Yes – married couples can file a joint FBAR in limited circumstances, but it’s not as simple as a joint tax return. FBAR (Foreign Bank Account Report) rules are strict and individual-focused. (Surprising stat: Over 1.5 million FBAR reports are filed each year, yet many couples remain confused about joint filing.) Here’s what this comprehensive guide will cover:
- 👫 Joint FBAR Filing Explained: Learn if and how spouses can file one combined FBAR (FinCEN Form 114) instead of two separate reports.
- 📋 How to Do It Right: Step-by-step process for filing FBAR jointly, including which forms to use (like FinCEN Form 114a), deadlines, and real examples of married couples’ scenarios.
- 🏛️ Law & State Differences: Understand the U.S. federal laws behind FBAR (Bank Secrecy Act), why it exists, and how community property state laws (like California’s) affect jointly held foreign accounts.
- ⚖️ Avoid Penalties & Mistakes: Common FBAR errors couples make (e.g. assuming one spouse’s filing covers both) and what court cases like U.S. v. Boyd teach us about the high stakes of non-compliance.
- 🤔 Expert FAQs Answered: Quick yes/no answers to the most frequent questions (from “Should both spouses file?” to “Does my foreign spouse need to report?”) so you’re fully informed.
Understanding FBAR and Joint Filing Basics
What is the FBAR? FBAR stands for Report of Foreign Bank and Financial Accounts (FinCEN Form 114). It’s a form U.S. persons must file each year if their combined foreign account balances exceed $10,000 at any point in the year. Unlike a tax return, which is filed with the IRS, the FBAR is filed separately with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). Its purpose is to help the government track offshore accounts for tax compliance and anti-money-laundering enforcement.
Individual obligation: The FBAR requirement applies to each individual U.S. person (citizens, green card holders, residents, and certain entities). This means, by default, there’s no such thing as a standard “joint FBAR” the way there is a joint income tax return. Typically, if both spouses have foreign accounts meeting the threshold, each spouse must file their own FBAR. However, there is a special provision that allows a form of joint filing for spouses in specific cases – and that’s where the confusion arises.
Joint tax filing vs. FBAR: Many married taxpayers assume that because they file a joint tax return, they can also file a single joint FBAR. This is not automatically true. In fact, the FBAR is fundamentally an individual filing. The only time you can consolidate FBAR reporting for two spouses is if every foreign account either of you has is held jointly by both spouses (and you complete an authorization form, discussed below). If there are any accounts solely owned by one spouse, a joint FBAR is not allowed – each spouse must file their own.
In summary, the idea of “filing FBAR jointly” only applies in a narrow scenario that we’ll explain. First, let’s directly answer the big question.
Can You File an FBAR Jointly with Your Spouse? (The 3 Conditions)
Yes, you can file one FBAR for both spouses – but only if all of these conditions are met:
- All accounts are jointly owned by both spouses. Neither spouse has any foreign account in their name alone. Every account that needs reporting is a joint account with both names on it. If even one account is individually held by one spouse, each spouse must file separate FBARs (and each will report that joint account on their own form).
- Spouses complete and sign FinCEN Form 114a. Because the FBAR electronic form only accepts one digital signature, one spouse will be the official “filer.” The other spouse must authorize the filer to sign on their behalf. This is done with FinCEN Form 114a, Record of Authorization, which both spouses sign. Important: You don’t submit Form 114a to the government; instead, you keep it in your records (for at least 5 years) in case the IRS or FinCEN asks for it. It basically serves as your written proof that both spouses agreed to have one spouse file for both.
- Timely e-filing through FinCEN’s system by the designated spouse. The spouse who is designated to file (per the Form 114a) must file the FBAR by the annual deadline, including all joint account information and the other spouse’s details in the joint owner sections. The FBAR is filed online through FinCEN’s BSA E-Filing system (or the newer FINCEN Report 114 online form). As long as it’s a timely, accurate filing covering all joint accounts, the non-filing spouse is considered compliant without sending a separate form.
