Last week, the IRS removed one of the clearest penalty protections available to taxpayers who had failed to file FBARs. There was no announcement, no new revenue procedure and no explanation of what taxpayers should do instead.
The IRS webpage for the Delinquent FBAR Submission Procedures simply disappeared. The former link began returning an error, and references to the procedure were removed from other IRS webpages.
This may ultimately turn out to be nothing more than a website update or an attempt to reorganize IRS guidance. But it could also signal a significant shift in how the Treasury Department and IRS intend to handle late FBAR filings. And this makes total sense in the AI world we have entered. Either way, people who regularly need to file FBARs should pay attention.
For a non-willful violation, the current maximum FBAR penalty is $16,536 per annual report. A 2025 FBAR does not become delinquent until after the automatic October 15, 2026 deadline.
Key Points
- The IRS appears to have removed its dedicated Delinquent FBAR Submission Procedures webpage from normal public access.
- Links to the procedure have also been removed from important IRS offshore-compliance pages.
- The former procedure gave qualifying taxpayers a clear statement that the IRS would not impose FBAR penalties.
- Late FBARs can still be filed, but that same categorical no-penalty promise is no longer clearly presented as an available option.
- This does not necessarily mean that every late FBAR will now be penalized.
- Reasonable-cause relief and other offshore-compliance procedures may still be available.
- Anyone with missing FBARs should review the entire situation before simply filing several late forms.
What Is an FBAR?
The FBAR is the Report of Foreign Bank and Financial Accounts. A U.S. person generally needs to file an FBAR when the combined value of their non-U.S. financial accounts exceeds $10,000 at any point during the year.
That does not mean $10,000 in each account.
If someone has $6,000 in one Israeli bank account and $5,000 in another, they may already have crossed the filing threshold. This also includes pension accounts as well, so almost every professional who has been working in Israel over ~5yrs likely has an FBAR filing requirement.
The FBAR is also not filed as part of the individual's federal income tax return. It is a separate Bank Secrecy Act report filed with the Financial Crimes Enforcement Network, better known as FinCEN. FinCEN has delegated civil FBAR examination and penalty authority to the IRS.
That strange split between FinCEN and the IRS is one reason taxpayers are so often confused by the form.
FBARs Used to Be Paper Forms
Back when I started in the profession we always called the FBAR by a different name. Before the current FinCEN Form 114, the FBAR was a paper form called TDF 90-22.1. You filled it out and mailed it separately to the government.
The running joke among tax preparers was that these forms were placed on a shelf in some IRS warehouse or government trailer and never looked at again. For the average person reporting a few normal foreign bank accounts, it often felt like the form disappeared into a black hole.
The FBAR Moved From a Paper Shelf to a Digital Shelf
The paper FBAR was eventually replaced by FinCEN Form 114. Electronic FBAR filing became mandatory on July 1, 2013. The form is now submitted through FinCEN's BSA E-Filing System.
The paper shelf became a digital shelf. For many years, it may have felt like the result was mostly the same. The information was filed and stored somewhere, but unless the taxpayer was audited or already part of an investigation, it did not always appear that anyone was doing much with it.
That may have created a dangerous sense of comfort. A paper form sitting in a box is difficult to compare against millions of tax returns, foreign-bank reports and government databases. A standardized electronic form is something completely different. It can be searched and categorized. It can be matched against Schedule B, Form 8938, FATCA information and prior-year FBAR filings. The information may have been sitting on a digital shelf, but digital shelves can be searched very quickly.
What Were the Delinquent FBAR Submission Procedures?
The Delinquent FBAR Submission Procedures were designed for a fairly specific type of taxpayer.
This was generally someone who had failed to file one or more FBARs but had otherwise properly reported all income from the foreign accounts on their U.S. income tax returns and paid the related tax. The taxpayer could not already be under an IRS civil examination or criminal investigation. The taxpayer also could not have already been contacted by the IRS about the delinquent FBARs. The taxpayer would electronically file the missing FBARs, select a reason for filing late and include an explanation for the delinquency.
The most important part of the procedure was the protection offered by the IRS. The former webpage said that the IRS would not impose an FBAR penalty when the taxpayer had properly reported the income, paid the related tax and had not already been contacted regarding an examination or delinquent returns for the years involved.
That was unusually clear language from the IRS. It did not merely say that the taxpayer could request reasonable cause. It did not say that an examiner would consider the taxpayer's explanation. It said that the IRS would not impose a penalty when the listed conditions were satisfied. For taxpayers who had reported all their foreign-account income but accidentally missed the separate FBAR filing, this was an important safety net.
The FBAR is usually automatically extended until October 15th, while the tax return itself could be extended until December 15th. Using the above submission procedure, it also meant that as long as your tax return was filed by December 15th, if you filed your FBAR at the same time, the chance of any penalty was extremely small.
That has changed, and if someone had to prioritize their zero-tax due return or filing their FBAR by October 15th, I may now suggest they make sure that FBAR get in quickly.
What Changed Last Week?
On June 30th, 2026 the IRS had removed the Delinquent FBAR Submission Procedures webpage. The link returned a 404 error.
References to the page from other IRS webpages were also removed. That made the change appear intentional rather than the result of one isolated broken link. The IRS's main webpage describing options for taxpayers with undisclosed foreign financial assets now identifies several possible compliance programs, including the Criminal Investigation Voluntary Disclosure Practice, the Streamlined Filing Compliance Procedures and the Delinquent International Information Return Submission Procedures.
