FBAR Statute of Limitations: The 6-Year Clock and After

How Long Does the IRS Have to Assess an FBAR Penalty?

Six years. The statute lets the Treasury assess a civil FBAR penalty "at any time before the end of the 6-year period beginning on the date of the transaction with respect to which the penalty is assessed." For a missed filing, the IRS reads the date of the transaction as the form's due date. Under the agency's own manual, the violation happens at the end of the day on April 15 of the following year, so long as a complete and accurate FBAR has not been filed by the automatic October 15 extension date. Our FBAR deadline guide covers the due dates themselves.

Here is what makes this clock unusual. Under the tax code, a return you never file leaves that year open forever, and the IRS can audit a never-filed income tax return from decades ago. The FBAR statute contains no such exception. Its text starts the clock at the due date whether you filed or not, so a genuinely closed year is a real thing in the FBAR world. The FBAR for calendar year 2019 was due April 15, 2020, and absent a signed extension the government's time to assess a penalty for it ran out in April 2026.

That cuts both ways, and the second way is the one people miss. The closing of old years is real relief, and no cleanup should be volunteering penalties for years the government could no longer reach. But six years is a long time. Foreign banks report account data to the IRS every year under FATCA, well inside the window. The IRS asks for extensions when the clock gets short, and refusing carries its own cost, covered below. And every new year you fail to file is its own violation with its own fresh six years, so a person who keeps not filing never actually runs out the clock. The oldest years fall away while the newest stay fully live, and the longer you knowingly wait, the worse the willfulness picture becomes for the years that remain.

The Two-Year Window to Sue, and What an Unpaid Penalty Becomes

Assessment is not collection. An FBAR penalty is not a tax, so the IRS cannot simply lien and levy its way to payment the way it can with an income tax bill. To force payment, the government has to sue, and it has two years to do it, measured from the later of the date the penalty was assessed or the date a related criminal judgment becomes final. The assessment itself usually arrives as a penalty notice with its own short protest window, which our CP15 notice guide walks through.

While the suit window runs, the number grows. An assessed but unpaid FBAR penalty accrues interest, plus a late-payment charge of up to 6 percent a year once the debt is more than 90 days past due, and that charge reaches back to the date of delinquency. Courts have enforced the full six percent. In the Florida case told in full below, a $614,300 penalty assessed in September 2014 had grown to $690,188.69 by August 2016, before any lawsuit was decided.

And a judgment is not the end either. Isac Schwarzbaum, a naturalized citizen whose Florida home was in Boca Raton, was found to have willfully failed to report his Swiss and Costa Rican accounts, and his case shows the full arc. Penalties assessed at roughly $12.5 million in 2016 had swollen, with interest and the late-payment surcharge, to $17,929,717.88 by November 2022. When he did not pay, the court ordered him to repatriate money from Switzerland, held him in contempt when he refused, and in 2026 issued a warrant for his arrest. The two-year window is a genuine deadline on the government. But once the government meets it, time changes sides and works against the debtor from then on.

FBAR Statute Extension Waivers: Should You Sign?

When an offshore examination is still running and the assessment clock gets short, the IRS asks the taxpayer to extend it. This is not improvised. The FBAR has its own named consent, a form titled "Consent to Extend the Time to Assess Civil Penalties Provided by 31 USC 5321 for FBAR Violations." The manual tells examiners to solicit it when fewer than 180 days remain on the statute, to give the filer at least 10 calendar days to respond, and to get a manager's approval before asking. Signing is voluntary.

Two things about these waivers matter in practice. First, the FBAR clock and the tax clock are separate. A consent extending the income tax statute does nothing to the FBAR statute, and the reverse is also true. People sign a tax-side extension and believe the whole examination is now extended. It is not, and the mismatch catches taxpayers and advisors alike.

Second, refusing is not the power move it feels like. An examiner facing an expiring statute does not shrug and close the file. The usual response is to protect the statute by assessing now, at a conservative, high number, instead of finishing the examination with the mitigation and give-and-take that often brings the figure down. There are postures where declining is right, but it is a judgment call about your specific facts, not a reflex. Get advice before you answer either way.

