Until July 2026, a late FBAR filed with a short explanation came with a published IRS promise of no penalty. That procedure is gone. If your tax returns are complete and only the FBARs are missing, the late reports now go in with a reasonable cause statement, and that statement is what the IRS weighs. Here is what it has to show, an example, and the mistakes that weaken it.

First, check this is your route

A reasonable cause statement fits one situation: your US returns for the years in question are filed, they include the income your foreign accounts earned, and what you missed is the FBAR itself. A teacher whose salary went into a local bank account, who filed a 1040 every year but never knew about FinCEN Form 114, is the typical case.

If the returns are also missing, or left out interest, dividends or gains from those accounts, a statement on its own is the wrong tool. The late FBARs belong inside a Streamlined submission, which handles the returns and FBARs together. And if the IRS has already written to you about these years, do not file anything yet. Speak to a tax attorney first.

What the statement has to show

FBAR penalties are discretionary. For a non-willful violation, the law says no penalty is imposed if the failure was due to reasonable cause and the account balance is properly reported. Reasonable cause, in the IRS’s usual test, means you exercised ordinary care and prudence and still failed to comply. A strong statement covers five things, in this order:

  • The accounts. Which accounts, where, when opened, and what they were for.
  • Why you missed it. The specific reason, in your own words.
  • The income was reported. That the accounts’ income was on your US returns, and any foreign tax paid on it.
  • When you found out. The date you learned of the requirement, and how.
  • What you did next. That you filed every missing year promptly, and will file on time from now on.

An example

This is an illustration, not a template to copy. Your statement has to describe your own facts, and the details below are invented.

I am a US citizen and have taught at an international school in Dubai since August 2020. On arrival I opened a current account and a savings account with a UAE bank, because the school pays salaries only into a local account. I used them for my salary and living costs. Their combined balance first exceeded $10,000 in 2020. I filed a US return for every year from 2020 to 2025 through a US tax software package, reporting my salary and the interest the savings account paid. Neither the software nor the school told me about a separate report for foreign accounts, and I did not know one existed. I learned of the FBAR requirement in September 2026 from a colleague, and engaged an Enrolled Agent the same month. The FBARs for 2020 to 2025 were filed on 20 October 2026. I will file every future FBAR on time. My failure to file was not willful. I did not know of the requirement, the accounts held my local salary, and their income was reported on my US returns throughout.

It works because every sentence is a checkable fact, and the facts line up: an ordinary purpose for the accounts, income already reported, a dated discovery and a prompt fix. It does not argue, apologise at length or quote the law.

What weakens a statement

  • “I didn’t know” and nothing else. On its own it says nothing about care. Surround it with the facts that make it believable.
  • Facts your returns contradict. If the statement says the account only held your salary but a return shows large investment income from it, it fails on the first read.
  • Blaming an adviser without the detail. “My accountant never mentioned it” is stronger with “I gave them my foreign bank statements every year”.
  • Waiting. Each month between finding out and filing works against you.
  • Saying more than you can support. The statement is signed and can be checked.

How to file the late FBARs

Each year is a separate FinCEN Form 114, filed electronically through FinCEN’s BSA E-Filing System, free. File the last six years, the period in which the IRS can assess an FBAR penalty, using the highest balance of each account in each year, converted at the Treasury year-end rate. The form’s first page asks why the report is late. Choose the listed reason that fits, or Other, and give the short version of your explanation. Keep the full signed statement with your records in case the IRS asks for it. My complete FBAR guide covers the filing mechanics in more detail.

Under Bittner v. United States, the non-willful penalty applies per report, not per account. Five accounts on one year’s FBAR are one exposure of up to $16,536, not five. Six late years still carry six exposures, which is why the statement is worth writing well.

Missed some FBARs?

Fifteen minutes with me is enough to tell you whether a statement is enough, or whether the returns need fixing too: jorgerivas.pro/contact.

General information, not tax advice. Originally published on expattaxabroad.com. Sources: 31 U.S.C. 5321(a)(5) and 5321(b)(1); 31 CFR 1010.350; FinCEN Form 114 and the BSA E-Filing System; Bittner v. United States, 598 U.S. 85 (2023); IRS Internal Revenue Manual 4.26.16; the IRS’s withdrawal of the Delinquent FBAR Submission Procedures in July 2026. Checked 6 November 2026.