The Delinquent FBAR Submission Procedures are not included in that list. The IRS has not released a public explanation of the change. But it certainly seems deliberate.
The Important Part Is the Missing Promise
Taxpayers can still electronically file late FBARs. In fact, the IRS's general FBAR guidance currently tells people who have not been contacted by the IRS and are not under examination or investigation to file their late FBARs as soon as possible.
However, that general guidance also states that filing an FBAR late or not filing one at all is a violation that may subject the taxpayer to penalties. That is very different from the former delinquent FBAR procedure. The old procedure said that the IRS would not impose a penalty when the requirements were met. The current general guidance tells taxpayers to file but warns that penalties may apply.
The ability to submit the form has not disappeared. The certainty surrounding the penalty treatment appears to have disappeared.
This Does Not Mean Every Late FBAR Will Be Penalized
People should not panic. The removal of the webpage does not automatically mean that every late FBAR will now receive a penalty. The reasonable-cause exception still exists. Current IRS guidance says that taxpayers who properly report an account on a late-filed FBAR may avoid penalties when the IRS determines that they had reasonable cause for filing late. But reasonable cause is different from the former delinquent FBAR procedure. Reasonable cause requires an analysis of the person's individual facts and circumstances. It is not automatic.
The FBAR penalty for a non-willful violation started at $10,000 but has been going up due to inflation for a few years and is now much higher. For a non-willful violation, the current maximum FBAR penalty for a late 2025 FBAR is $16,536 per annual report, although no penalty may apply when the taxpayer can establish reasonable cause.
There is a major difference between someone who genuinely did not know that a separate electronic form existed and someone who checked “No” on Schedule B after being specifically warned about the foreign-account filing requirement.
There is also a major difference between someone who missed only the FBAR and someone who failed to report the income earned inside the foreign account. The former delinquent FBAR procedure was generally designed for people who had already reported all the income and paid the related tax.
When interest, dividends, capital gains or other foreign income were also omitted, simply filing the missing FBARs may not resolve the larger compliance problem. The taxpayer may need to consider the Streamlined Filing Compliance Procedures, the Criminal Investigation Voluntary Disclosure Practice or another filing approach. This is why filing several late FBARs without reviewing the related tax returns can be a serious mistake.
Why Would the IRS Remove the Procedure?
At this point, we do not know. It could be part of a website reorganization. The IRS may intend to replace the procedure with updated guidance. It may believe that its general reasonable-cause rules are sufficient. It could be reconsidering whether it wants to categorically promise that no penalties will be imposed. Or this could be part of a broader move toward stricter enforcement of foreign-account reporting.
We should be careful not to turn speculation into fact. The IRS has not publicly announced a new FBAR enforcement initiative connected to this change. But removing a taxpayer-friendly procedure without announcing a replacement should not be ignored.
The AI Part Is What Concerns Me
There is no evidence that the IRS removed the delinquent FBAR procedure because of AI. The two should not be directly connected without proof. But we should still think about where the world is going. For years, the government collected enormous amounts of financial information that were difficult to use efficiently. That limitation is disappearing.
AI and modern data-analysis systems can review huge volumes of information quickly. They can identify inconsistencies among forms, tax returns, years and taxpayers. Imagine a system that compares all the old files and sees where the holes or jumps are located.
That does not require an IRS employee to manually pull and compare every form. A computer can identify the mismatches and send the most interesting cases to an examiner. The old FBAR may have sat untouched on a paper shelf. The current FBAR sits in a database. Those are not the same thing.
What Should Someone With Missing FBARs Do?
First, do not assume that because nothing has happened yet, nothing ever will.
Second, do not blindly file several late FBARs without understanding the rest of the situation.
Before filing, determine:
- Which years required an FBAR
- Which accounts should have been reported
- Whether all income from those accounts appeared on the U.S. tax returns
- How the foreign-account questions were answered on Schedule B
- Whether Form 8938 or other international forms were also missed
- Whether the conduct was non-willful
- Whether there is a reasonable-cause position
- Whether the Streamlined Procedures or another compliance option fits the facts
- Whether the IRS has already made contact
A person who properly reported all their foreign-account income may have a much simpler path than someone who also omitted income or international reporting forms. Someone correcting the problem voluntarily is also in a very different position from someone who waits until the IRS finds it. One thing not to do though? Stick your head in the sand and continue to be oblivious to any FBAR filings.
We Have to See How This Plays Out
For years, many people treated the FBAR as a form that disappeared into a government filing system. It may become an even more dangerous practical position as the government becomes better at reviewing and matching financial data. We do not yet know whether the removal of the Delinquent FBAR Submission Procedures signals a major change in enforcement. The IRS may provide replacement guidance. The page may eventually reappear.
The government may continue handling qualifying late FBARs in substantially the same way as before. But as things stand today, the IRS is no longer clearly offering taxpayers the same publicly stated penalty protection that it previously provided. People with missing FBARs should not panic. But they also should not assume that the compliance options available yesterday will always remain available tomorrow.
The right time to review the situation is before the IRS contacts you and before the rules become even less forgiving.
This article is for informational purposes only and does not constitute tax or legal advice. FBAR penalties and compliance options depend heavily on the individual facts. Anyone with delinquent foreign-account reporting should consult a qualified professional before making a submission. If you need help getting back into compliance, reach out, and the offices of Y2J can help get everything straightened up in the best way possible.