Service note: We prepare and file FBARs for clients, including delinquent FBAR submissions where appropriate. Learn more here: FBAR Service.
Delinquent FBAR Submission Procedures (DFSP)
What DFSP is. The Delinquent FBAR Submission Procedures allow certain taxpayers to file late FBARs (FinCEN Form 114) without FBAR penalties when specific conditions are met. FBAR is a Title 31 information filing separate from your income tax return; it discloses foreign bank and financial accounts when the aggregate maximum value exceeded $10,000 at any time during the year.
When DFSP is appropriate. DFSP is generally available if (i) your failure to file FBARs was non-willful, (ii) the income from the foreign accounts was properly reported on your U.S. tax returns and any tax was paid, and (iii) you are not under an IRS civil examination or a criminal investigation. If income from the accounts was not reported, DFSP is not the right path—consider the Streamlined Filing Compliance Procedures or other remedies instead.
How to file under DFSP. File each missing FBAR electronically via the BSA e-Filing system (FinCEN Form 114) and include a brief statement explaining the reason for filing late. Use U.S. Treasury year-end exchange rates to convert foreign currencies and report maximum account values in whole U.S. dollars. DFSP does not require amending your income tax return if the income was already reported.
Penalties and review. When DFSP criteria are met, the IRS has indicated it will generally not impose FBAR penalties for the late years submitted. Submissions remain subject to review; if the facts show ineligibility (e.g., unreported income or willful conduct), penalties may be asserted and another procedure may be required.
Recordkeeping & scope. Retain FBAR support (statements showing peak balances, ownership, account numbers, and institution details) for at least five years after the FBAR due date. DFSP can cover multiple delinquent years. Accounts include deposit, brokerage, certain pooled funds, and some insurance/annuity contracts with cash value at foreign institutions; signature-only authority can also be reportable.
Practical next steps. List all foreign accounts by year, determine each account’s highest balance, aggregate by year, convert to USD, and confirm that income from those accounts was reported in the relevant tax returns. If any income was omitted, evaluate Streamlined rather than DFSP before filing.
Delinquent FBAR – Frequently Asked Questions
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Taxpayers whose failure to file FBARs was non-willful, who properly reported the income from the accounts and paid the related tax, and who are not under IRS civil examination or criminal investigation.
File each missing FBAR (FinCEN Form 114) electronically via the BSA e-Filing system and include a brief late-filing explanation. Use Treasury year-end exchange rates and report maximum yearly balances in U.S. dollars.
If you meet DFSP criteria, the IRS generally will not impose FBAR penalties for the late years you submit. FBAR is an information filing; it does not itself assess tax. If related income was not reported, DFSP is not appropriate and penalties could apply under other procedures.
You aggregate the maximum values of all foreign accounts for each year. If the combined peak balance exceeded $10,000 at any time in the year, an FBAR is required. Include accounts you own and those where you have signature or other authority.
Our cross-border team prepares and files FBARs, confirms DFSP eligibility, and coordinates with any needed tax return amendments. See our FBAR Service or contact us.
