What Does the IRS’s Removal of the Delinquent FBAR Submission Procedures Mean for Taxpayers?

As of July 2026, the IRS appears to have eliminated the Delinquent FBAR Submission Procedures (DFSP), a longstanding administrative pathway that could allow certain qualifying taxpayers to file delinquent Reports of Foreign Bank and Financial Accounts (FBARs) without penalty.

The IRS has not issued a formal public announcement ending the program. However, the agency removed the webpage containing DFSP guidance and instructions, signaling that this particular compliance option may no longer be available.

For taxpayers who have undisclosed foreign financial accounts or may have missed an FBAR filing requirement, this development makes it especially important to understand their obligations and address potential compliance issues promptly.

The Report of Foreign Bank and Financial Accounts (FBAR), or FinCEN Form 114, is an annual informational report required under the Bank Secrecy Act.

Generally, a U.S. person may have an FBAR filing requirement if they have a financial interest in, or signature or other authority over, foreign financial accounts and the aggregate value of those accounts exceeds $10,000 at any point during the calendar year.

The Bank Secrecy Act was created in part to combat money laundering and other financial crimes through reporting requirements surrounding certain foreign financial interests.

FBARs are filed electronically through the Financial Crimes Enforcement Network’s (FinCEN) BSA E-Filing System rather than as part of an individual’s federal income tax return.

Because FBAR requirements can apply to multiple types of foreign accounts and financial arrangements, taxpayers with international financial interests should review their circumstances carefully each year.

For many years, the IRS offered administrative compliance pathways designed to help taxpayers address past foreign reporting deficiencies.

One of those options was the Delinquent FBAR Submission Procedures.

Under the DFSP, certain taxpayers who had failed to timely file an FBAR could potentially submit a late FBAR without penalties when the filing was voluntary and complete and the taxpayer otherwise met the program’s requirements.

For qualifying taxpayers who discovered an FBAR filing oversight and wanted to make a good-faith effort to return to compliance, this provided an important potential avenue for correcting the issue.

The IRS has not formally announced that it has terminated the DFSP. However, in July 2026, the agency removed the webpage that previously contained the program’s guidance and instructions. That change is significant.

The DFSP was an administrative compliance program rather than a permanent statutory right. As a result, the IRS has the ability to modify or discontinue such administrative programs.

The removal of the IRS guidance therefore appears to signal that the DFSP is no longer available as it previously existed. Until additional formal guidance is provided, taxpayers should not assume they can rely on the former procedures when addressing a delinquent FBAR.

The disappearance of the DFSP does not mean taxpayers should ignore an unfiled FBAR.

Current IRS guidance states that filing an FBAR late, or failing to file one at all, is a violation that may result in penalties. The IRS also advises taxpayers who have not been contacted about a late FBAR and are not under IRS civil or criminal investigation to file delinquent FBARs as soon as possible to help minimize potential penalties.

When filing a delinquent FBAR, taxpayers should follow current IRS and FinCEN instructions, including providing an explanation for why the report is being filed late.

Other compliance options may also remain available depending on a taxpayer’s circumstances. Because the appropriate path can depend heavily on the facts involved, taxpayers should consider consulting a qualified tax professional before determining how to proceed.

Potentially. Even if the DFSP is no longer available, reasonable cause may still provide relief from certain FBAR penalties.

The IRS’s Internal Revenue Manual states that a non-willful FBAR penalty should not be imposed when the violation was due to reasonable cause and accurate delinquent or amended FBARs are filed to correct the violation.

However, reasonable cause is highly dependent on the taxpayer’s individual facts and circumstances. It should not be viewed as automatic penalty relief simply because a taxpayer voluntarily corrects an FBAR.

Establishing reasonable cause can require demonstrating that the taxpayer exercised appropriate care and prudence despite failing to satisfy the reporting requirement. Documentation and the specific circumstances surrounding the failure can therefore become especially important.

The apparent removal of the Delinquent FBAR Submission Procedures could leave some taxpayers with fewer straightforward options for correcting past international reporting deficiencies.

That matters because FBAR violations can carry significant consequences. Civil penalties are possible for both non-willful and willful violations, and applicable maximum penalty amounts are adjusted annually for inflation. Criminal penalties may also apply in certain situations.

The potential consequences make it important to address an FBAR issue thoughtfully rather than simply filing a late form without considering the broader circumstances.

Taxpayers may want to review questions such as:

• Which years have delinquent or incomplete FBAR filings?
• Were the foreign accounts otherwise properly reported for U.S. tax purposes?
• Why was the FBAR filing requirement missed?
• Was the failure potentially willful or non-willful?
• Could reasonable cause apply?
• Is another IRS compliance procedure appropriate for the taxpayer’s circumstances?

The answers can influence the best path toward compliance.

If you believe you may have missed an FBAR filing requirement, addressing the issue sooner rather than later can be important.

Start by gathering information about your foreign financial accounts, including account ownership, signature authority and the maximum value of each account during the applicable calendar years. From there, a tax professional experienced with international reporting requirements can help determine which filings may be required and evaluate available compliance options.

Avoid assuming that the former Delinquent FBAR Submission Procedures are still available simply because they may appear in older articles, guidance or online resources. IRS procedures can change, and the appropriate compliance strategy should be based on current guidance and your individual circumstances.

International tax reporting requirements can be complex, particularly when a taxpayer discovers a filing obligation after the original deadline has passed.

At Froehling Anderson, our tax professionals help individuals and businesses understand their tax reporting obligations, evaluate potential areas of exposure and determine appropriate next steps based on their circumstances.

Whether you’re looking for a CPA in Plymouth or St. Cloud, Minnesota, or experienced tax guidance regarding foreign financial reporting, our team can help you navigate your situation with clarity, proactivity, personalization, and confidence.

If you have questions about a delinquent FBAR, foreign financial accounts or another international tax reporting requirement, connect with your relationship manager at Froehling Anderson.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or audit advice. Please consult with your plan advisor or CPA for guidance tailored to your situation.