In wholly unexpected news, the IRS has quietly shut down its Delinquent FBAR Submission Procedures (DFSP), just as it quietly ended the Delinquent International Information Return Submission Procedures (DIIRSP) back in November 2020.
This marks yet another narrowing of amnesty pathways for taxpayers with offshore reporting issues - and it makes the Streamlined Procedures more important than ever.
A Quiet End to DFSP - With No Announcement
For years, DFSP offered a penalty‑free route for taxpayers who simply missed filing FBARs but had no unreported income. It was a practical, low‑friction option. Then, without fanfare, the IRS removed the DFSP page from its website. No press release. No announcement. No replacement procedure.
This mirrors the IRS’s approach in 2020, when it quietly removed DIIRSP - another penalty‑free option - by revising its website to essentially cancel the program.
The pattern is unmistakable: the IRS is steadily shrinking its offshore compliance relief programs, leaving taxpayers with fewer “easy” ways to clean up past mistakes.
What the IRS Says Now
The IRS’s current FBAR page is here. It now offers only a blunt warning:
“Filing an FBAR late or not at all is a violation and may subject you to penalties. If the IRS hasn’t contacted you about a late FBAR and you’re not under civil or criminal investigation by the IRS, you should file late FBARs as soon as possible to keep potential penalties to a minimum.”
That’s it. No mention of DFSP. No mention of penalty relief. No mention of reasonable cause. Just a directive to file late FBARs “as soon as possible.”
This is a dramatic shift from the prior DFSP language, which explicitly stated that taxpayers who met certain criteria would not be penalized.
Why This Matters
The IRS’s removal of DFSP is not just administrative housekeeping. It signals a broader enforcement posture:
- Fewer amnesty programs
- More scrutiny on offshore accounts
- Greater reliance on penalty discretion rather than formal relief procedures
Taxpayers who previously could rely on DFSP now face uncertainty. Filing late FBARs without a formal program means hoping the IRS will exercise discretion - a risky bet.
Streamlined Offshore Procedures: Still Alive, Still Critical
Amid shrinking options, the Streamlined Offshore Submission Procedures remain available - and they are now the IRS’s primary formal pathway for taxpayers who need to fix past offshore reporting issues.
The Streamlined program offers:
- Reduced penalties (or no penalties for foreign residents)
- A clear, structured process
- Protection from future examination on the same issues
Given the IRS’s pattern of quietly shutting down amnesty programs, taxpayers with unfiled FBARs or unreported foreign income should seriously consider using the Streamlined Procedures while they still exist.
The Trend Is Clear
Just like DIIRSP disappeared in 2020, DFSP has now vanished. The IRS is tightening the compliance landscape, and taxpayers who delay may find themselves with no formal relief options left.
If you have unfiled FBARs, foreign accounts, or offshore income issues, the Streamlined Procedures remain the safest structured path forward - and the window to use them may not stay open forever.
