The IRS enforces FBAR rules with penalties that reach five figures for a single missed report and climb far higher when it decides you knew better.
Former IRS agents are now on your side of the table. MD Sullivan Tax Group gives you FBAR penalty help from people who have read these files from the inside, so you know where you stand before the IRS decides for you.
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What a Missed FBAR Can Actually Cost You
For 2026, a non-willful FBAR penalty is capped at $16,536 per annual report. A willful violation costs the greater of $165,353 or 50% of the account balance, per account, per year.
Those 2026 figures stayed at 2025 levels because October 2025 inflation data was never published during the government shutdown.
| Non-willful | Willful | |
| 2026 maximum | Up to $16,536 | Greater of $165,353 or 50% of the balance |
| Counted | Per annual FBAR | Generally per account, per year |
An honest mistake is capped per year, while a willful finding multiplies across every account you hold. Since Bittner v. United States (2023), the Supreme Court has held that non-willful penalties apply per annual report, not per foreign account listed on it. Willful penalties did not get that relief, which is why they grow so fast.
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Willful or Non-Willful? One Label Changes Everything
Non-willful means an honest mistake, like never knowing the rule existed. Willful means you knew about the requirement and ignored it, or acted with reckless disregard, sometimes called “willful blindness.” Willful penalties can run ten times larger or more.
The IRS builds from your past returns, account history, what you said and when you said it. That is why the first reply you send matters more than the last one.
Got an IRS Letter About Your Foreign Accounts?
Two kinds of letters tend to show up, and they are not the same problem.
- A Letter 3800 FBAR warning means the IRS found a violation but decided a fine was not needed this time. It usually requires you to file any missing FBARs and stay compliant. Treat it seriously, because a repeat problem can lead to penalties.
- An IRS FBAR examination is heavier. An examiner reviews your accounts and proposes a penalty. The word that matters is proposes. You can respond, and you can appeal. Do not call the examiner yourself to “clear things up,” since everything you say goes into the file.
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Penalties Are Not Automatic, and Many Come Down
A non-willful penalty can be waived if you had reasonable cause and reported all the income from the accounts. The IRS also applies internal guidelines that often lower penalties, and you can appeal an examiner’s proposed penalty to the IRS Independent Office of Appeals.
Our approach to FBAR penalty abatement starts there, because the wrong argument filed first can close doors the right one would have opened.
Heading: Penalty Proposed? It Is Not Final.Body: An examiner’s number is a starting point, not a verdict. You can respond, reduce it, and appeal it. Get FBAR penalty help from people who know how that fight is won. CTA: Let Us Fight Your Penalty Today |
Who Has to File an FBAR, and Is Jail Possible?
Any US person whose foreign financial accounts total more than $10,000 at any time during the year has to file, including accounts where you only hold signature authority.
You file FinCEN Form 114 online through the BSA E-Filing System. The deadline is April 15, with an automatic extension to October 15.
Criminal cases are rare and usually involve deliberate hiding of money. The law allows fines up to $250,000 and up to 5 years in prison for willful violations, and more when tied to other crimes.
Most people with honest mistakes face civil penalties at most.
If something in your history worries you, tell us first. We handle every case with confidentiality.
Heading: Open the Letter. Then Call Us.Body: Silence is the one answer the IRS never forgets. Let former agents read the notice and handle every reply, with FBAR penalty help that starts with a free consultation. CTA: Answer The IRS For Me! |
How We Help You Reduce or Waive FBAR Penalty
Here is how our FBAR penalty help runs, from the first call to a closed file.
1. We Read the Letter Before You Panic
Bring the notice, the deadline, and whatever you have already sent. We tell you what the IRS is actually asking for and how much time you have.
2. We Rebuild Your Account Map
Every foreign account, every balance, every year in question. Gaps in this map are where penalties get inflated, so we close them first.
