Missed FBAR or TFSA forms after filing US returns from Canada

I filed US returns every year but never filed an FBAR. What do I do first?

If your US returns reported all the income from the accounts and only the FBARs are missing, file each overdue FBAR as soon as possible, provided the IRS has not contacted you about them and you are not under an IRS civil or criminal investigation. The IRS says that keeps potential penalties to a minimum; it does not promise relief.

An FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114) is a separate report, not an attachment to Form 1040, so filing your US return does not file one. Each covers one calendar year, is due April 15 of the next year (automatic extension to October 15), and is filed electronically through FinCEN's BSA E-Filing System, where individuals can file without registering. One filed after October 15 is late and asks for the reason. The IRS and FinCEN pages set no look-back for an ordinary late FBAR (six years appears only in the streamlined procedure and the penalty clock below), so which years to file needs review.

The FBAR covers accounts anywhere abroad, including joint accounts and accounts of a company you own more than 50% of, even when they earn no taxable income. For a jointly owned account, check whether a spouse's FBAR already reported it. See which accounts count and the reporting thresholds.

Compare the account statements with the returns filed for interest, dividends, gains and registered-account earnings. A Canadian tax exemption does not establish the US treatment, and an omitted-income case may need a different procedure.

The IRS manual provides a reasonable-cause exception for non-willful violations corrected by accurate reports, and allows examiner discretion. Keep the explanation of why each report was late and proof of submission.

Which catch-up route fits, and why might Streamlined Domestic be wrong?

If your US returns reported all your income and only forms are missing, the first three rows below apply. A streamlined procedure is for people who also left foreign-asset income off their returns; living in Canada and having filed Form 1040 do not, by themselves, qualify you.

The Streamlined Foreign Offshore Procedures require a non-willful failure to report foreign-asset income and pay tax; missing forms alone does not meet that condition. For citizens and green card holders, the residence test generally requires no US abode and at least 330 full days outside the US in at least one of the three relevant tax years, for both spouses on a joint submission. Neither streamlined procedure is open to someone under civil examination for any tax year, even one unrelated to foreign assets, or under criminal investigation (IRS). A foreign submission covers three years of returns and information returns plus six years of FBARs, and previously assessed penalties are not abated; what goes in the package is in catching up on missed US returns.

The domestic procedure applies when the foreign non-residency requirement is not met, subject to its other conditions, and generally imposes a 5% offshore penalty. A Canadian address does not resolve that test; someone who meets the foreign test generally falls outside the domestic procedure, even if earlier US returns were filed.

Can I file missing Form 8938 late?

If Form 8938 was required, attach it to an amended income-tax return for the relevant year under the delinquent information-return procedures, provided you are not under IRS civil examination or criminal investigation and the IRS has not contacted you about them. Neither an FBAR nor a late Form 3520 or 8621 replaces it: the instructions excuse an asset only when it is reported on one of those forms timely filed for the same year. Confirm each year's threshold first: the higher thresholds for people abroad apply only if you meet a residence or days-abroad test (see foreign-account reporting).

The Form 8938 instructions provide an initial US$10,000 failure-to-file penalty. If the failure continues beyond 90 days after an IRS notice, a further US$10,000 applies for each 30-day period or part, up to US$50,000 in additional penalties. A tax underpayment tied to an undisclosed specified foreign financial asset can also attract a 40% accuracy-related penalty. On a joint return the failure-to-file penalties apply as if you and your spouse were one person, and each of you is liable for the whole amount. Reasonable cause may provide relief; filing Form 1040 on time does not remove the separate requirement.

Did my TFSA require Forms 3520 and 3520-A?

Whether a TFSA is a foreign trust for US purposes is unsettled; the IRS form instructions and Revenue Procedure 2020-17 do not address it. If it is, and you are treated as its owner, Forms 3520 and 3520-A can be required every year, and no exemption clearly applies. Settle classification, ownership and exemption together before deciding what was missed; the account agreement matters.

A US owner completes Part II of Form 3520 for each year of ownership, even with no transactions, and must ensure the trust files a required Form 3520-A; if it does not, the owner generally attaches a substitute to Form 3520.

