Do the Delinquent FBAR Submission Procedures still work in 2026? How to file late FBARs when your income was all reported

DFSP was a page on the IRS website. If your income was all reported and only the FBAR was missing, you filed the late FBARs with an explanation, and the IRS said publicly it wouldn't penalize you. The page came down on July 1, 2026, but the way you file late FBARs and the no-penalty rule in the IRS's internal manual are both still there.

A common story goes like this: someone worked and saved in China, moved to the U.S., filed a return every year and even reported the interest from their Chinese accounts, but never knew about the separate FBAR that goes to FinCEN. It used to be enough to say "file under DFSP and you generally won't be penalized." Since July 2026, that sentence needs more care.

Description: From the IRS page in 2014 to its removal in 2026, and the rules you can still rely on.

When	What happened	What it means for you
2014	The IRS publishes the Delinquent FBAR Submission Procedures page	No penalty for qualifying late FBARs, and no automatic audit because of them
June 24, 2021	Current version of IRM 4.26.16.3.11, Delinquent FBAR Filing Procedures	Sets out how to file and says no penalty is asserted for non-willful, reasonable-cause failures that are properly reported
August 26, 2025	IRM 4.26.16 (FBAR) reissued	The no-penalty language in 4.26.16.3.11 and 4.26.16.5.4 stays
July 1, 2026	The IRS removes the DFSP page; the old URL returns a 404, with no announcement	No more published no-penalty promise
July 30, 2026	The IRS updates its FBAR page	Filing late is a violation and may be penalized; file promptly if you haven't been contacted or investigated
As of October 2026	IRM 4.26.16.3.11 still in effect; streamlined and DIIRSP pages still up	Filing late FBARs is still the right move; the result depends on reasonable cause and the IRS

What did removing the page actually change?

• What changed: Before, the IRS made a public commitment that you wouldn't be penalized if you met three conditions. Now there's no public commitment, and penalties go back to the general rules: was it willful, was there reasonable cause, as judged by an IRS examiner.
• What didn't: The FBAR filing rules, the penalty rules and the way you file late FBARs are unchanged. The IRS hasn't said it will penalize every late FBAR. EY's July 2026 tax alert said it saw no sign that the IRS plans to penalize people whose only problem is a late FBAR.
• Why it happened: The IRS hasn't said. Some practitioners expect the manual to be revised later; as of October 2026 it hasn't been.

So when this guide says "DFSP," it means the same approach: if your income was reported and only the FBAR is missing, file each year late, give your reason, and rely on the reasonable cause rule in the IRM.

All three must be true: the IRS isn't examining you or criminally investigating you; the IRS hasn't contacted you about the missing FBARs; and the income from your foreign accounts was fully reported on your U.S. returns with the tax paid. If the third fails, for example Chinese interest or rent was left off, filing FBARs alone won't fix it.

• No exam or investigation: Once an exam notice arrives, you're no longer coming forward on your own. Work through the exam process.
• No IRS contact about the FBARs: If the IRS has already asked about foreign accounts or requested FBARs, answer that letter. Don't just file quietly and hope.
• All income reported and tax paid: Interest on deposits, wealth product returns, fund distributions, gains on stock sales and rent from property in China all belong on your Form 1040. If one is missing, the problem is bigger than the FBAR.
• Not willful: This is the heart of the no-penalty question. If you knew you had to file and chose not to, late FBARs won't solve it; look at VDP.
• The Schedule B question: Part III of Schedule B asks whether you had foreign accounts. If you checked "No," go over it with a CPA, because it can affect how the IRS views willfulness.

Missed more than the FBAR? Use this chart

Description: Read from the top and follow the first row that fits; rule out an exam, IRS contact and willfulness first.

