Offshore Account Disclosures: Remedying Past Violations and Ensuring Compliance in 2026

Along with reporting their income to the federal government, many U.S. taxpayers are also obligated to report their offshore accounts. Just like underreporting income, failing to report offshore accounts can have serious consequences. Offshore account violations can carry civil or criminal penalties depending on the circumstances involved, and the IRS has aggressively enforced offshore account disclosure compliance in recent years. Learn more from Virginia offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:

Resolving Offshore Account Disclosure Violations

Any taxpayers who have not yet met their offshore account disclosure obligations for 2025 are now delinquent. IRS Form 8938 (which is used to disclose “foreign financial assets”) is due when taxpayers file their annual returns, and the Report of Foreign Bank and Financial Accounts (FBAR) is due on October 15 (after an automatic six-month extension).

Taxpayers who are behind on their federal offshore account disclosures have two primary options for avoiding a civil tax audit or criminal tax fraud investigation:

• Taxpayers who inadvertently failed to file IRS Form 8938 or an FBAR (or both) may be eligible to submit a streamlined filing to the IRS.
• Taxpayers who willfully failed to file IRS Form 8938 or an FBAR (or both) may be able to protect themselves by filing a voluntary disclosure with IRS Criminal Investigation (IRS CI).

This assumes that an audit or investigation is not already underway. If the IRS or IRS CI is already looking into your offshore account disclosure compliance record, submitting a streamlined filing or voluntary disclosure is no longer an option, and you will need to focus your efforts on defending against the audit or investigation. In all scenarios, informed decision-making is critical, and taxpayers who are facing offshore account-related risks should consult with an experienced offshore tax lawyer promptly.

Ensuring Offshore Account Disclosure Compliance in 2026

The obligation to disclose offshore accounts applies annually. Thus, in addition to assessing past compliance, U.S. taxpayers who own offshore accounts must ensure that they are prepared to comply with the law next year as well. For 2026, the offshore account disclosure requirements are as follows:

• IRS Form 8938 – Taxpayers must file IRS Form 8938 if the aggregate value of their “foreign financial assets” exceeds the relevant threshold based on their filing status and country of residence. “Foreign financial assets” include offshore accounts, along with various other types of overseas investments and intangible property.
• FBAR – Taxpayers must file an FBAR in 2026 if the aggregate value of their offshore accounts exceeded $10,000 at any point in 2025. This applies regardless of a taxpayer’s filing status and country of residence.

Due to the substantial risks of noncompliance, taxpayers who own offshore accounts need to make disclosure compliance a priority. We encourage you to get in touch if you need more information.

Schedule a Confidential Consultation with Virginia Offshore Tax Lawyer Kevin E. Thorn

To discuss your offshore account-related compliance obligations with Virginia offshore tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 703-752-3752 or get in touch with us online. We will schedule your confidential consultation as soon as possible.