If you cannot meet all the above conditions, you cannot file jointly. Instead, both spouses will file their own FBARs, each reporting the full details of any jointly held accounts (yes, duplicate reporting) as well as their own individual accounts. In other words, a joint FBAR filing is a special exception to avoid duplicate filings when everything is jointly owned. Outside of that scenario, FBAR obligations are individual.
To make this clearer, let’s look at common scenarios for married couples and see who needs to file what.
FBAR Filing Scenarios for Married Couples (Who Files?)
Below is a quick-reference table of three common scenarios regarding foreign accounts for a married couple, and how FBAR filing works for each:
| Married Couple Scenario | FBAR Filing Approach |
|---|---|
| All foreign accounts are jointly held by both spouses. (Neither spouse has any account solely in their own name.) | One joint FBAR filing (optional): One spouse can file a single FBAR covering all the joint accounts, with the other spouse’s authorization (Form 114a). The non-filing spouse does not file a separate FBAR. (If preferred, spouses could file separate FBARs listing the same joint accounts, but that’s more work and not necessary in this scenario.) |
| One spouse has foreign accounts; the other has none. (No joint accounts, only individual accounts in one spouse’s name.) | No joint filing needed: Only the spouse who owns the foreign accounts files an FBAR (reporting all accounts in their name). The other spouse, having no foreign accounts or financial interest to report, does not file an FBAR. (Being married does not by itself require the non-owner spouse to file.) |
| Spouses have a mix of jointly and individually owned foreign accounts. (At least one account is in only one spouse’s name.) | Each spouse files a separate FBAR: Both spouses must file their own FBARs. Each will report all jointly owned accounts (full value, not half) plus whatever accounts they individually own. A joint FBAR is not allowed because both spouses don’t jointly own all accounts. (Yes, joint accounts will be reported by both spouses on their respective forms.) |
In short, the only time a single FBAR can cover both spouses is when every account is a joint account between them. If that’s the case, using one FBAR is convenient and acceptable (just remember to prepare the Form 114a authorization). In any other situation – whether it’s one spouse having any separate account, or both spouses having some accounts separately – each person handles their own FBAR filing.
Where and How to File a Joint FBAR (Step by Step)
Filing an FBAR (jointly or separately) is done online – there’s no paper FBAR form to mail in anymore. Here’s a step-by-step guide for spouses who qualify to file one joint FBAR:
1. Decide who will be the “filing spouse.” By rule, only one spouse’s name can appear as the “Filer” on the FBAR (FinCEN Form 114) because the online form accepts one signature and one set of personal info as the primary filer. Spouses can choose either one of them to be the filer. Often it’s the spouse who is more comfortable with financial forms or who usually handles the taxes.
2. Complete FinCEN Form 114a (Spouse Authorization). Both spouses fill out and sign Form 114a, which is a short authorization form. It designates the filing spouse and affirms that the non-filing spouse authorizes them to include their accounts on a joint filing. Each spouse provides their name, address, Social Security number (or taxpayer ID), and signs it. Do not file Form 114a with the government – just keep it in your records. If the IRS or FinCEN ever questions why one spouse didn’t file their own FBAR, this signed form is your evidence that a joint filing was done with authorization.
3. Gather all required account information. Collect statements or details for all foreign financial accounts that either spouse owns (since all are joint in this scenario). You’ll need the maximum balance of each account during the year, the account number, name and address of the foreign bank or institution, and any other owners’ information. For a joint FBAR, this means you’ll be listing your spouse as a joint owner for each account (typically in Part III of the FBAR form, there are fields for joint owner’s name, address, etc.).
4. File FinCEN Form 114 online. Access the BSA E-Filing system on the FinCEN website (or use the newer FinCEN online FBAR form if available). The filing spouse will log in (you can create a free account or sometimes file as a guest) and start a new FBAR (FinCEN Form 114). Provide your personal information (for the filer) and then enter each foreign account’s details. For each account, you’ll indicate the number of joint owners and enter the other spouse’s information as a joint owner. The form will ask for the joint owner’s name, SSN/ITIN (if applicable), address, etc. Remember, even though the accounts are joint, you must report the full highest balance of each account (do not halve it or split it; each joint owner’s FBAR reports the full value of the account).
