How and When to File an Amended FBAR

The Report of Foreign Bank and Financial Accounts (FBAR) is a required annual report for U.S. persons with a financial interest in or signature authority over foreign financial accounts. Filed with the Financial Crimes Enforcement Network (FinCEN), its purpose is to track potential tax evasion and other illicit activities. If you find a mistake on a filed FBAR, FinCEN provides a specific procedure for amending it to ensure you are in full compliance. This process allows filers to correct inaccuracies, from simple typos to omitting an entire account, and is handled through FinCEN’s electronic systems.

Determining the Need for an Amended FBAR

Deciding whether to file an amended FBAR depends on the nature of the error. The distinction is between material errors, which require correction, and minor inaccuracies that may not. A material error misrepresents the report’s core information, hindering the Treasury’s ability to identify the filer, the financial institution, or account specifics.

An amendment is necessary if you discover that an entire foreign account was omitted from your original FBAR. Similarly, if you incorrectly reported the ownership type of an account, such as listing an individually owned account as a joint account, this is a material error. The same applies to incorrectly identifying the filer type, for instance, filing as an individual when it should have been for a trust.

Significant errors in the maximum account value also require correction. While FinCEN does not provide a specific monetary threshold for what constitutes a “significant” error, a misstatement that substantially underreports the account’s peak balance should be amended. Errors in the identifying information of the financial institution, such as a wrong name or an incorrect address that prevents proper identification, are also considered material.

Conversely, minor typographical errors that do not obscure the fundamental data may not necessitate an amendment. For example, a small typo in the street name of a bank that is otherwise correctly identified by its name, city, and postal code would likely not be considered a material error. The guiding principle is whether the error prevents FinCEN from understanding who you are, what accounts you hold, and their approximate value.

Information Required for the Amended Filing

The most important piece of information you will need is the Prior Report BSA Identifier. This is the unique 14-digit number FinCEN assigned to your original FBAR submission. You can locate this BSA Identifier in the confirmation email from the BSA E-Filing System, on Form 9325, or on the PDF copy of your filed FBAR.

You must also have all the accurate information for the accounts being reported. This includes correct account numbers, maximum account values in U.S. dollars, and the precise names and addresses of the financial institutions. If you are adding a previously omitted account, you will need all of its details as if you were reporting it for the first time.

The Amendment Filing Process

The submission of an amended FBAR is handled exclusively through the Financial Crimes Enforcement Network’s BSA E-Filing System. To begin, navigate to the website and start a new FBAR, FinCEN Form 114. Your first action on the form is to check the “Amended” box in Item 1, which then requires you to input the 14-digit Prior Report BSA Identifier from your original submission.

You must then complete the entire form with the corrected information for all foreign accounts, not just the ones that contained errors. After completing all data fields, provide a concise explanation for the change in the designated text box. The final step is to electronically sign the form, affirming under penalty of perjury that the information is correct.

Upon submission, the system will provide a new BSA Identifier for the corrected report. It is important to save a digital copy of the submitted amended FBAR and the confirmation email for your records.

Explanations and Potential Consequences

The explanation you provide on the amended FBAR should be clear, concise, and factual, describing the reason for the correction. For example, an appropriate explanation might be, “Amending to correct the maximum account value for account X and to add a previously omitted account Y.” Avoid lengthy narratives or excuses; the goal is to state the nature of the error.

The potential for penalties depends on whether the mistake is determined to be willful or non-willful. A non-willful error results from a misunderstanding or oversight, whereas a willful error involves an intentional disregard of a known legal duty. Proactively filing an amended FBAR is a strong indicator of non-willfulness and can significantly mitigate or eliminate penalties.

Civil penalties for FBAR violations can be substantial. For non-willful failures to file a complete and accurate FBAR, the penalty can be up to $16,117 per violation. If the failure is found to be willful, penalties can increase to the greater of $161,170 or 50% of the balance in the unreported accounts. These penalty amounts are adjusted annually for inflation, and filing an amended FBAR before being contacted by FinCEN or the IRS is the best way to demonstrate reasonable cause.

If you discover more significant compliance issues, other programs exist. The Delinquent FBAR Submission Procedures are for those who should have filed but did not, and who properly reported all related income on their tax returns. For those with unreported foreign income, the Streamlined Filing Compliance Procedures may be an appropriate path to get back into compliance, provided the conduct was non-willful.