What are the current 2025 FBAR penalty ceilings — and does the 50% rule still apply?

FBAR maximum civil penalties for assessments made on or after January 17, 2025: NON-WILLFUL: $16,536 per violation. WILLFUL: $165,353 per violation OR 50% of the amount in the account at the time of the violation, whichever is greater. These are the inflation-adjusted maximums under 31 CFR Part 1010, replacing the original statutory caps of $10,000 (non-willful) and $100,000 (willful). The adjustments are made annually under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

The willful penalty maximum is the GREATER of two amounts: $165,353 or 50% of the relevant balance. For high-balance accounts, the 50% leg dominates. Example: foreign account balance at time of violation = $1 million → maximum willful penalty = $500,000 (50% of $1M, since that exceeds $165,353). Across multiple years and accounts, willful FBAR exposure can run into millions. The 50% rule is the reason willful FBAR examinations are aggressive and often litigated.

The 2023 Supreme Court decision in Bittner held that the NON-willful FBAR penalty applies per annual report, not per account. So multi-account, multi-year non-willful exposure is capped at $16,536 per year. But Bittner doesn't apply to willful violations — willful penalties remain per-violation, and a single year with 5 unreported accounts can produce 5 separate willful penalties (each potentially up to greater of $165,353 or 50% of balance). The non-willful vs willful classification is therefore enormously consequential.

31 USC § 5321(a)(5)(B)(ii) provides a statutory reasonable-cause defense for NON-WILLFUL violations: no penalty if (1) the violation was due to reasonable cause AND (2) the amount of the transaction or balance was PROPERLY REPORTED. The second prong is a high bar — if you didn't report the income from the foreign account on your Form 1040 either, the defense doesn't fully apply. The reasonable-cause defense is structurally narrower than the income-tax reasonable-cause defense and demands documentation of (a) what caused the failure and (b) ordinary business care and prudence.

If your aggregate foreign account balance ever exceeded $500K-$1M at any time during years of non-filing, the willful 50% rule creates very high exposure. Get experienced counsel early. The IRS Streamlined Filing Compliance Procedures (separate Q&A) may be available if you can certify non-willful conduct — the SDOP penalty is 5% of the high-balance year-end aggregate for unreported foreign accounts and assets (significantly less than statutory willful exposure). Don't wait until the IRS contacts you; the Streamlined certification is unavailable once the IRS has initiated examination.