Revenue Procedure 2020-17 covers qualifying retirement trusts and qualifying medical, disability or education savings trusts; it does not expressly cover a general-purpose TFSA. Proposed regulations under section 6048 are not final. The Form 3520 instructions let you rely on them only for tax years ending after May 8, 2024, and only if you and related persons apply them in full and consistently, so they do not reach earlier years. The proposal would add a category for tax-favored savings trusts whose combined value in one country stays at or under US$50,000, but its exemption text names only the retirement, medical, disability and education categories, so a TFSA is not clearly covered even under it.

RRSPs and RRIFs are different: the Form 3520 instructions except certain Canadian retirement plans under Revenue Procedure 2014-55. For the classification tests, see Canadian registered accounts on a US return. If the forms were required and never filed, file them on their own; the order and penalty sections below cover how.

Does Revenue Procedure 2020-17 excuse old RESP trust forms?

Revenue Procedure 2020-17 can remove Forms 3520 and 3520-A reporting for an eligible individual with a qualifying education savings trust. It does not declare that every RESP qualifies.

The revenue procedure applies only to an eligible individual, who is compliant, or comes into compliance, with US income-tax filing for the open years and has reported the trust's contributions, earnings and distributions as income where required, including on an amended return, and only to a trust that meets every listed condition. The text does not name RESPs, so each plan's terms must be tested against those conditions, which are set out in Canadian registered accounts on a US return. Whether a given RESP meets them is unsettled.

It applies to all prior open tax years, subject to the refund limits in sections 6402 and 6511, so it is not limited to new plans. If a Form 3520 or 3520-A penalty was already assessed or paid for a qualifying trust, a Form 843 claim can ask for abatement or refund within those limits. FBAR, Form 8938 and income-tax duties remain. For who reports the RESP and how withdrawals are taxed, see RESP and US tax for US citizen families.

In what order should I file the missing forms?

File the overdue FBARs first: the IRS's late-FBAR advice applies only while it has not contacted you about them. Then send Form 8938 and other information returns with amended returns, and file Forms 3520 and 3520-A on their own. Where an omitted-income procedure applies, its instructions control the order.

The Form 8938 and trust-form rows follow the IRS delinquent information-return guidance; the FBAR row follows IRM 4.26.16. For submission steps and penalty-notice responses, see catching up on missed foreign reporting.

Should I get an EIN for my TFSA, and can it lead to old-return requests?

An EIN for the TFSA matters only if Form 3520 Part II or Form 3520-A applies to it, so decide that first. When one does, the instructions for Form 3520 and Form 3520-A identify the trust by its employer identification number (EIN), never your Social Security number. The Form SS-4 instructions limit the online application to applicants with a US residence or place of business; from Canada, apply by phone, fax or mail.

Line 11 of Form SS-4 asks a trust for its funding date or the date it was required to obtain an EIN. No IRS instruction says that obtaining an EIN triggers demands for old trust returns, and none says it does not. Because the application asks for that date, treat it as an open risk to weigh before you apply. The documented exposure is the missing filing itself, if one existed.

How large can the penalties be, and can the IRS send only a warning?

Foreign-reporting penalties can apply even when your return shows little or no tax due, and one account can involve more than one form.

The FBAR figures use the latest published inflation-adjustment table; the ceiling depends on when penalties are assessed. Each missed year is a separate report with its own ceiling (IRM 4.26.17), so the ceilings multiply by the years missed. IRS examiner guidance caps total non-willful FBAR penalties across open years under examination at 50% of the highest aggregate balance of the accounts involved, and has examiners decide separately for each co-owner of an account (IRM 4.26.16); that is a manual limit, not a statute. Trust figures come from the Form 3520 and Form 3520-A instructions; continuing noncompliance after notice can add penalties. These are potential penalties, not a calculation of what your case will cost.

Yes, the IRS can issue FBAR warning Letter 3800 when a monetary penalty is not warranted. That is examiner discretion under IRM 4.26.16, not a warning-first entitlement for all forms.

Is my accountant's failure to tell me reasonable cause?

Your accountant's silence is not automatic reasonable cause. The IRS international-penalty manual says reliance on another person to file returns, by itself, is insufficient.

Document what you disclosed, what advice you requested and received, what the preparer's engagement covered, and when you found and corrected the omission. Keep questionnaires, account documents, correspondence and return copies: they separate actual advice from assuming the preparer handled everything. The IRS's general guidance makes relief depend on the particular penalty and facts.

