IRS Signals an End to the Delinquent FBAR Submission Procedures

For many years, the IRS has offered administrative pathways for taxpayers seeking to return to compliance with federal tax reporting obligations. These initiatives generally allow taxpayers to re-enter the reporting system with some measure of protection from criminal prosecution and, in certain cases, civil penalties. Two prominent examples are the Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Filing Compliance Procedures (SFCP).

These programs exist by administrative choice, not statutory mandate. The IRS offers them under its general enforcement authority, which means the agency may modify or terminate them at any time. For example, the IRS ended the OVDP in 2018, requiring taxpayers with willful domestic or international noncompliance to use the Voluntary Disclosure Practice (VDP). Although the IRS has not yet issued a formal announcement, it appears that a related compliance initiative—the Delinquent FBAR Submission Procedures (“DFSP”)—may have met a similar fate.

The DFSP

Created in 2014, the DFSP became an important compliance option for taxpayers with foreign financial assets. Unlike the OVDP and SFCP, the DFSP allowed qualifying taxpayers with delinquent FBARs to avoid civil penalties altogether if they satisfied the following requirements: (i) the taxpayer was not under an IRS civil examination or criminal investigation, and (ii) the taxpayer properly reported, and paid all U.S. tax on, the income from the foreign financial assets subject to the FBAR reporting obligation. 

Taxpayers who did not meet the second requirement could enter the SFCP to report the foreign income and pay the U.S. tax.  Generally, however, the SFCP required these taxpayers to remit a 5% Title 26 miscellaneous penalty.  Therefore, the DFSP offered a less expensive path to compliance for taxpayers whose issue was limited solely to delinquent FBAR filings. 

The IRS Quietly Terminates the DFSP

In early July 2026, the IRS website that provided DFSP guidance and instructions disappeared.  In its place, the website simply reads “Page Not Found.”  The IRS has not publicly announced its termination of the DFSP.  Still, the deletion is notable because the DFSP website has existed for years without interruptions.  Web archives suggest the page had been available as early as June 18, 2014, without significant revisions moving forward. 

Taxpayer Options

Unless and until the IRS clarifies its position on the status of the DFSP, taxpayers who attempt to submit delinquent FBARs under the DFSP procedures do so at their own peril.  Outside of the DFSP, the IRS may assess FBAR penalties, regardless of whether a taxpayer properly reported and paid income tax on the undisclosed foreign financial asset (although such a fact pattern likely supports a strong reasonable cause defense for a waiver of FBAR penalties). 

If the DFSP is truly gone, taxpayers with international reporting non-compliance now have fewer options.  The SFCP remains an alternative but carries a cost:  taxpayers with substantial U.S. presence must pay a 5% Title 26 miscellaneous penalty on undisclosed foreign financial assets subject to FBAR reporting.  Alternatively, taxpayers may submit late or delinquent international information returns through normal processing channels.  These taxpayers should be mindful, however, of the potential advantages in being proactive and submitting a strong reasonable cause statement or explanation with the delinquent international information returns.  Of course, taxpayers with willful non-compliance factors should continue to consider the VDP, although these taxpayers should take note of the IRS’s recent proposed changes to the program. 

Conclusion

Unless and until the IRS provides additional guidance, taxpayers should be cautious in attempting to submit delinquent FBARs under the DFSP.  In addition, the apparent termination of the DFSP serves as an important reminder that IRS administrative relief and compliance initiatives can change without advance notice. 

If you have any questions about this blog post or another tax-related topic, please feel free to contact me at 214-749-2434 or mroberts@meadowscollier.com.