The Criminal Clock

Willful FBAR violations also sit under a criminal statute, with fines up to $250,000 and up to five years in prison, doubled to $500,000 and ten years when the violation happens alongside another violation of US law or as part of a pattern of illegal activity involving more than $100,000 in a 12-month period. The default federal criminal limitations period of five years applies. The civil and criminal tracks interlock in one way worth knowing, because the two-year window to sue on a civil assessment runs from a final criminal judgment when that comes later. A criminal case does not shelter you from the civil bill; it can extend the government's time to collect it. Heading off criminal exposure is exactly what the voluntary disclosure path exists to do, covered at the end of this page.

Does an FBAR Penalty Die With the Taxpayer?

No, and the case that settled the question for Florida is worth telling in full, because families administering estates assume the opposite.

Steven Schoenfeld, a US citizen, opened a Swiss account at UBS in 1993 and never reported it. In September 2014 the IRS assessed a willful FBAR penalty of $614,300 for the 2008 year, half the account's $1,228,600 balance. Steven died in August 2015. The government did not know, and it sued him personally in September 2016, one day inside its two-year window. When a family lawyer's letter broke the news, the government amended its complaint to name his estate and his son Robert, who had received all of his father's assets.

The federal court in Jacksonville sorted it out in a way every Florida family should understand. The named "Estate of Schoenfeld" was dismissed, because under Florida law an estate is not an entity that can be sued. That was no rescue. The court held the FBAR penalty is remedial rather than punitive in nature, so the government's claim survived Steven's death, and it could proceed against Robert personally, as the distributee who had received the money. The court noted it was joining a line of other federal courts letting the IRS pursue FBAR assessments after the account holder's death, and it closed by borrowing an older line from another federal appeals court, that "Death may be an avenue of escape from many of the woes of life, but it is no escape from taxes."

Two cautions about reading that case. It was a ruling on motions, not a trial, and no court adjudicated in that order whether Steven's failure was actually willful. It is also one district court, persuasive rather than binding, though other district decisions holding that the penalty survives death are listed in the sources below.

The practical lesson lands on the personal representative. If you are administering a Florida estate that holds, or ever held, foreign accounts, check the FBAR history before assets go out the door. A penalty that survives death can follow the money into the hands of the people who received it, and an estate that distributes first and asks questions later has handed its beneficiaries the problem personally. Our FBAR penalties guide covers the amounts at stake, and its estate section walks through the cleanup we build into an administration when foreign accounts surface.

The Constitutional Backstop: Excessive Fines

When the clock cannot help, one more backstop exists, and in Florida's federal courts it is now real. The Eighth Amendment forbids excessive fines, and the federal appeals court covering Florida has held that willful FBAR penalties are fines within that protection. As the court put it, "No matter how you cut it, it's apparent that this statute is designed to inflict punishment at least in part."

The holding came in the Schwarzbaum case introduced above, and what the Constitution actually won there is the honest measure of this defense. The court reviewed the penalties account by account, asking whether each was grossly disproportional to the offense. On one small account that never held more than about $16,000, the government had stacked three separate $100,000 penalties, one for each year. Those three were struck. "A fine that is over eight times the amount in the account on the day of the assessment, and over six times the greatest amount ever held in the account, constitutes an excessive penalty." Everything else stood, including the seven-figure penalties on the large accounts, and the judgment was reduced by exactly $300,000, from roughly $12.5 million to $12,255,813. The full story, arrest warrant and all, is in our case study, the $12 million Swiss inheritance.

Whether this defense exists at all depends on geography. The First Circuit, in a case involving a woman in her 80s named Monica Toth, held that the Excessive Fines Clause does not apply to willful FBAR penalties, and the Supreme Court declined to hear her case. Justice Gorsuch, dissenting from the denial of certiorari, wrote that "one can only hope that other lower courts will not repeat its mistakes." The Eleventh Circuit, which governs Florida, expressly declined to follow the First Circuit, and the split remains unresolved. The same penalty can be constitutionally reviewable in Miami and unreviewable in Boston.

