Offshore Bank Accounts
New York Offshore Tax Compliance Lawyers Experienced in FATCA and FBAR Requirements
Individuals, partnerships and businesses with foreign financial holdings must satisfy several additional reporting obligations. Beyond reporting foreign source income to the Internal Revenue Service, taxpayers with assets outside the United States must also disclose these holdings annually. Many clients who want a broader understanding of IRS expectations often review general firm background before meeting with us.
Failure to meet these reporting rules can lead to significant consequences. Civil penalties can be substantial, and willful violations may result in IRS Criminal Investigation involvement. Compliance should be a priority for anyone with foreign accounts or assets. Our New York offshore tax compliance lawyers guide clients through these reporting rules and help resolve disclosure issues efficiently when mistakes have occurred.
Foreign Reporting Obligations: FATCA and FBAR
Two federal laws govern foreign asset reporting. The Foreign Account Tax Compliance Act requires taxpayers with qualifying assets to file Form 8938 with the IRS. The Bank Secrecy Act requires taxpayers with qualifying foreign accounts to file an annual FBAR with FinCEN. Although the thresholds differ, many taxpayers must comply with both systems every year, and each imposes strict accuracy requirements. You can also find related IRS enforcement information if you are preparing for a review.
Determining which assets must be reported and measuring the proper value can be challenging. Errors involving currency conversions, joint accounts, business controlled foreign accounts or high balance thresholds commonly trigger inquiries. Our lawyers help clients evaluate their reporting obligations, gather records and prepare accurate filings that withstand IRS scrutiny.
Updates for 2025 and Beyond: OVDP, FATCA Expansion and Global Enforcement
The IRS continues to strengthen foreign asset enforcement. For 2025, the agency expanded data matching programs that compare FBAR filings, Form 8938 filings, foreign bank disclosures and international information exchange records. FinCEN is also increasing its data sharing with IRS Criminal Investigation to identify undisclosed accounts more quickly. Global transparency initiatives now give the IRS access to more information from foreign financial institutions, trusts and investment platforms.
Although the former Offshore Voluntary Disclosure Program has evolved, the IRS continues to offer voluntary disclosure routes through IRS Criminal Investigation for individuals concerned about past reporting failures. These pathways remain important for taxpayers who face potential willful exposure. Understanding how streamlined procedures and voluntary disclosure frameworks work is essential when navigating any foreign reporting issue.
Offshore Account Disclosure Requirements for U.S. Taxpayers (2026 Update)
The requirements for filing IRS Form 8938 and an FBAR differ. While both forms apply to foreign bank accounts, they establish different filing thresholds, and the filing thresholds under FATCA (for filing IRS Form 8938) cover taxpayers’ other “foreign financial assets” as well.
Here is an overview of the general FATCA and FBAR filing requirements as of January 1, 2026. Taxpayers who have questions or concerns about their filing obligations should consult with one of our firm’s New York offshore account lawyers promptly:
FATCA (IRS Form 8938) Filing Requirements
Taxpayers must file IRS Form 8938 to disclose their “foreign financial assets” if the aggregate value of these assets exceeds the thresholds discussed below. Along with foreign bank accounts, foreign financial assets that are subject to disclosure under FATCA include:
- Foreign stock and securities accounts
- Foreign stocks and securities not held in financial accounts
- Foreign hedge funds and private equity funds
- Foreign mutual funds
- Foreign partnership interests
- Foreign-issued life insurance and annuity contracts
- Qualifying foreign financial assets held by a trust in which the taxpayer is the grantor
In order to be subject to disclosure, the aggregate value of a taxpayer’s foreign financial assets must meet or exceed the applicable threshold under FATCA. FATCA’s disclosure thresholds are as follows:
- Unmarried (or Married Filing Separately) and Living In the U.S.: Total value exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year.
- Unmarried (or Married Filing Separately) and Living Outside the U.S.: Total value exceeds $200,000 on the last day of the tax year or $300,000 at any time during the tax year.
- Married (Filing Jointly) and Living In the U.S.: Total value exceeds $100,000 on the last day of the tax year or $150,000 at any time during the tax year.
- Married (Filing Jointly) and Living Outside the U.S.: Total value exceeds $400,000 on the last day of the tax year or $600,000 at any time during the tax year.
Taxpayers who are subject to FATCA’s disclosure requirements must file IRS Form 8938 with their annual return. Delinquent filings can trigger civil monetary penalties (CMP) of $10,000 every 30 days, subject to a maximum CMP of $60,000. Taxpayers can also face criminal penalties in cases involving allegations of willful noncompliance.