5. Sign and submit electronically. Once all accounts are entered and you’ve reviewed for accuracy, the filing spouse will electronically sign the FBAR by entering their identification (usually name and a PIN or password) and submit it through the FinCEN system. Only the filing spouse’s digital signature goes on the form (the system cannot accept two signatures). The non-filing spouse’s consent is documented by the Form 114a you completed offline. After submission, you’ll get a confirmation (a BSA filing reference number). Save this and a copy of the filed FBAR for your records.
6. Retain records. Keep the following in your files for at least 5 years: a copy of the submitted FBAR form, the signed Form 114a, and the underlying account records (account statements or information you used to report the balances). By law, FBAR records generally must be kept for five years from the due date. If either spouse ever faces an audit or inquiry, you may need to produce these documents.
When to file: The FBAR is an annual requirement. The standard deadline is April 15 following the calendar year reported, but an automatic extension is typically granted until October 15. (For example, 2024 FBARs are due April 15, 2025, but you can file as late as Oct 15, 2025 without penalty, as an automatic extension.) Make sure the filing spouse submits the FBAR by the deadline. Late filings can incur penalties unless there’s reasonable cause. If you missed an FBAR in past years, consider speaking with a tax attorney or CPA about catching up via compliance programs.
Important: Filing a joint FBAR does not mean you merge account values for the $10,000 threshold. In other words, if individually neither spouse exceeded $10,000 but together their accounts do, that does not automatically force a joint FBAR. Each spouse looks at their own accounts for threshold. Joint filing is simply a reporting convenience when both names are on all accounts. (If neither spouse exceeds $10,000 on their own, in practice that likely means collectively they don’t either, unless each had $6,000 in different joint accounts – an unusual edge case. In any event, if you truly have under $10k aggregate across all accounts, no FBAR is required by law.)
What about Form 8938 (FATCA)? Don’t confuse FBAR with IRS Form 8938 (Statement of Foreign Financial Assets). Form 8938 is filed with your income tax return and has higher thresholds, especially for joint filers. Married couples filing jointly can file one Form 8938 together on their 1040. FBAR, however, is separate – and as we’ve outlined, only in specific cases do you file one joint FBAR. Always remember to assess both requirements. Many couples will have to file two documents: a joint Form 8938 with their tax return (if they meet FATCA thresholds) and either one joint FBAR or two separate FBARs, depending on the accounts.
Why FBAR Exists (The Law Behind It and Why Compliance Matters)
To fully appreciate the FBAR joint filing rules, it helps to know what FBAR is for and the legal context. The FBAR requirement is part of the Bank Secrecy Act (BSA) of 1970, a federal law aimed at combating money laundering, tax evasion, and other financial crimes. Under the BSA (codified at 31 U.S. Code §5314), any U.S. person with foreign financial accounts over $10,000 must report them annually to the Treasury Department. The rationale is to prevent people from hiding money offshore without the U.S. government’s knowledge.
FinCEN vs. IRS – who’s in charge? FinCEN, a bureau of the Treasury, is tasked with collecting FBARs and enforcing BSA rules. However, the IRS is the agency that actually administers and enforces FBAR compliance in practice. The IRS conducts examinations to check FBAR filings and assess penalties for non-compliance. Essentially, FinCEN owns the rule, but the IRS is the muscle that makes sure people follow it. This is why an FBAR violation typically comes up in the context of an IRS audit or voluntary disclosure rather than a knock on the door from FinCEN itself.
Information sharing: FBAR data is not public. It’s shared among law enforcement and tax authorities. The IRS uses FBAR information to cross-check against tax returns. For example, Schedule B of Form 1040 asks if you have a foreign bank account and if you’re required to file an FBAR. If you tick “yes” on having foreign accounts but the government doesn’t see a corresponding FBAR filed (or vice versa), it raises a red flag. Additionally, since the Foreign Account Tax Compliance Act (FATCA) came into effect, foreign financial institutions report accounts held by U.S. persons to the IRS. The IRS can compare those reports to FBAR filings to catch non-compliance. In short, there are fewer and fewer places to hide an unreported account.
