lists U.S. citizens, residents, corporations, partnerships, LLCs, trusts, and estates as covered persons on its FBAR page.
- U.S. citizens, including citizens living abroad. Citizenship alone triggers the requirement regardless of where you live, a common expat gap.
- U.S. residents. Green card holders and substantial presence test residents are both covered.
- U.S. entities. Corporations, partnerships, LLCs, trusts, and estates file for their own foreign accounts (see the entity section below).
What Is the FBAR $10,000 Threshold?
You must file if the aggregate value of all your foreign financial accounts exceeds $10,000 at any single moment during the calendar year, per the IRS FBAR page. It is measured by the highest momentary balance, not the year-end or average balance. Five accounts of $3,000 each total $15,000, so all five must be reported.
The threshold is aggregate, not per account. Once you cross $10,000, every account is reported, however small. The IRS notes the $10,000 figure has not been inflation-adjusted since it was set, so the real reporting bar has fallen sharply over the decades.
Which Foreign Financial Accounts Are Reportable?
Bank, brokerage, mutual fund, foreign pension, and cash-value insurance accounts held outside the U.S. all count, per the IRS FBAR guidance. Accounts at foreign branches of U.S. banks are also reportable. Directly held assets that are not accounts generally are not.
| Item | Reportable? | Source |
|---|---|---|
| Foreign bank and brokerage accounts | Yes | IRS FBAR page |
| Mutual funds held abroad | Yes | IRS FBAR page |
| Cash-value foreign insurance or annuity | Yes | IRS FBAR page |
| Foreign branch of a U.S. bank | Yes | IRS FBAR page |
| Foreign real estate held directly | No | IRS FBAR page |
| Securities or precious metals held directly | No | IRS FBAR page |
| Crypto in a personal foreign wallet | Not currently (FinCEN rule proposed, not finalized) | FinCEN |
What Counts as Financial Interest vs. Signature Authority?
Both trigger filing. Financial interest means ownership or legal title, including accounts held by entities you control (more than 50%). Signature authority means you can direct the disposition of funds even with zero ownership. The IRS describes both on its FBAR page.
Signature authority catches employees, officers, and treasurers who sign on a company’s foreign account. Limited exemptions exist for certain signature-only employees of publicly traded companies and financial institutions.
When Is FinCEN Report 114 Due?
The FBAR is due April 15 of the following year, with an automatic extension to October 15 that requires no form or request, per the IRS FBAR page. This differs from the income tax return, which needs Form 4868 to extend. The old June 30 deadline was abolished for tax year 2016 and later.
The change came from Section 2006(b)(11) of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Public Law 114-41), enacted July 31, 2015. FinCEN also posts disaster-area extensions on FinCEN.gov, as it did for Hurricanes Milton, Helene, Debby, and Beryl in 2024.
How Do You File an FBAR?
File electronically through the BSA E-Filing System at bsaefiling.fincen.gov. The IRS confirms paper filing is not accepted without special FinCEN authorization. For a deeper walkthrough, see our FBAR filing guide.
- Identify qualifying accounts, confirming the aggregate exceeded $10,000 at any point.
- Gather each account’s number, institution name and address, account type, and maximum value.
- Submit via the BSA E-Filing System as an individual or through a preparer.
A third party filing on your behalf needs FinCEN Form 114a authorization. Keep records for five years from the due date, per IRS guidance.
How Do You Calculate the Maximum Account Value for FBAR?
Use the highest balance the account reached at any point during the calendar year, then convert it to U.S. dollars using the Treasury Reporting Rates of Exchange (the year-end rate), the officially preferred rate cited by the IRS. Report the figure in whole U.S. dollars.
Periodic statements are acceptable evidence of the peak balance. If the exact maximum is unknown, a reasonable, documented estimate based on statements is acceptable. Using year-end or average balances is a common error.
What Are the FBAR Penalties for Late Filing?