FBAR Filing Requirements
The FBAR filing requirements apply specifically to foreign bank accounts. Under the Bank Secrecy Act, the filing threshold is the same for all U.S. taxpayers regardless of marital status and country of residence.
The FBAR filing threshold remains unchanged for 2026. All U.S. taxpayers must file an FBAR if:
“[The a]ggregate value of financial accounts exceeds $10,000 at any time during the calendar year. This is a cumulative balance, meaning if you have 2 accounts with a combined account balance greater than $10,000 at any one time, both accounts would have to be reported.”
FBARs are due on April 15 regardless of when taxpayers file their annual returns, though all taxpayers receive an automatic six-month extension to October 15. Both willful and non-willful filing delinquencies can trigger CMP (with specific penalty amounts varying depending on the circumstances involved), and willful violations can trigger criminal penalties as well.
Remedying Foreign Reporting Violations
If you are behind on your foreign reporting obligations, it is important to act quickly and address any gaps before they trigger an audit or criminal inquiry. Common solutions include:
- Filing delinquent FBARs or Form 8938
- Submitting streamlined filings
- Submitting a voluntary disclosure through IRS Criminal Investigation
Our New York offshore tax compliance lawyers help clients determine the best option and prepare the required materials. Some taxpayers who also face related payroll or credit related concerns review supplemental ERC insight when preparing their documentation.
Filing a Delinquent FBAR and/or IRS Form 8938
One potential option if you are behind on your offshore account disclosures is to submit a delinquent FBAR and/or IRS Form 8938. We emphasize “potential,” because this approach can be risky. While taxpayers can use delinquent filings to come into compliance, filing late does not insulate taxpayers from penalty liability, and, in some cases, delinquent filings will trigger IRS scrutiny.
Regarding FBARs specifically, taxpayers can file late and avoid penalties if they can demonstrate “reasonable cause” for their delinquency. If you believe that you may have “reasonable cause” for your delinquency (or don’t know and want to find out), our New York offshore account lawyers can assess whether seeking to avoid penalties through a delinquent FBAR filing is an option under the circumstances at hand.
Submitting a Streamlined Filing to the IRS
The IRS’ streamlined filing compliance procedures provide a means for taxpayers to proactively resolve non-willful FATCA and FBAR violations. There are strict eligibility criteria for submitting a streamlined filing, and if the IRS determines that a taxpayer does not meet these criteria, it can launch an audit or investigation based on the information the taxpayer has submitted. As a result, before submitting a streamlined filing, it is imperative to consult with an experienced offshore account lawyer who can accurately assess your eligibility.
Submitting a streamlined filing does not allow taxpayers to avoid penalties altogether. Instead, submitting a streamlined filing is an option for coming into compliance and eliminating the risk of facing an IRS audit or investigation related to the delinquency (or delinquencies) at issue. For taxpayers who cannot afford to pay what they owe, it may be necessary to consider other options (such as seeking an installment agreement or offer in compromise) as well.
Submitting a Voluntary Disclosure to IRS Criminal Investigation (IRS CI)
IRS CI’s Voluntary Disclosure Practice provides a means to resolve willful offshore account disclosure violations without facing criminal prosecution. As IRS CI explains, “[a] voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended.”
Our New York offshore account lawyers have extensive experience guiding taxpayers through the voluntary disclosure process. If submitting a voluntary disclosure is your best option under the circumstances at hand, we can engage with IRS CI to confirm your eligibility, and then we can work with IRS CI to target a favorable resolution on your behalf.
Similar to streamlined filings, voluntary disclosures are subject to specific eligibility criteria; and, when submitting voluntary disclosures, taxpayers must be prepared to pay what they owe—either in full or via an installment agreement with the IRS. Since taxpayers must submit a voluntary disclosure before the IRS initiates an audit or investigation, if you have concerns about offshore disclosure compliance, it is important that you discuss your options with an experienced offshore account lawyer promptly.
Defending Against IRS Audits and Criminal Investigations
If it is too late to correct reporting issues proactively, our lawyers can defend you during an IRS audit or an IRS Criminal Investigation inquiry. We have extensive experience with these high stakes matters, and we work directly with IRS personnel to secure the most favorable resolution possible.
Contact Our New York Offshore Tax Compliance Lawyers in Confidence
If you have questions about foreign financial reporting, need to resolve filing issues or are facing an audit or investigation, our team is available to help. To speak with a New York offshore tax compliance lawyer, call (914) 534-6004 or request an appointment online now.