Your situation	Path	What to do	Penalty
The IRS is examining or investigating you, or has written about your FBARs	Don't just file and move on	Have a CPA read the letter and reply by the deadline	General rules, decided by the IRS
You knowingly didn't file or hid accounts	IRS Criminal Investigation Voluntary Disclosure Practice (VDP)	Talk to an attorney first, then follow the Form 14457 process	Usually much heavier than the other paths
Non-willful, and interest, rent or other income was also left off	Streamlined: SFOP or SDOP (see yclcpa.com/sfop)	3 years of returns and 6 years of FBARs, with Form 14653 or 14654	No penalty under SFOP if you qualify; 5% under SDOP
Income all reported, but Forms 8938, 3520, 5471, 8621 or similar were missed	DIIRSP (see yclcpa.com/diirsp)	Attach the forms to an amended return or file them on their own, with reasonable cause statements; file FBARs separately in BSA	Not guaranteed; depends on reasonable cause
Income all reported and tax paid; only the FBAR was missed	File late FBARs (the DFSP approach)	E-file each year in BSA E-Filing, choose a reason and write an explanation	IRM says no penalty for non-willful, reasonable-cause failures; not guaranteed

• Late FBARs don't cover a missed Form 8938: Form 8938 goes to the IRS with your Form 1040; the FBAR goes to FinCEN. If your foreign assets were over the 8938 threshold (single and living in the U.S.: more than $50,000 at year-end or $75,000 at any time) and you didn't file, attach Form 8938 to a Form 1040-X under DIIRSP, and file the FBARs separately.
• How the FBAR itself works: who files, how the $10,000 test works and which Chinese accounts count are in our guide at yclcpa.com/fbar.

A late FBAR is e-filed in FinCEN's BSA E-Filing system just like a timely one, one per year, on the current electronic form but under that year's filing rules. At the start of the form you pick a reason for filing late; if you choose "Other," you write an explanation. Nothing is mailed, nothing is certified, and no penalty is paid. In practice, people catch up the most recent 6 years.

Description: Six steps, from picking the years to keeping the confirmations.

Step	What to do	Watch out for
1. Pick the years	For each year, check whether you were a U.S. person and your foreign accounts' combined maximum balances topped $10,000	Usually the last 6 years; filing in October 2026, that's typically 2020 through 2025
2. List the accounts	Each account's institution and address, account number, type and highest balance that year	Convert at the Treasury rate for December 31 of that year and round up to the next dollar
3. Check the returns	Confirm the interest and gains from each account were on that year's Form 1040	If anything doesn't match, stop; streamlined may be the right path
4. Fill in the form	Pick the calendar year and the reason for filing late; for "Other," write up to 750 characters	Give a reason on every year's FBAR, based on that year's facts
5. Submit	File each year separately; if a CPA files for you, sign Form 114a first	One FBAR per year, never several years combined
6. Keep records	Save a copy of each FBAR, the submission confirmation and the BSA ID	Keep them with the account records and the notes behind your explanation

What are the reasons on the drop-down list?

FinCEN's FBAR electronic filing requirements (Version 1.4) list these late-filing reason codes, which match the drop-down on the online form:

We choose "Other" and write an explanation. With the page gone, the penalty question turns on reasonable cause, and a checked box such as "Did not know that I had to file" puts no facts on the record. A specific explanation puts your reasonable cause right on each FBAR.

How many years do I file?

• Usually the last 6: The IRS has 6 years from the violation to assess an FBAR penalty, so older years are generally outside that window. Streamlined also asks for the most recent 6 years of FBARs.
• Every year in that window: If you were over the threshold in a year, file it. Don't stop at the most recent one or two.
• Closed accounts count: An account that existed during the year and counts toward the threshold goes on that year's FBAR, even if you closed it.

Stick to true, specific facts: when you became a U.S. person, when the accounts were opened, whether the income was reported, why you didn't know about the FBAR, when you found out and what you did next. Close by saying it wasn't willful. Keep each one to 750 characters, in English.

The usual facts fall into a few groups: you got your green card recently and didn't know about the requirement; the accounts were opened in China before you moved and you lived abroad for years; the income was reported on your U.S. returns every year; your preparer never asked about foreign accounts; and you got professional help soon after finding out. The sample below matches Ms. Wang in the example later on. Rewrite it to match your own facts.

