For cases involving willful violations over multiple years, examiners will recommend a penalty for each year for which the FBAR violation was willful. In most cases, the total penalty amount for all years under examination will be limited to 50 percent of the highest aggregate balance of all unreported foreign financial accounts during the years under examination. Then the penalty for each year will be determined by allocating the total penalty amount to all years for which the FBAR violations were willful based upon the ratio of the highest aggregate balance for each year to the total of the highest aggregate balances for all years combined, subject to the maximum penalty limitation in 31 U.S.C. Section 5321(a)(5)(C) for each year.

Examiners may recommend a penalty that is higher or lower than 50 percent of the highest aggregate account balance for all unreported foreign financial accounts based on the facts and circumstances. Under no circumstances will the total willful FBAR penalty amount exceed 50 percent of the highest aggregate balance of all unreported foreign financial accounts during the years under examination.

The following is an example. Assume highest aggregate balances of $ 50,000, $ 100,000, and $ 200,000 for 2010, 2011, and 2012, respectively. The total penalty amount is $ 100,000 (50 percent of the $ 200,000 highest aggregate balance during the years under examination).

The total of the highest aggregate balances for all years combined is $ 350,000. The penalty for 2010 is $ 14,286 ($ 50,000/$ 350,000 x $ 100,000). The penalty for 2011 is $ 28,571 ($ 100,000/$ 350,000 x $ 100,000). The penalty for 2012 is $ 57,143 ($ 200,000/$ 350,000 x $ 100,000). The penalty amounts for each year are subject to the maximum penalty limitation under 31 U.S.C. Section 5321(a)(5)(C).