How much is the non-willful FBAR penalty?
The headline number is a statutory cap, not a fixed bill. After Bittner v. United States (2023), “per violation” has a specific meaning. Here's the math.
The short answer
The statutory baseline is $10,000 per violation, inflation-indexed annually. For violations in 2024 the inflation-adjusted cap was around $16,117. The exact amount depends on the year of violation — always look up the Revenue Procedure for that specific year, not the current year.
“Per violation” is the phrase that controls everything
Before 2023, the IRS argued that “per violation” meant per account on a single FBAR. A taxpayer with 10 unreported foreign accounts on a single year's FBAR was facing 10 non-willful penalties for that year, not one.
The Supreme Court rejected that reading in Bittner v. United States, 598 U.S. 85 (2023). For non-willful FBAR penalties, the violation is the failure to file the form — one form per year, one penalty per year, regardless of how many accounts the form reports.
Bittner did not change willful penalty math. Willful penalties are still assessed per account.
Worked example: 5 accounts × 3 years
A taxpayer with 5 unreported foreign accounts who missed FBARs for tax years 2020, 2021, and 2022 was, under the pre-Bittner IRS reading, facing 15 separate non-willful violations. Total exposure: 15 × (then-current cap of approximately $13,500) ≈ $202,500.
Under Bittner, the same taxpayer faces 3 non-willful violations (one per missed year), capped at the inflation-adjusted amount for each respective year. Total maximum exposure drops to roughly $40,000 — about one-fifth of the pre-Bittner number.
That is the most consequential change in FBAR enforcement in two decades. Any practitioner working on your case should be running the Bittner math, not the pre-Bittner math.
Willful penalty math (for contrast)
Willful FBAR penalties are capped at the greater of (a) approximately $100,000 per violation (also inflation-indexed) or (b) 50% of the account balance at the time of the violation. They are still assessed per account.
A willfulness finding usually requires the IRS to show the taxpayer knew about the FBAR requirement and chose not to file. Common willfulness indicators: previously filed FBARs and then stopped, checked “No” on Schedule B when the taxpayer had foreign accounts, or affirmatively hid accounts from a tax preparer. Reasonable cause does not defeat a willfulness finding — only the underlying willfulness analysis does.
What reduces the proposed amount in practice
- • Reasonable cause — non-willful penalties can be abated entirely if the taxpayer can show the failure was due to reasonable cause.
- • IRM mitigation guidelines — internal IRS guidelines list factors that reduce the proposed amount even short of full abatement.
- • Statute of limitations — the FBAR penalty statute of limitations is 6 years. Years beyond the 6-year window can't be assessed.
- • Streamlined procedures — qualifying non-willful filers can sometimes resolve all penalties through the Streamlined Foreign or Domestic Offshore Procedures instead of fighting the proposal.
For the structure of a reasonable cause response, see how to write an FBAR reasonable cause statement.
Why the actual assessed amount is often lower than proposed
The number on a CP15 is what the IRS examiner has proposed. It is not the assessed amount, and it is not the final number after appeal. Many non-willful FBAR cases that go through reasonable cause review come out at zero penalty or a fraction of the proposed amount.
That outcome is not automatic. It requires a written response inside the window, framed correctly, ideally drafted by a practitioner who handles FBAR cases.
Frequently asked questions
The statutory baseline is $10,000 per violation, adjusted for inflation each year. The 2024 cap was around $16,117 per violation. The IRS publishes the inflation-adjusted amount annually in a Revenue Procedure. Use the year-of-violation amount, not the current year's.
After Bittner v. United States (2023), the non-willful FBAR penalty is per form (per year), not per account. Before Bittner, the IRS argued each unreported account on a single form was a separate violation. The Supreme Court rejected that reading for non-willful cases.
Yes, significantly, for non-willful cases. A filer with 10 unreported accounts in a single year faces one non-willful penalty per year under Bittner, not 10. Willful penalties continue to be assessed per account.
Yes. The statutory cap is inflation-indexed and has been above $10,000 for several years. Always check the Revenue Procedure for the year of the violation.
The IRS issues an annual Revenue Procedure that lists the inflation-adjusted civil penalty amounts. The adjustment compounds from year to year, so the cap creeps up each tax year.
The IRS can assess non-willful penalties for the full open statute of limitations period, which for FBAR is 6 years from the date the FBAR was due. The total exposure is the per-form cap multiplied by the number of years open.
Where to look up the year-of-violation amount
- • 31 U.S.C. §5321(a)(5)(B)(i) — the statutory baseline
- • Annual IRS Revenue Procedure — the inflation-adjusted amount for each year
- • 31 CFR Chapter X — implementing regulations
- • Bittner v. United States, 598 U.S. 85 (2023) — per-form vs per-account ruling
For next year's FBAR
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