Sample explanation (about 530 characters, including spaces):

• Only what's true: You sign and submit this. If your preparer asked you about foreign accounts, you checked "No" yourself, or you'd heard of the FBAR before, you can't say you didn't know. An untrue explanation is worse than none.
• More than "I didn't know": Reasonable cause asks whether you used ordinary care. Your background, what happened, the fact that the income was reported and how quickly you acted are what make it convincing together.
• Fit each year: If an account was new one year, or you got your green card partway through the period, adjust that year's explanation.
• Keep your backup: Statements, past returns and emails with your preparer, so you can show the facts if the IRS asks later.

There's no guarantee. IRM 4.26.16.3.11 says no penalty is asserted for an account if the failure wasn't willful, was due to reasonable cause, and the account is properly reported on the late FBAR. IRM 4.26.16.5.4 likewise says the non-willful penalty shouldn't be imposed when there's reasonable cause and accurate late or amended FBARs are filed. The old page's line that late FBARs wouldn't be automatically audited is gone, and a late FBAR can still be selected for examination.

• Usually no reply: FinCEN confirms the submission, but the IRS won't write to say "no penalty." You may never hear anything, or you may be selected for examination later.
• If you're examined: The examiner looks at willfulness and reasonable cause. The IRM gives examiners discretion: they can issue the FBAR warning letter (Letter 3800) instead of a penalty, and if they do penalize, they weigh balances, cooperation and any prior violations.
• Not an immunity certificate: If it later turns out you didn't qualify, for example income from China was actually missing or the failure was willful, penalties can still be pursued.
• The 6-year window: Filing late doesn't restart the assessment period, but filing sooner keeps you on the side of having come forward on your own.

These amounts were published by FinCEN on January 17, 2025. The Office of Management and Budget told agencies in April 2026 that there would be no inflation adjustment of civil penalties for 2026, so they still apply as of October 2026.

Example (hypothetical numbers, to show the method): Ms. Wang got her green card in 2018 and lives in North Carolina. She has two accounts in China and reported the interest on her Form 1040 every year, but never filed an FBAR. The IRS hasn't contacted her and the failure wasn't willful, so she fits the late-FBAR approach.

• Why not streamlined: Her income was all reported and the tax paid, so there's nothing to amend and no tax to catch up. Streamlined is meant for people who also missed income, and SDOP would add a 5% penalty on her foreign assets and a certification.
• If her year-end balance had topped $50,000: She'd also have a missing Form 8938, to be attached to Form 1040-X under DIIRSP (see yclcpa.com/diirsp), with the FBARs still filed in BSA.
• If a year's wealth product income was never reported: Then it's not just an FBAR problem. Work out the missing income first, then decide between streamlined and amended returns.

Check three things first: has the IRS contacted you, was any income left off, and was it willful? If none of those apply and only the FBAR is missing, file each year late with your reason. Otherwise, check Figure 2 and follow the situation below.

• Situation A: Income all reported, tax paid, only the FBAR missing. E-file the last 6 years of FBARs in BSA E-Filing, choose "Other" and write your explanation, and keep copies and your backup.
• Situation B: Forms 8938, 3520, 8621, 5471 or similar were also missed. File the information returns under DIIRSP with reasonable cause statements (see our guide at yclcpa.com/diirsp), and the FBARs separately in BSA.
• Situation C: Chinese interest, wealth product income or rent was also left off, and it wasn't willful. Look at streamlined: SFOP if you meet the foreign residency test, SDOP if you live in the U.S., with 3 years of returns and 6 years of FBARs (see yclcpa.com/sfop).
• Situation D: It was willful. Filing on your own isn't the answer, and neither is streamlined. Look at the IRS Criminal Investigation Voluntary Disclosure Practice (VDP). Talk to an attorney first; the attorney evaluates and handles it, and we work with them on the tax computations.
• Situation E: You've already received an IRS letter or exam notice. You're no longer coming forward on your own. Have a CPA read the letter so you know what it is, reply by the deadline, and don't rush to file and move on.