In this episode of Beyond the Ledger.: Blitz Chats, host Shardae Layfield sits down with Matt Pellegrom, Partner in Bennett Thrasher’s International Tax Practice, to break down a significant change to the FBAR reporting landscape. With the IRS eliminating its Delinquent FBAR Submission Procedures, taxpayers who discover missed filings may face a different path forward. Matt explains who may have an FBAR filing requirement, the potential risks and penalties associated with delinquent filings, why acting quickly matters, and what individuals and businesses should consider before deciding their next step.

Takeaways

• FBAR Requirements Extend Beyond Individuals: U.S. persons with a financial interest in or authority over certain foreign financial accounts may have an FBAR filing requirement, making it important for both individuals and businesses to understand their potential obligations.1
• The Delinquent FBAR Process Has Changed: The IRS eliminated the Delinquent FBAR Submission Procedures, removing a pathway that previously allowed certain taxpayers with overdue FBARs to address missed filings without penalties.
• Missed FBARs Can Carry Significant Risk: Penalties can vary substantially depending on the circumstances and whether a failure is considered willful or non-willful, with serious cases potentially carrying significant financial consequences.
• Waiting Could Increase Exposure: Once a taxpayer becomes aware of a potential missed filing, choosing not to address it could create additional risk—particularly if the IRS determines the taxpayer knowingly failed to comply.
• Professional Guidance Is Critical: Individuals and businesses that believe they may have delinquent FBARs should consult a qualified tax professional to understand their circumstances, evaluate available options, and determine an appropriate path forward.

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