If you just realized you should have been reporting foreign bank accounts to the IRS, you are not alone. Thousands of U.S. taxpayers discover this obligation every year. The good news: the IRS offers formal programs that let you come forward voluntarily, fix the problem, and move on with predictable, limited penalties.
The bad news: waiting until the IRS contacts you first changes everything.
U.S. citizens and residents are taxed on worldwide income, regardless of where accounts are held. If you have a financial interest in or signature authority over foreign financial accounts with a combined value exceeding $10,000 at any point during the year, you are required to file an FBAR (FinCEN Form 114) with the Financial Crimes Enforcement Network. This is separate from your tax return and has its own deadline and its own penalty structure.
In addition to the FBAR, you may also be required to file Form 8938 (Statement of Specified Foreign Financial Assets) under FATCA if your foreign accounts exceed higher thresholds. If you own interests in foreign corporations, trusts, or partnerships, additional forms like Form 5471, Form 3520, or Form 8865 may apply.
Many people miss these requirements for years without knowing. Perhaps you inherited an account from a parent overseas, kept a savings account from before you moved to the U.S., or simply had no idea these rules existed. The IRS distinguishes between taxpayers who were unaware ("non-willful") and those who deliberately hid accounts ("willful"). That distinction determines everything about how the situation resolves.
Understanding the penalty landscape makes it clear why acting before the IRS contacts you is critical.
Per account, per year. Even for taxpayers who simply did not know about the filing requirement.
Of the account balance, per year. Criminal prosecution is also possible for willful violations.
Forms 5471, 3520, 8865, and 8938 each carry automatic penalties of $10,000 or more per form, per year.
These penalties can stack quickly. A taxpayer with two foreign accounts and three years of missed FBARs could face $60,000 in non-willful penalties alone, before any other forms or interest charges.
If you are hoping the IRS simply will not notice, that strategy has become increasingly risky. Two major reporting frameworks now feed foreign account data directly to the IRS.
FATCA (Foreign Account Tax Compliance Act) requires foreign financial institutions worldwide to identify and report accounts held by U.S. persons. Over 110 countries have signed intergovernmental agreements implementing FATCA. Banks in these countries send account holder names, balances, and transaction summaries to the IRS annually.
CRS (Common Reporting Standard) is the global equivalent, administered by the OECD. While the U.S. does not participate in CRS as a receiving country, the data flows through CRS create additional reporting channels that can surface U.S. account holders.
The IRS cross-references incoming foreign account data against filed tax returns and FBARs. When an account appears in foreign reports but not in your filings, the mismatch is flagged. This is not theoretical. The IRS has assessed billions in FBAR penalties using exactly this process.
Once an examination begins, the streamlined option disappears. A free 15-minute call can tell you exactly where you stand.
Book Your Free ConsultationThe IRS provides formal programs for taxpayers who want to fix unreported foreign accounts. The right program depends on your residency, the nature of your non-compliance, and whether the IRS has already contacted you.
For U.S. residents who were non-willful in their failure to report. Requires three years of amended returns, six years of FBARs, and all applicable international information forms. The penalty is a one-time 5% miscellaneous offshore penalty based on the highest aggregate balance of unreported foreign assets.
Flat fee: $6,000 to $15,000
Learn more about SDOP → Americans AbroadFor U.S. citizens and residents who have been living outside the U.S. and meet the non-residency requirement. Same filing package as SDOP, but qualifying filers pay zero penalty.
Flat fee: $4,500 to $9,000
Learn more about SFOP →Step 1: Free confidential triage call. A 15-minute call with Tajma Qorri to review your situation. She will confirm whether the streamlined procedures fit your facts, identify which accounts and years are involved, and determine which forms are required. No documents needed. If your case needs a tax attorney instead, she will tell you that directly.
Step 2: Written analysis and fixed-fee quote. A $750 Offshore Compliance Analysis maps your program eligibility, the complete filing package, and one flat fee. The $750 is credited in full toward your engagement if you proceed. You know the total cost before any work begins.
Step 3: Complete filing package prepared and submitted. Three years of amended federal returns (or original returns if not previously filed), six years of FBARs, all required international information forms, the penalty computation, and the non-willfulness certification statement. Everything is prepared, reviewed with you, and filed. State amended returns are included where required.
You kept a savings or investment account in your home country when you immigrated. You had no idea U.S. tax law required you to report it. This is one of the most common scenarios and typically qualifies as non-willful.
A family member passed away and left you an account overseas. The inheritance itself may not be taxable, but the account creates ongoing FBAR and FATCA reporting obligations that many people miss.
RRSPs, superannuation funds, and other foreign retirement accounts are reportable on the FBAR if they exceed the threshold. Some may also create PFIC issues if they hold foreign mutual funds.
If your name is on a parent's or sibling's account overseas, even if you have never used the money, you may have signature authority that triggers FBAR filing requirements.
Tajma Qorri spent more than ten years in international tax at Plante Moran, Grant Thornton, and Dean Dorton before founding Qorri Tax Service. Streamlined filings, FBARs, FATCA compliance, and foreign information returns are the core of the practice.
The person you speak to on the first call is the person who prepares your certification statement, computes your penalty base, and signs the returns. Every engagement is handled personally, start to finish. No hand-offs, no junior staff.
If your facts suggest potential willfulness or criminal exposure, Tajma will tell you that in the first conversation and refer you to qualified legal counsel. Honesty about the right path forward is part of the service.
Tajma Qorri
Founder, Qorri Tax Service
AICPA Member
The penalties for not filing an FBAR can be severe. Non-willful violations carry penalties up to $10,000 per account per year. Willful violations can reach the greater of $100,000 or 50% of the account balance per year. The IRS receives foreign account data through automatic exchange agreements with over 100 countries, so unreported accounts are increasingly likely to be discovered.
The IRS Streamlined Filing Compliance Procedures allow taxpayers who were non-willful in their failure to report foreign accounts to come into compliance with reduced penalties. U.S. residents file under the Streamlined Domestic Offshore Procedures (SDOP) with a one-time 5% penalty. Taxpayers living abroad may qualify for the Streamlined Foreign Offshore Procedures (SFOP), which carries zero penalties.
You must file an FBAR (FinCEN 114) if you are a U.S. person and had a financial interest in or signature authority over one or more foreign financial accounts with an aggregate value exceeding $10,000 at any point during the calendar year. This includes bank accounts, investment accounts, mutual funds, and certain pension or retirement accounts held outside the United States.
Yes. Through FATCA, foreign financial institutions in over 100 countries report account information of U.S. persons directly to the IRS. The IRS cross-references this data against filed returns and FBARs. Accounts that appear in foreign reports but not in your filings create a mismatch that triggers review.
In most cases, no. The IRS Streamlined Procedures remain available as long as the IRS has not already initiated an examination of your returns. Coming forward voluntarily before the IRS contacts you is always the strongest position.
The process involves filing three years of amended federal tax returns, six years of FBARs, all required international information forms (such as Form 8938, Form 5471, or Form 3520), a penalty computation worksheet, and a certification statement explaining why your failure to report was non-willful.
A side-by-side comparison of eligibility, penalties, and process for both streamlined programs.
Compare programs →If you moved abroad and stopped filing, learn how to catch up through SFOP with no penalties.
Learn more →Detailed guidance on FinCEN 114 filing requirements, deadlines, and specialist preparation.
Learn more →A 15-minute conversation with Tajma will tell you exactly where you stand, which program fits, and what fixing it will cost. No documents needed. No judgment about how long it has been.
Book Your Free Consultation