End-of-Year Tax Prep: Ensuring Offshore Account Disclosure Compliance in 2025

If you are one of the many U.S. taxpayers with bank accounts in other countries, you have annual filing obligations beyond filing your federal income tax returns. You must also disclose your offshore bank accounts to the Internal Revenue Services—and potentially to the federal Financial Crimes Enforcement Network (FinCEN) as well. Failure to properly disclose offshore accounts to the IRS or FinCEN can have serious consequences, so if you aren’t sure about your filing obligations in 2025, it is critical that you consult with a Boston international tax attorney who can help you.

Here is a brief overview of the offshore account disclosure rules for 2025:

Who Must Disclose Offshore Accounts to the IRS?

Individual taxpayers living in the U.S. must disclose their offshore accounts to the IRS in 2025 if the total value of their offshore accounts and other foreign financial assets exceeds $50,000 on the last day of the 2024 tax year or exceeds $75,000 at any point during the 2024 tax year. These amounts double for married taxpayers filing jointly, and they quadruple for taxpayers living overseas. The form used to disclose offshore accounts to the IRS is IRS Form 8938.

Who Must Disclose Offshore Accounts to FinCEN?

All taxpayers must disclose their offshore accounts to FinCEN in 2025 if the total value of their offshore accounts exceeds $10,000 at any time during the tax year. The form used to disclose offshore accounts to FinCEN is the Report of Foreign Bank and Financial Accounts (FBAR).

When Are IRS Form 8938 and the FBAR Due?

Both IRS Form 8938 and the FBAR are due on tax day, which is April 15, 2025. However, all taxpayers receive an automatic six-month extension to filing their FBARs, and if you obtain an extension to file your annual income tax return, then IRS Form 8938 is due when you file your return.

What Are the Penalties for Failing to File IRS Form 8938 or an FBAR in 2025?

The penalties for failing to file IRS Form 8938 or an FBAR in 2025 depend on the circumstances involved, including which form(s) you fail to file and whether the failure is willful or non-willful. However, civil penalties start at $10,000, and they can increase to well in excess of $100,000. In cases involving willful failure to file, criminal penalties (including federal imprisonment) may also apply.

What if I Am Behind on My Offshore Account Disclosures?

If you are behind on your offshore account disclosures, you will want to discuss your options with an experienced Boston international tax attorney promptly. Submitting a streamlined filing or voluntary disclosure may be your best option, but you will need to be very careful to avoid triggering unnecessary consequences.

Request a Consultation with Boston International Tax Attorney Kevin E. Thorn

If you need to know more about your offshore account disclosure obligations or the consequences of failing to timely file an FBAR or IRS Form 8938, we encourage you to contact us promptly. Call 617-692-2989 or contact us online to request an appointment with Boston international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.