Why compliance matters: Failing to file an FBAR can lead to severe penalties – even if you didn’t owe any tax on those accounts. The penalties for not filing or filing incorrectly can range from hefty civil fines to, in extreme willful cases, criminal charges. Each spouse is independently liable for FBAR obligations. So if one spouse was supposed to file (or be included on a joint FBAR) and didn’t, the IRS can pursue penalties against that spouse individually. This is why it’s crucial for married couples to understand the rules: thinking “my spouse handled it, so I’m fine” could be dangerous if the proper procedure wasn’t followed.
Key point: FBAR is a federal requirement. It doesn’t matter what state you live in or file taxes in – the rules are uniform across all states and even apply if you reside abroad. However, one area where state laws come into play is in determining ownership of accounts, especially in community property states. Let’s explore that nuance next.
State Law Differences: Community Property and Joint Accounts
Some couples wonder if state laws – particularly in community property states – affect their FBAR filing requirements. In the U.S., community property states (like Arizona, California, Texas, Washington, and a few others) consider most assets acquired during marriage as owned 50/50 by each spouse. This can blur the lines of who “owns” an account. For example, if only the husband’s name is on a foreign bank account opened during the marriage in California, state law might say the wife has a half interest in it as community property.
Does community property equal joint account for FBAR? Generally, no. For FBAR purposes, what matters is the account’s legal ownership and control as recognized by the bank and the account documents. If an account is titled solely in Husband’s name, and Wife is not a co-owner or authorized signatory, then under the FBAR rules Wife does not have a “financial interest” or signature authority in that account – despite any community property interest under state law. The IRS and FinCEN do not treat a mere community property interest as triggering an FBAR filing for the non-titled spouse. In simpler terms, FBAR obligations don’t directly change based on state marital property laws. A spouse not named on an account typically isn’t required to file an FBAR for that account just because of community property.
Example: John and Jane live in California (community property state). John opened a foreign savings account in his name only, after they were married, and funded it with his salary (community income). Legally in California, Jane owns half the money in that account. However, for FBAR reporting, Jane is not listed on the account and has no ability to access it on her own. John is the sole owner of record. Therefore, John must file an FBAR if the account exceeds $10,000, but Jane would not file an FBAR for John’s account because she isn’t a named owner or signer. (If John chooses to file a joint FBAR including Jane, that’s not allowed here since the account isn’t joint – it fails the first condition for joint filing.)
Caution: Community property can be complex. Some attorneys suggest that if an account was opened during marriage with community funds, both spouses “hold” it in a community property sense. Yet, practically, unless the spouse’s name is added to the account, only the titled spouse has the FBAR obligation. Always base FBAR filings on the official account title and authority. If in doubt, it’s wise to consult a tax professional, especially in edge cases like inheritance or accounts opened right around marriage.
State taxes and FBAR: No U.S. state has its own FBAR requirement. States generally don’t tax foreign accounts differently from any other assets (though any income from those accounts might be taxable on state returns). Some state tax forms ask if you filed an FBAR or have foreign accounts (as an informational question), but the obligation to file FBAR is solely federal. So whether you’re in New York or Nevada, the rule is the same: comply with the federal FBAR law.
Bottom line: Don’t rely on state property rules to determine your FBAR filings. Focus on account ownership and control. If both spouses are named on an account, treat it as joint for FBAR (and remember you have the joint-filing option). If only one is named, treat it as that person’s account for FBAR, regardless of community property concepts.