One more lesson comes from a 2026 decision in the same circuit. Eugene Niksich raised the excessiveness argument on appeal, and the court agreed the Clause applies to his penalties, but it could not rule for him outright. It sent the case back down so the parties could build a factual record on proportionality, and that issue remains pending on remand. The point for anyone facing a large assessment is that this defense is not a magic word spoken on appeal. The record that proves disproportionality, meaning account balances, penalty-to-balance ratios, and the character of the conduct, has to be built at the trial level from the start. And even built well, it is a trim, not an escape. Three hundred thousand dollars came off a twelve and a half million dollar judgment, and the rest is being collected with an arrest warrant.

Settlement Traps and Refund Claims

The defenses above are about the government's deadlines. Two traps on the taxpayer's side of the table deserve their own warnings, and both come from the same 2026 decision of Florida's federal circuit.

Eugene Niksich thought he had settled. After an examination over a Swiss account he had held under his dog's name, an IRS agent presented a closing agreement with a penalty of $419,123. Niksich signed it and paid on it. The IRS then declined to honor the deal and assessed $2,286,954 instead, and the courts let that stand. The appeals court acknowledged that everything about the exchange looked like a completed settlement, the processed check included, and then delivered the rule in one sentence. "But the IRS agents did not have actual authority to bind the IRS." The signature line for the official who could actually bind the agency, the district court observed, had been left conspicuously blank. Under a Supreme Court rule dating to 1947, anyone dealing with the government bears the risk that the person signing lacks authority, even when that person does not know it. Before you sign or pay on any FBAR settlement, the document itself has to be checked for who signed it and whether that signature binds anyone. The full story is in the account in the dog's name.

The second trap is the refund path. Niksich asked informally for his money back after the IRS kept his settlement payment while repudiating the settlement, and the informal requests accomplished nothing. To recover an FBAR payment the government has wrongly kept, the IRS manual and the court point to one road, a formal refund claim or a refund suit against the government. If money has already left your hands, the fix is a formal filing with its own requirements, not a letter or a phone call, and the sooner it is made, the stronger your position.

What the Clock Means for Timing Your Fix

Put the pieces together and the statute of limitations turns out to be a useful fact and a poor plan. A useful fact, because closed years are genuinely closed, and the cleanup conversation changes when some of the history is beyond the government's reach. A poor plan, because waiting out six years means six years of exposure to FATCA data, examiner letters, and extension requests, while every new unfiled April 15 starts a fresh clock, and the knowing wait itself builds the government's willfulness case for the years still open.

The clock that should drive the decision is a different one. Every IRS cleanup program is open only until the IRS arrives first, whether by opening an examination or by receiving your account information from a third party. That door closes without notice, and it closes for good.

Which door you use turns on the willfulness call, and our willful vs non-willful guide walks that line in detail. A willful history goes through the Voluntary Disclosure Practice, which we handle in-house from preclearance through the closing agreement. A non-willful miss usually resolves through the streamlined procedures, where we run the screen and the legal side and refer the return preparation to an international tax preparer. And a person who reported all the foreign income and only missed the form may still have the penalty-free route described in our delinquent FBAR guide. The screen comes first, because the certification you sign is under penalty of perjury and the wrong lane is expensive in both directions.

Frequently Asked Questions

Common Situations

The personal representative with a foreign account in the estate. A daughter serving as personal representative of her father's Florida estate finds statements for a European account he never mentioned and, it turns out, never reported. Because an FBAR penalty survives death and can be pursued against the people who receive the money, the estate addresses the exposure first, with the willfulness picture screened and the right compliance route chosen, and only then distributes. The beneficiaries take their inheritance without a federal collection suit attached to it.

The client waiting out the clock. A retiree learned about the FBAR three years ago and decided to keep quiet until the six years pass. Since then his bank has reported his account under FATCA every year, three more due dates have come and gone as fresh violations, and the years after he learned of the duty look willful precisely because he knew. The screen shows a streamlined path still open to him today at a defined cost. Waiting would trade that for an open-ended examination he no longer controls.

