The IRM’s Impact on Delinquent FBAR Procedures Ending

The Delinquent FBAR Submission Procedures and the Delinquent International Information Reporting Submission Procedures (DIIRSP) ‘Delinquency Procedures’ are very common procedures that some U.S. taxpayers use when they want to disclose their foreign accounts, assets, and investments late without going through the more comprehensive streamlined procedures. But the delinquency procedures are not statutory; they are informal procedures that the IRS offers to taxpayers to get into compliance. Previously, there were two versions of the delinquency procedures (DFSP for FBAR and DIIRSP), but as of July 1st 2026, the IRS has seemingly discontinued the Delinquent FBAR Submission Procedures. In practice, these procedures had little application because most taxpayers have additional forms and/or unreported income that require a change to their tax return or additional international information reporting forms that they would have to file in addition to the FBAR – which makes them ineligible for DFSP.

Beware of Online Misinformation re: IRM

Some Tax Attorneys have authored articles about the end of the delinquency procedures, but refer to the Internal Revenue Manual (IRM), and because the Internal Revenue Manual has not yet been updated, this means that Delinquent FBAR Submission Procedures are still active. This is not accurate (the IRM is not law), and taxpayers should be wary of any firm that is still taking taxpayers through the Delinquent FBAR Submission Procedures predicated on the fact that the IRM has not yet been updated.

Neither the IRS website nor IRM is law

First, the Internal Revenue Manual is a form of ‘guidance’ used internally by the IRS examiners and other personnel, which provides taxpayers and tax professionals with insight about how the IRS agents may act when dealing with certain issues. It has become more well-known in recent years because it is available online — but the IRM is not law, and since there are subjective nuances to how certain agents and examiners analyze facts and other scenarios in conjunction with the leeway they have to make taxpayer determinations, the IRM should be taken with a grain of salt.

The IRM Does Not Update as Quickly as IRS Webpages

It is much easier to update a website than the IRM. For example, with DFSP, all the IRS did was simply remove the Delinquent FBAR Submission Procedures. And just because the Internal Revenue Manual has not been updated to reflect the change in IRS procedures does not mean that the Delinquent FBAR Submission Procedures are still active. What is most important is what the IRS has indicated in its most recent update regarding delinquent FBAR filing.

As provided by the IRS:

Filing Delinquent FBARs

- - - Filing an FBAR late or not at all is a violation and may subject you to penalties. If the IRS hasn’t contacted you about a late FBAR and you’re not under civil or criminal investigation by the IRS, you should file late FBARs as soon as possible to keep potential penalties to a minimum.
    - Follow these instructions to explain your reason for filing late. If you’re using a compliance option, such as the Streamlined filing compliance procedures, follow the instructions for the specific compliance option.

Filing Delinquent FBAR without DSFP

- - Even though the IRS has seemingly ‘quietly’ terminated the Delinquent FBAR Submission Procedures, that does not mean taxpayers have to utilize the streamlined procedures in to get into compliance safely. As long as taxpayers can show reasonable cause, they will have a strong position to try to challenge abate or avoid FBAR penalties — even if the Delinquent FBAR Submission Procedures has ended.

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 misses 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.