The Roles of FinCEN, IRS, Banks, and Tax Preparers in Joint FBAR Filing
Filing an FBAR might seem like a personal task between you and the government, but several players are indirectly involved in ensuring compliance, especially for couples:
- FinCEN (Financial Crimes Enforcement Network): This Treasury bureau is the recipient of FBAR filings. FinCEN sets the form and regulations. When you file an FBAR online, you’re sending it to FinCEN’s database. They generally don’t interact with taxpayers directly for FBAR issues (no confirmation beyond the receipt). Think of FinCEN as the vault where your FBAR data is stored, to be used by enforcement agencies as needed.
- IRS (Internal Revenue Service): The IRS is the enforcer. It has been delegated authority to investigate FBAR violations. If you or your spouse fail to file when required, the IRS can assess penalties or even pursue legal action. FBAR issues often come up when the IRS audits someone’s tax return or when taxpayers enter voluntary disclosure programs to report previously unreported accounts. In a married couple context, an IRS examiner will check if each spouse met their FBAR requirement or properly did a joint FBAR. The IRS also provides guidance (in publications and on IRS.gov) to help taxpayers understand when spouses can file jointly.
- Tax Preparers and CPAs: Many couples rely on professional tax preparers to handle their taxes and sometimes their FBAR filings. A knowledgeable CPA or tax attorney will ask both spouses about foreign accounts. Good preparers know to file separate FBARs for each spouse unless the strict joint filing conditions are satisfied (and they’ll facilitate the Form 114a if going that route). Often, a tax preparer will e-file the FBARs on behalf of the couple – this requires each spouse to sign a Form 114a authorizing the preparer (or one spouse) to submit the form. However, not all preparers are well-versed in FBAR rules, especially the nuance of joint filing. A common mistake is a preparer filing one FBAR listing joint accounts but forgetting that one spouse had a separate account – leaving the other spouse’s obligation unmet. It’s important for you as a taxpayer to double-check this aspect. Make sure your preparer knows about all accounts both of you hold, and confirm together whether one FBAR or two will be filed.
- Foreign and Domestic Financial Institutions: Banks themselves don’t file FBARs for you, but foreign banks may ask U.S. customers to certify their tax compliance (due to FATCA agreements). If you have a joint foreign account, both spouses’ information may be reported by that foreign bank to the IRS through FATCA. This means the IRS could be aware that both John and Jane are associated with, say, a Swiss account. If only John filed an FBAR and Jane didn’t (and they failed to do the spousal joint filing properly), the IRS might flag that. U.S. banks are not involved in FBAR directly, but if you move money from foreign accounts to U.S. accounts, large transfers could draw scrutiny as well. The key point: the financial institutions provide data that can cross-check your FBAR reporting.
- Married Taxpayers (You and Your Spouse): Ultimately, the responsibility lies with the individuals. Both husband and wife should communicate about any foreign accounts either holds. Often, one spouse might not realize an account in their own name triggers an FBAR if they thought filing taxes jointly covered everything. It’s crucial to educate yourselves (as you are doing now) and not make assumptions. One proactive step couples can take is maintaining a shared list of all foreign financial accounts, owners, balances, and ensuring every spring that the FBAR gets handled for both of you. If you’re the spouse managing finances, don’t forget to include your partner in discussions about compliance – and vice versa.
By understanding the roles of each party, married couples can better navigate the FBAR process. For instance, knowing that the IRS cross-checks information might motivate you to be thorough in reporting. Knowing that a foreign bank might report the account to the IRS anyway underscores why hiding it is a bad idea. And treating FBAR with the same seriousness as your tax return is wise, given the penalties involved.
