FBAR Foreign Bank Account Report
FBAR Penalties. The penalties for failure to file an FBAR are worse than tax penalties. Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for eachviolation—and each year you didn’t file is a separate violation.
Go to Jail? Criminal penalties for FBAR violations are even more frightening, including a fine of $250,000 and 5 years of imprisonment. If the FBAR violation occurs while violating another law (such as tax law, which it often will) the penalties are increased to $500,000 in fines and/or 10 years of imprisonment. Many violent felonies are punished less harshly.
Moreover, the assessment of a civil penalty does not preclude criminal penalties or prosecution. Fortunately, one IRS official has said that the IRS may decide to simply issue a warning letter rather than penalties. The goal is compliance with the rules, the IRS suggests, not penalties.