3. We Choose the Story the Facts Support
We do not invent a narrative. We look at what you knew, when you knew it, and build the record that honestly fits, whether that points to non-willful or needs a harder conversation.
4. We Take the IRS Off Your Phone
With a power of attorney on file, our FBAR IRS representation means the IRS deals with us. You do not take the calls, and you do not write the replies.
5. We Fight for a Smaller Number
Reasonable cause statements, internal guidelines, and Appeals if needed. During an IRS FBAR examination, every answer we give is written to lower the number, not just to meet the deadline.
6. We Get You Current and Keep You There
Missing FBARs get filed. If you received a Letter 3800 FBAR warning, this is the compliance it asks for. Then we set you up so next April is boring.
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What Our Clients Say
Foreign account problems feel isolating until you hear from someone who has been through one. These are the words of people who arrived with a letter and left with a solution.
Why Choose MD Sullivan Tax Group
Your case lands with a team that has worked IRS matters from both sides of the desk, and that changes how every decision gets made.
- Former IRS agents on the team. Over 130 years of combined IRS experience, applied to your file.
- Attorneys, CPAs, and enrolled agents under one roof. Legal strategy, accounting, and filing handled together.
- Nationwide practice. Federal and state matters, wherever you live.
- You never speak to the IRS. Our FBAR IRS representation handles every call, letter and meeting.
- A straight read on your situation first. We tell you where you stand before we tell you what comes next.
- A founder who worked the other side. Michael D. Sullivan is a former IRS Revenue Officer and Offer in Compromise Specialist.
- Trusted on national television. Michael has appeared on Fox Business and NBC to explain how the IRS really operates.
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Your Foreign Accounts Are Not the Problem. Waiting Is.
The IRS already has the forms, the process, and a long memory. What it does not have yet is your side of the story.
Every month a missing FBAR or an unanswered letter sits, the file gets worse, and the word “willful” gets easier for an examiner to write. Honest mistakes deserve to be treated as honest mistakes, and that outcome is built with a clean record, a clear timeline and someone who knows which arguments land.
Our team has sat in the examiner’s chair. We know what a reasonable cause statement has to say, when a penalty can be pushed down, and when a case belongs in front of Appeals. You bring the letter, the statements, and your questions. We bring everything else.
Start with FBAR penalty help that costs you nothing but a free conversation to find out what is possible.
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FAQs
For a non-willful violation, up to $16,536 per annual report. For a willful violation, the greater of $165,353 or 50% of the account balance, per account, per year. These 2026 figures stayed at 2025 levels because October 2025 inflation data was not published during the government shutdown.
Non-willful means an honest mistake, such as not knowing the rule existed. Willful means you knew about the requirement and ignored it, or acted with reckless disregard or 'willful blindness'. The label matters more than anything else, because willful penalties can be ten times larger or more.
Per report, meaning per year. In Bittner v. United States (2023), the Supreme Court ruled that non-willful penalties apply per annual FBAR, not per foreign account listed on it. Willful penalties are still generally applied per account, per year, which is why they can grow so fast.
Letter 3800 is an FBAR warning letter. The IRS can send it instead of a penalty when it finds a violation but decides a fine is not needed. It usually requires you to file any missing FBARs and stay compliant. Treat it seriously, since a repeat problem can lead to penalties.
Yes. FBAR penalties are not automatic. Non-willful penalties can be waived if you had reasonable cause and reported all the income from the accounts. The IRS also uses internal guidelines that often lower penalties, and you can appeal an examiner's proposed penalty to the IRS Independent Office of Appeals.
Any US person whose foreign financial accounts total more than $10,000 at any time during the year, including accounts you only have signature authority over. You file FinCEN Form 114 online through the BSA E-Filing System. The deadline is April 15, with an automatic extension to October 15.
Criminal cases are rare and usually involve deliberate hiding of money. The law allows fines up to $250,000 and up to 5 years in prison for willful violations, and more if tied to other crimes. Most people with honest mistakes face civil penalties at most.