Pros and Cons of Filing a Joint FBAR
If you do qualify for a joint FBAR filing with your spouse (all accounts jointly owned), you might wonder: should we file one together or just do two separate filings? Many choose the joint route for simplicity, but let’s weigh the pros and cons:
| Pros of Joint FBAR Filing | Cons of Joint FBAR Filing |
|---|---|
| One combined report: Only one FBAR form to file instead of two, which can simplify the process and reduce duplicate data entry. | Limited to specific cases: Both spouses must only have joint accounts. If any individual account exists, you can’t use this method. It’s not flexible for changing account situations. |
| Avoids duplicate reporting: A joint FBAR prevents having to report the same joint account on two separate forms (which is what happens with separate filings). | Requires extra step (Form 114a): You need to prepare and sign the authorization form and keep it. It’s an added formality that separate filings don’t require. |
| Simplified record-keeping: All foreign accounts info is in one place. This can help ensure nothing is overlooked and make future reviews easier. | Reliance on one spouse: The non-filing spouse is trusting the filing spouse (or a preparer) to correctly include all accounts. If something is omitted or wrong, both could face consequences. |
| Potentially less overall hassle: Only one person needs to interact with the e-filing system and submit the form. Couples who are new to the process might find it less intimidating to do a single filing. | Joint liability: While each spouse is always liable for their own FBAR duty, when you consolidate into one report, an error on that report could implicate both. There’s a shared responsibility – no “my spouse forgot, not my fault” defense if you chose joint filing. |
| Consistency with joint finances: For couples who treat all finances jointly, filing one FBAR aligns with how they manage accounts (versus each doing separate paperwork for the same accounts). | Optional, not required: If both spouses prefer to file separately for privacy or other reasons, they might see the joint FBAR as unnecessary. (Each can still file their own, even for joint accounts, if they wish.) |
In most cases, if you qualify for a joint FBAR, the advantages (single filing and simplicity) outweigh the downsides, as long as you’re careful. Just ensure complete transparency between spouses about all accounts, double-check the combined report, and maintain that signed Form 114a. If there’s any uncertainty or you anticipate that one of you might open an individual account in the future, you can always revert to separate FBAR filings in those years. The joint FBAR option is there for convenience – it’s not mandatory even when all accounts are joint, but it’s provided to reduce the burden on married couples.
Avoid These Common FBAR Mistakes (Especially for Couples)
Filing FBARs can be tricky, and numerous taxpayers get tripped up each year. Here are some common mistakes and misconceptions to avoid, particularly relevant to married filers:
- Assuming a joint tax return covers FBAR. It bears repeating: your Form 1040 filing status (joint/separate) has no direct bearing on FBAR. Don’t assume that because you filed taxes jointly, you have automatically fulfilled FBAR jointly. They are separate obligations. Many people have mistakenly not filed an FBAR at all because they thought joint taxes meant one spouse’s FBAR covered both. Always evaluate FBAR requirements for each spouse regardless of tax filing status.
- Not filing when under the $10,000 per person but over $10,000 combined. Remember, the $10,000 threshold is applied per person’s accounts (except in a true joint filing scenario, where all accounts are joint anyway). If one spouse alone doesn’t exceed $10k and has no FBAR requirement, that spouse should not file an FBAR just because the couple’s combined accounts exceed $10k. Conversely, if either spouse’s accounts go over $10k, that spouse must file, even if jointly you had less (for example, Husband has $15k in a foreign account, Wife has $2k in a separate account – Wife might think “together we have $17k so we’ll file one FBAR jointly.” Wrong approach: Husband must file an FBAR for his account; Wife is not required to file for her $2k). Each spouse’s obligation stands on its own unless doing the special joint report for joint accounts.
- Forgetting to include the other spouse’s joint accounts on a separate FBAR. If spouses are filing separate FBARs (because not all accounts are joint), each must report the full value of any joint accounts. A common error is one spouse lists a joint account thinking the other will list it, and the other spouse thinks the same or doesn’t file. Both end up under-reporting. For example, a jointly owned foreign account with $50k must appear on both spouses’ FBARs (when filing separately), not split $25k each or only on one form.
- Failing to sign Form 114a or keep it. Couples who file jointly might complete the FBAR online correctly but neglect the authorization form. If the IRS ever inquires, not having that signed Form 114a could be a problem. It’s an easy step to overlook since you don’t send it anywhere. Always complete it for a joint filing and tuck it away safely with your records. Both spouses should sign it each year you file jointly.