Non-willful penalties run up to $16,536 per unfiled report, and willful penalties reach the greater of $165,353 or 50% of the account balance, per 31 CFR 1010.821. These are the statutory bases indexed for inflation, and the amounts change annually.
| Violation | Statutory base | Current indexed max | Unit of assessment | Source |
|---|---|---|---|---|
| Non-willful | $10,000 | $16,536 | Per report (per form/year) | 31 CFR 1010.821 |
| Willful | $100,000 or 50% of balance | Greater of $165,353 or 50% of balance | Per violation | 31 CFR 1010.821 |
| Criminal (willful) | Up to $250,000 and/or 5 years | Statutory | Per violation | IRS |
| Criminal (with other violations) | Up to $500,000 and/or 10 years | Statutory | Per violation | IRS |
The most important recent change is Bittner v. United States, 598 U.S. 85 (2023). The Supreme Court held 5-4 on February 28, 2023 that the non-willful penalty applies per report, not per account. That reduced Alexandru Bittner’s exposure from $2.72 million across 272 accounts to $50,000 across five annual forms.
“Willful” includes willful blindness and reckless disregard, not only intentional evasion. A non-willful penalty may be waived for reasonable cause when the balance was properly reported. Willful conduct can also carry the criminal penalties above.
How Can You Fix a Missed FBAR Filing?
Three IRS remediation paths exist, depending on whether the failure was willful. The right path turns on your facts, so confirm before filing.
- Delinquent FBAR Submission Procedures. For filers who missed only the form and owe no unreported tax.
- Streamlined Filing Compliance Procedures. For non-willful failures, with domestic and foreign versions.
- Voluntary Disclosure Practice (VDP). For willful conduct seeking protection from criminal prosecution.
FBAR vs Form 8938: What Is the Difference?
FBAR goes to FinCEN under the Bank Secrecy Act with a $10,000 threshold, while Form 8938 goes to the IRS with your tax return under the Foreign Account Tax Compliance Act (FATCA) with thresholds starting at $50,000. Many filers must file both, and filing one does not satisfy the other.
| Feature | FBAR (FinCEN 114) | Form 8938 (FATCA) |
|---|---|---|
| Governing law | Bank Secrecy Act (1970) | FATCA (2010) |
| Filed with | FinCEN via BSA E-Filing | IRS, with the tax return |
| Threshold (single, domestic) | $10,000 aggregate | $50,000 year-end / $75,000 anytime |
| Reports | Financial accounts | Financial assets (broader) |
| Signature authority | Reportable | Not reportable |
Source: IRS comparison of Form 8938 and FBAR requirements.
Do LLCs and Corporations Need to File FBAR?
Yes. U.S. entities are “United States persons” and file for their own foreign accounts, per the IRS FBAR page. A consolidated FBAR option exists for entities owning more than 50% of a subsidiary.
Watch the disregarded-entity trap. A single-member LLC that is disregarded for income tax is still a separate person for FBAR and may need its own filing. Owners with more than 50% control also have a financial interest in the entity’s accounts. For related foreign-ownership disclosures, see our guide to Form 5471.
Do Non-Residents Need to File FinCEN 114?
Foreign nationals who are not U.S. persons generally do not file. They become filers only if they hold a green card or meet the substantial presence test, which makes them U.S. tax residents. The IRS ties the obligation to U.S.-person status, not to where the account sits.
Dual-status filers and those electing resident treatment under IRC Section 6013(g) or (h) can trigger FBAR obligations. Treaty positions vary, so professional review is worthwhile for cross-border cases like those covered in our FEMA guide for Indian startups.
What Are Common Mistakes on FinCEN Report 114?
The most frequent failures cluster around aggregation, valuation, and overlooked accounts. Each is avoidable with a clear account inventory.
- Overlooking small accounts that aggregate past $10,000.
- Using year-end or average balances instead of the highest balance.
- Applying the wrong currency conversion rate.
- Missing the October 15 final deadline, or assuming it must be requested.
- Ignoring signature-authority accounts you do not own.
- Treating a disregarded LLC as exempt.
How Commenda Helps With Foreign Account and Global Compliance
The FBAR is a low-effort filing with outsized penalties. Certainty comes from tracking every foreign account, every entity, and every deadline in one place, so a missed form never becomes a five-figure surprise.
Commenda’s corporate tax and accounting service surfaces cross-border filing obligations like the FBAR during annual tax prep, and entity management keeps entity-owned foreign accounts and their reporting triggers in view as you expand. Use our compliance calendar to track the April 15 and October 15 deadlines by entity, and pair it with the FBAR filing guide when you are ready to file.
Book a demo to get a free review of your foreign account reporting obligations.
