A Primer on Offshore Compliance 2026: A Tax Guide

A Primer on Offshore Compliance 2026: A Tax Guide

How to Stay FBAR, FATCA & Offshore Reporting Compliant

Each year, U.S. taxpayers who own or have an interest in foreign accounts, assets, and investments may be required to file various international reporting forms to comply with U.S. tax rules and regulations. While there are many different types of international information reporting forms that a taxpayer may have to file, two of the most common foreign information forms are the FBAR (FinCEN Form 114) and Form 8938 (FATCA, Foreign Account Tax Compliance Act). The failure to timely file these forms may result in significant fines and penalties; however, the Internal Revenue Service has developed various offshore amnesty programs to assist taxpayers in safely getting into compliance. Here are a few tips for taxpayers to stay in compliance with FBAR, FATCA, and other offshore reporting requirements.

Is the Taxpayer Currently Compliant?

The first issue is whether the taxpayer is already offshore compliant or not. If the taxpayer is not yet in compliance, they should consider one of the offshore amnesty programs, such as the streamlined filing compliance procedures or the delinquency procedures. There are various amnesty programs available to taxpayers, and depending on their facts and circumstances, they may qualify for one or more programs — with each program having its own set of pros and cons.

Avoid a Quiet Disclosure

For taxpayers who are not yet in compliance, they may consider submitting a quiet disclosure, but they should be very careful in doing so. Quiet disclosures are illegal, and if a taxpayer gets caught making a quiet disclosure, they could become subject to fines and penalties in addition to potential criminal investigation for matters such as tax fraud. Taxpayers should also be wary of any tax practitioner who is recommending a quiet disclosure.

Stay Abreast of Due Dates and Threshold Requirements

To remain in compliance, taxpayers should be sure that they are filing their tax forms timely and accurately. Different forms have different due dates and different mechanisms for seeking an extension, so taxpayers should be sure to stay knowledgeable about their current filing due dates and whether they have met the threshold requirements or not.

Best Estimates vs Exact Reporting

Some taxpayers may have several counts, but are hesitant in filing their forms because they may be missing some information about their accounts. Even if a taxpayer does not have all the information, it is generally better to file the forms timely than to avoid filing the forms because some data is missing, which could lead the IRS to the presumption that the taxpayer knew that they had a filing requirement but did not do so, and lead the IRS to take the position that the Taxpayer was willful. 

In other words, for taxpayers who are already in compliance and are getting ready to file their current year return, it is generally better to file the best they can than to avoid filing.

Be Aware of Other Foreign Information Forms as Well

While the FBAR and FATCA are two of the most common foreign information return forms, they are not the only two IRS foreign information forms that taxpayers may have to file. Depending on whether the taxpayer may have received a foreign gift, inheritance, or trust distribution, if the taxpayer is the owner of a foreign corporation, and/or, if the taxpayer owns foreign mutual funds, ETFs, a foreign holding company, or other passive entities, additional forms may be required to file additional forms as well in addition to the FBAR and FATCA.

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.