- Missing the FBAR deadline or using the wrong year’s form. FBAR deadlines are usually automatically extended, but don’t push your luck. Mark your calendar for April 15 to file, and use the time to October 15 only if needed. If you do get an extension on your tax return, remember that it does not formally extend FBAR (the extension is automatic for everyone, not tied to your tax extension request). Also, be sure to use the correct filing method (the online FinCEN system uses the current form – don’t attempt to mail old paper forms or use outdated PDFs).
- Thinking “no tax due means no FBAR needed.” This is false. FBAR is purely a reporting requirement. Even if your foreign accounts earned zero interest or you reported all income and owe no additional tax, you still must file the FBAR if the threshold is met. Many taxpayers have faced penalties despite having paid all their taxes, simply because they omitted the FBAR. Don’t let the lack of tax impact lull you into ignoring FBAR.
- Mixing up FBAR with other forms. Some people accidentally send an FBAR to the IRS with their tax return (there’s no physical form in the tax packet for it – FBAR must be filed online to FinCEN). Others confuse FBAR with Form 8938 or vice versa, leading them to file one but not the other when in fact many have to do both. Be clear: FBAR (FinCEN 114) goes to Treasury via e-file, Form 8938 goes with your 1040 if required. Married couples filing jointly for tax will file one Form 8938 together, but might still need two FBARs if they have separate accounts.
- Not reporting signature-only accounts. If either spouse has signature authority over a foreign account they don’t own (say, you can sign on a parent’s account abroad or an employer-provided account), that triggers an FBAR filing for the authority-holding spouse too, even if they have no beneficial ownership. Married couples should consider these too. (Signature authority accounts can’t be jointly filed on one FBAR unless both spouses are signers; usually it’s an individual’s responsibility.)
- Ignoring FBAR because the accounts are “small” or inherited or any other reason. Some might think a foreign account with a few hundred dollars or one that’s dormant doesn’t count. If the aggregate still exceeded $10k at any point, it counts. Each year stands alone; going over $10k even for one day in the year triggers that year’s FBAR. Also, be aware that non-reporting can accumulate penalties year over year if not corrected.
If you avoid these pitfalls, you’re well on your way to staying FBAR-compliant. When in doubt, err on the side of reporting or consult a professional. The cost of a mistake can be high, as we’ll see next with some notable penalties and cases.
Consequences of Non-Compliance: Penalties and Notable Court Cases
FBAR penalties are famously severe. Even non-willful violations (basically mistakes or negligence) can draw a penalty up to $10,000 per year (and this base amount is inflation-adjusted, around $14,000 as of mid-2020s). If the IRS determines a violation was willful (meaning you knowingly failed to file or concealed accounts), the penalty can be the greater of $100,000 or 50% of the balance of the unreported account per violation – and each year, each account can count as a separate violation in the worst case. Willful violations can also bring criminal charges, including fines up to $250,000 and even prison time in extreme cases.
For married couples, the exposure is double if both had an obligation and didn’t fulfill it. For example, if both spouses jointly owned an unreported $500,000 account and willfully failed to file FBARs for 2 years, theoretically each spouse could be penalized 50% of the account each year – that’s 200% of the account balance total, a catastrophic outcome. Even for non-willful situations, penalties can add up across multiple accounts or years. However, recent legal developments have provided some relief on how these penalties are applied.
U.S. v. Boyd (2021) and the “per account” vs “per form” debate: A Californian taxpayer, Jane Boyd, was penalized by the IRS for non-willful FBAR violations – specifically, she had 13 foreign accounts in one year that she reported late. The IRS initially treated that as 13 separate violations (one per account), multiplying the $10,000 penalty by 13. Boyd challenged this, and the Ninth Circuit Court of Appeals agreed with her that the statute’s language meant a single $10,000 penalty per annual FBAR form, not per account on that form. In other words, failing to report multiple accounts in one year was one violation (one form not timely or correctly filed), not many.