The IRS considers reasonable-cause statements for Forms 3520 and 3520-A before assessing penalties; other delinquent information returns may be penalized first, which then needs a response. The manual also says an abatement request should include a declaration under penalties of perjury, and recommends that examiners secure every open-year filing before weighing reasonable cause for any one year. File all missing years first and keep the statement factual.

How far back can the IRS go if I never filed the form?

The civil FBAR penalty clock is six years from the due date. For Forms 8938 and 8621 and for trust reporting on Forms 3520 and 3520-A, tax tied to the missing form stays open to assessment until three years after the form is filed, so filing late starts that period. Filing Form 1040 did not start every clock.

A streamlined submission window is a program requirement, not a limit on how far back the IRS can look at an older omission.

When could a missed form be willful, and when should I get help?

Civil FBAR willfulness can include knowingly ignoring the duty, reckless disregard or deliberately avoiding knowledge of it. The IRS manual therefore does not limit willfulness to intentional tax evasion.

Concealed accounts and ignored warnings can matter. The manual calls a wrong or blank answer to the Schedule B foreign-account question "a significant fact to consider", weighed with other facts such as concealment and the amounts involved; it does not decide the question alone. Non-willful conduct and reasonable cause are different standards: an unintentional mistake does not automatically excuse a penalty.

If a missed form looks willful, the non-willful routes stop fitting. The streamlined procedures require certifying non-willful conduct, the willful penalty rows apply instead, and the IRS lists a separate Criminal Investigation Voluntary Disclosure Practice among its offshore compliance options. See catching up on missed foreign reporting. Do not sign a non-willful certification until the facts have been reviewed.

Get professional review before filing if income was omitted, trust classification is uncertain, several years are missing, the IRS has contacted you, or the facts may suggest willfulness. A cross-border tax review can address the forms, income corrections and available routes together.

Gather filed US returns and Schedule B, Canadian returns, annual statements and highest balances, account opening and closing records, contribution and withdrawal histories, account agreements, any EIN correspondence, any spouse's FBAR, preparer communications and every IRS letter.

Example

Illustrative only; balances and income below are in US dollars after conversion.

A US citizen living in Canada filed US returns for four years but never filed FBARs. Canadian accounts held US$80,000 at their highest combined value each year. The filed returns correctly reported US$1,000 of annual account interest and all other required income, and any tax due was paid. Assume no Form 8938 filing was required (US$80,000 is under the Form 8938 threshold for people living abroad) and there was no IRS contact or investigation.

That person checks each year's account list, files the missing FBARs electronically with an accurate late-filing explanation, and keeps the receipts. Missing reports alone do not satisfy the foreign streamlined procedure's omitted-income condition. For scale only: four reports at the current US$16,536 ceiling could reach US$66,144, but the manual's 50% limit on the US$80,000 balance is US$40,000, which would cap an examiner's total. Both apply only if a penalty is assessed; reasonable cause or a warning letter can mean none. Any penalty-relief position still needs support; the assumed facts do not guarantee a result.

If a TFSA also earned US$2,000 a year that was left off the US returns (US$8,000 over the four years), the review changes: account classification, income treatment and the correction route must be assessed together before submitting a package.

Different for you?

• You never filed US returns either: use catching up on missed US returns.
• You need filing steps, reasonable-cause wording or penalty removal: see catching up on missed foreign reporting.
• You need to know whether a TFSA or RESP is a foreign trust or qualifies for relief: see Canadian registered accounts on a US return; for RESP family roles, RESP and US tax for US citizen families.
• You also missed Form 8621 for Canadian funds or ETFs: see funds bought outside the US.
• You are a green card holder who claimed Canadian residence under the treaty: the treaty does not remove the FBAR duty (IRS FBAR guide), and Form 8938 has a dual-resident rule that depends on timely filing Form 8833 with your return (Form 8938 instructions).
• You own a Canadian corporation: its accounts, and the corporation itself, may carry missing reports; see American owners of Canadian corporations.
• You missed Canada's T1135 for US accounts: see missed foreign-property reporting for US accounts.
• The IRS has already written to you: see answering an IRS letter while living in Canada.
• Omitted income, disputed trust treatment, many missing years or possible willfulness: seek a cross-border tax review with the records gathered above.