Sources of Law

• Assessment clock: 31 U.S.C. §5321(b)(1) (6 years "beginning on the date of the transaction"; the text contains no exception for an unfiled report). Violation date fixed at the end of the day April 15 of the following year, if a complete and accurate FBAR is not filed by October 15: IRM 4.26.16.5.2(2) (transmittal Aug. 26, 2025). (retrieved 2026-08-18)
• Collection and growth: 31 U.S.C. §5321(b)(2) (2 years to sue, from the later of assessment or a final criminal judgment); 31 U.S.C. §3717(a), (e) and 31 C.F.R. §901.9(d) (interest, plus a late-payment charge "not to exceed six percent" a year on a debt more than 90 days delinquent, accruing from the date of delinquency); United States v. Reyes, 164 F.4th 78 (2d Cir. 2026) (late-payment charge enforced at the full 6 percent). (retrieved 2026-08-18)
• Consent waivers: IRM 4.26.17.3.1.3, Extending the FBAR Statute of Limitations (transmittal Sept. 4, 2025) (the named FBAR consent; solicited when fewer than 180 days remain, at least 10 days to respond, managerial approval; a Title 26 consent does not extend the FBAR statute). (retrieved 2026-08-18)
• Criminal: 31 U.S.C. §5322 (fines to $250,000 and 5 years, or $500,000 and 10 years for aggravated patterns); 18 U.S.C. §3282(a) (default 5-year criminal limitations period). (retrieved 2026-08-18)
• Survival after death: United States v. Estate of Schoenfeld, 344 F. Supp. 3d 1354 (M.D. Fla. 2018) (the claim proceeded against the sole distributee; the named estate was dismissed because a Florida estate is not a suable entity; no willfulness was adjudicated in the order). Accord, each holding the penalty survives death: United States v. Park, 389 F. Supp. 3d 561 (N.D. Ill. 2019); United States v. Wolin, 489 F. Supp. 3d 21 (E.D.N.Y. 2020); United States v. Gill, No. 4:18-cv-4020, 2021 WL 2682533 (S.D. Tex. June 30, 2021). Park, Wolin, and Gill are cited on citations verified from reliable secondary coverage; those three opinions were not independently reviewed.
• Excessive Fines: United States v. Schwarzbaum, 127 F.4th 259 (11th Cir. 2025) (the Clause applies to willful FBAR penalties; proportionality measured account by account under United States v. Bajakajian, 524 U.S. 321 (1998); three $100,000 penalties vacated; judgment reduced to $12,255,813). Collection posture (repatriation orders, contempt, the 2026 arrest warrant, the $17,929,717.88 debt figure) from the district court record, S.D. Fla. No. 9:18-cv-81147, as retrieved 2026-08-18; the case remains active. Contra: United States v. Toth, 33 F.4th 1 (1st Cir. 2022), cert. denied, 143 S. Ct. 552 (2023) (Gorsuch, J., dissenting from denial of certiorari). United States v. Niksich, No. 24-12882 (11th Cir. June 4, 2026) (published; no reporter citation yet; excessiveness remanded for a factual record).
• Settlement and refunds: Niksich (a closing agreement signed by an agent without actual authority did not bind the IRS, applying Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380 (1947); recovering a kept payment requires a formal refund claim or refund suit, citing IRM 4.26.17.4.4(9) (2025)).
• Disclosure and currency: the cases above are published decisions in other parties' matters, not clients of this firm, and they predict nothing about any reader's case. No citator service has been run; each authority was verified against the opinion or source as retrieved on the dates shown (2026-08-18 unless noted), and later history may exist. The Eighth Amendment question in Niksich remains pending on remand.

Updated on August 18, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. This article is general information about US law, not legal or tax advice, and does not create an attorney-client relationship. The willfulness screen, penalty defense, and voluntary disclosure are handled here; streamlined submissions and return preparation are referred to an international tax preparer. Statutes, penalty figures, and internal IRS guidance change, and everything here was verified as of the retrieval dates in the sources block. Your result depends on your specific facts.