FBAR and FATCA for Brazilians in the US: What to Report and How to Avoid Heavy Penalties
Over $10,000 in Brazilian accounts + any US tax status = you probably must file FBAR. Penalties start at $12,921 per undeclared year. Bittner v. US (2023) limited — but did not eliminate — the risk.
This article is the practical reference for Brazilians with US tax obligations (US persons) who hold accounts, investments, or financial assets in Brazil or anywhere else. FBAR (Foreign Bank Account Report) and FATCA (Form 8938) rules are separate, have different thresholds, and mistakes can lead to severe civil penalties — and in cases of willful evasion, criminal ones.
Who is a 'US person' required to file?
- US citizens (including naturalized Brazilians, even living in Brazil)
- Permanent residents — green card holders, even physically in Brazil
- People satisfying the Substantial Presence Test (weighted 183 days over 3 years)
- Companies formed in the US (including single-member LLCs with US person owner)
- Trusts and estates under US law
Brazilians who naturalized as American and returned to live in Brazil remain 'US persons' — and remain bound by FBAR and FATCA on Brazilian accounts as long as they keep US citizenship. Formal renunciation is the only way to end the obligation (and carries its own costs — $2,350 fee + potential exit tax under 26 USC §877A).
FBAR (FinCEN Form 114) — what it is
| FBAR feature | Detail |
|---|---|
| Threshold | $10,000 or more at any point during the year (combined across all foreign accounts) |
| Form | FinCEN Form 114 (electronic via BSA E-Filing System) |
| Deadline | April 15 (automatic extension to October 15) |
| Filed with | FinCEN (Treasury), not IRS |
| Type | Informational — does not trigger tax |
| Hits US citizens abroad? | Yes, whenever threshold is met |
Updated penalties (2026) — post-Bittner v. United States
In February 2023, the Supreme Court decided Bittner v. United States. Instead of the FBAR civil penalty being per undeclared account, the Court ruled it is per unfiled form. For Bittner, the difference was $2.72 million vs $50,000. But heads up: this applies ONLY to non-willful violations.
| Violation type | 2026 civil penalty |
|---|---|
| Non-willful — post-Bittner | Up to $12,921 per form (not per account) per year |
| Willful | Greater of $129,210 OR 50% of account balance at time of violation, per account, per year |
| Criminal penalties (willful + aggravating) | Up to $500,000 + 10 years prison (31 USC §5322) |
How to remediate if you're behind
- Streamlined Filing Compliance Procedures — for non-willful violations. Requires 3 years tax returns + 6 years FBARs + non-willfulness certification. Penalty: 5% of highest aggregate balance (Streamlined Domestic) or 0% (Streamlined Foreign Offshore, for those abroad).
- Delinquent FBAR Submission Procedures — when taxes were paid correctly but FBAR wasn't filed. No penalty, provided IRS is not already investigating.
- Voluntary Disclosure Practice — for willful violations. Reduces criminal exposure but keeps civil penalty up to 50%. Only recommended when there's real criminal-prosecution risk.
Quiet disclosure (filing late FBARs without using one of the formal programs) is specifically discouraged by the IRS and can increase exposure if discovered. Always use formal Streamlined or Delinquent procedure.
Can I use the Brazil-US treaty?
No — the bilateral treaty was NEGOTIATED in 1967 but NEVER RATIFIED by the US Senate. There is no comprehensive treaty in force. Only the 2018 Social Security Totalization Agreement exists, which affects INSS/Social Security but not FBAR/FATCA. Brazilians use unilateral foreign tax credits to avoid double taxation.
Frequently asked questions
- I'm a Brazilian green card holder. Do I have to file FBAR even living in Brazil?
- Yes. Green card holders are 'US persons' regardless of physical residence. As long as you keep the green card, FBAR and FATCA apply to Brazilian accounts. The obligation only ends with formal abandonment (Form I-407) or automatic loss after >1 year abroad without re-entry permit.
- I have a Brazilian account with R$ 30,000. Do I need to report?
- Depends on the highest exchange rate during the year. If R$ 30,000 exceeded US$ 10,000 at any point (with floating rates, it usually does), you must file FBAR. The threshold is in USD, not local currency.
- Are PGBL and VGBL reportable on FBAR?
- Yes. Brazilian private retirement is considered a financial account for FBAR purposes. Older PGBLs may also receive PFIC (Passive Foreign Investment Company) treatment under 26 USC §1297, with punitive taxation on gains. Case-by-case analysis is essential.
- I forgot to file FBAR for 5 years. What do I do?
- Don't panic — Streamlined Filing Compliance Procedures is the standard path for non-willful violations. Requires 3 years of correct tax returns + 6 years of FBARs + non-willfulness certification. For those abroad: 0% penalty. Do not do quiet disclosure.