Supreme Court clarity in U.S. v. Bittner (2023): A similar case with larger stakes, Alexandru Bittner’s case made it to the Supreme Court. Bittner had dozens of accounts and faced millions in aggregate non-willful penalties (the IRS counted each account each year as a violation). The Supreme Court, in early 2023, ruled in favor of the taxpayer: for non-willful cases, the penalty applies per FBAR report, not per account. This landmark decision settled the split between circuits (agreeing with the Ninth Circuit’s view in Boyd). What this means for couples is that if you honestly slip up on an FBAR with multiple accounts, you should face at most one non-willful penalty per year per person, rather than a stack of penalties for every account. That’s far more reasonable and has alleviated some fears about astronomical fines for oversight.
Willful cases remain harsh: Note that the Bittner ruling applies only to non-willful failures. If the IRS asserts willfulness, they often do calculate penalties per account per year (capped by the 50% balance rule). Courts have generally allowed that – and indeed, willful FBAR cases have seen penalties like 50% of the account for each year of violation, sometimes totaling far above the account balance. For instance, there have been cases where couples who hid offshore accounts ended up owing multi-million dollar penalties (and in some cases, facing criminal prosecution). One notable case involved a couple with Swiss accounts where each spouse was assessed a six-figure penalty.
Key takeaway: Don’t risk it. If you’ve missed FBAR filings for prior years, there are IRS programs (such as the Streamlined Filing Compliance Procedures) to come clean with reduced penalties, especially for non-willful situations. The cost of ignoring the FBAR rules is simply too high, and now with courts and data-sharing in the mix, the chances of “getting away with it” are slim. Being proactive and accurate with FBAR – whether jointly or separately – protects both your finances and your peace of mind.
Finally, to address some lingering questions, let’s answer what real people often ask about FBAR joint filing:
FAQ: Joint FBAR Filing and Spouse Questions
Q: Can a married couple file one FBAR together?
A: Yes – but only if every foreign account either spouse has is jointly owned by both. In that case, one FBAR (with Form 114a authorization) covers both spouses.
Q: We file taxes jointly. Do we file a joint FBAR as well?
A: No – not automatically. FBAR is independent of your tax return. Unless all your accounts are joint and you choose to file one FBAR for both, each spouse files their own FBAR.
Q: Do both spouses need to file FBAR if accounts are joint?
A: No – if all foreign accounts are joint, one spouse can file a single FBAR reporting them (with the other’s authorization). Otherwise, if any accounts aren’t joint, each spouse must file their own FBAR.
Q: If only one spouse has foreign accounts, does the other spouse have to file?
A: No. A spouse with no foreign accounts (or under the $10k threshold) does not need to file an FBAR, even if married. Only the spouse who meets the criteria files.
Q: Does my non-U.S. (foreign) spouse need to file an FBAR?
A: No – not if they aren’t a U.S. person. FBAR requirements apply to U.S. citizens, residents, and entities. However, any joint account they hold with a U.S. spouse still gets reported on the U.S. spouse’s FBAR.
Q: If we qualify, is a joint FBAR filing required or just optional?
A: It’s optional. Even if all accounts are joint, spouses may choose to file two separate FBARs (each reporting the full balances). The joint filing provision is simply a convenience offered, not a mandate.
Q: Do FBAR rules vary by state (community property state vs others)?
A: No. FBAR is federal and the rules are the same in every state. State community property laws do not override FBAR’s definition of account ownership for reporting purposes.
Q: What happens if one spouse doesn’t file FBAR but should have?
A: That spouse can face penalties individually. Marriage doesn’t shield you – the IRS can penalize each non-compliant person. If you realize the mistake, consider filing overdue FBARs or entering a disclosure program quickly.
Q: Is FinCEN Form 114a submitted with the FBAR?
A: No. Form 114a (the spouse or third-party authorization) is kept in your records. Do not send it to FinCEN when filing the FBAR. Just retain it in case the IRS asks.
Q: Do we need separate BSA e-filing accounts for each spouse?
A: Not if you’re filing one joint FBAR. Only the filing spouse needs to submit through their account. If filing separate FBARs, each spouse can either use their own login or file as a “guest” separately.