How to Prepare for Your 2026 Foreign Asset Disclosure (New)

A Foreign Account Reporting Year in Review, Prepare for 2026

How to Prepare for Your 2026 Foreign Account Disclosure

As taxpayers head into 2026, they must assess their foreign accounts, assets, investments, and income holdings to prepare for reporting for their 2025 tax return, FBAR, Form 8938, etc. It is essential to note that taxpayers have the option to extend the time to report on certain forms; however, it is also crucial to consider that not all forms utilize the same mechanisms for filing extensions. For example, while the FBAR is automatically extended through October (subject to change), the Form 8938 only receives an extension if the taxpayer extends the time to file their tax return. Likewise, while Form 3520 is extended by filing a tax return extension, if the taxpayer seeks an extension to file Form 3520-A, they must file an IRS Form 7004. Let’s take a brief look at how taxpayers can assess their foreign account reporting for the new year.

Any Big Changes in 2025 that Impact 2026

Oftentimes, a catalyst for having to report foreign accounts and assets is due to a big change, even for a short amount of time. For example, if the taxpayer only has one foreign bank account with a few thousands in it but recently sold a foreign property so that the value of the account was much larger even for a few days before that money is transferred out of the account, the taxpayer may now have to report the foreign bank account on the FBAR and Form 8938 when they did not have to do so in prior years.

What were the Foreign Account Maximum Values (even if temporarily high)?

For the FBAR and Form 8938, the taxpayer has to report the maximum value during the year compared to even if the account value typically stays low but was only increased for a very short amount. In fact, even if the account remained artificially high for only a day, generally this is still sufficient for the taxpayer to have to file national information reporting forms (presuming that the threshold requirements were met)

Which Foreign Information Forms Do You Have to File?

There are several different international information reporting forms that the taxpayer may have to file, and the threshold requirements for each of the forms differ. Therefore, taxpayers should assess which forms they may have to file in the new year, considering the level of complexity.

Is the Taxpayer Current with their Foreign Account Reporting?

Once the taxpayer assesses what foreign accounts and assets they have and which forms may be required, it is important to determine whether they complied for prior years. If the taxpayer was not in compliance for prior years, then they will want to pause between following the current year because they want to be careful of making a quiet disclosure.

Were Prior Filings Accurate, and Did the Taxpayer File All Necessary Forms?

If the taxpayer did file forms in prior years, they may want to assess whether those previously filed forms were accurate. In general, as long as the taxpayer reasonably and diligently worked to submit accurate forms in prior years, then they will meet the substantially compliant threshold, and minor mistakes should not be a big deal — noting that each situation is different and they will want to specifically assess their own facts and circumstances to determine whether offshore disclosure is warranted.

Getting into Compliance Before Current Year Filing

For taxpayers who determined that they are out of compliance for prior years, they should carefully assess their disclosure options before filing in the current year. The IRS offers various safe options that taxpayers can utilize to get back into compliance and regain their peace of mind.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and/or other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.