A retired couple in Las Cruces with a peso savings account in Ciudad Juarez, a Sandia engineer who never closed an account in Bangalore, and a Santa Fe transplant drawing a British pension all owed the same report on April 15, 2026, and none filed it. What is left is the FBAR deadline October 15, 2026, the last date a 2025 FinCEN Form 114 is timely.
Foreign account reporting problems in New Mexico are rarely about hidden money. Dona Ana County families bank on both sides of the line, the labs recruit scientists born abroad, and retirees reach Taos with a pension account still held overseas. The FBAR is an information report under the Bank Secrecy Act, not a tax return, but its penalties live in Title 31.
Where does the October 15, 2026 FBAR deadline come from?
Section 2006(b)(11) of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Pub. L. No. 114-41, provides that “[t]he due date of FinCEN Report 114 (relating to Report of Foreign Bank and Financial Accounts) shall be April 15 with a maximum extension for a 6-month period ending on October 15.” The IRS FBAR page says a filer is “allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15.” For 2025 accounts that is October 15, 2026.
31 C.F.R. § 1010.306(c) still sets the due date at “June 30 of each calendar year,” text predating the 2015 statute that was never conformed. The statute controls; the stale regulation misleads.
Which New Mexico households and businesses owe an FBAR?
Under 31 C.F.R. § 1010.350, a United States person with a financial interest in, or signature or other authority over, a foreign account reports it once the aggregate maximum value of all such accounts passes $10,000 during the year.
The New Mexico patterns cluster. Border families in Sunland Park, Santa Teresa, and Columbus keep a Mexican account for a parent in Palomas. A Mexican AFORE retirement account sits at a foreign institution, and § 1010.350(c) reaches cash-value insurance, annuities, and pooled funds. Researchers at Los Alamos and Sandia hold dormant home-country accounts, and a New Mexico LLC is a United States person under § 1010.350(b) even when disregarded. Form 8938 is a separate report, which the IRS comparison of Form 8938 and FBAR requirements starts at $50,000 for a single filer living in the United States.
Fideicomiso beach property trips people up. Rev. Rul. 2013-14, 2013-26 I.R.B., holds that a Mexican land trust whose bank trustee only holds and transfers legal title “is not a trust” under Treas. Reg. § 301.7701-4(a). The FBAR item is the peso account opened alongside it.
Is a bank account on tribal land in New Mexico foreign?
No. 31 C.F.R. § 1010.100(hhh) defines the United States as “[t]he States of the United States, the District of Columbia, the Indian lands (as that term is defined in the Indian Gaming Regulatory Act), and the Territories and Insular Possessions of the United States.” An account at a branch on Pueblo land is domestic. The test is where the account sits, not who owns the institution: a United States bank branch in Ciudad Juarez is foreign, and a Mexican bank branch in Albuquerque is not.
What is the FBAR penalty, and how much did Bittner narrow it?
31 U.S.C. § 5321(a)(5) sets two tiers. The non-willful cap is $10,000, with an exception in § 5321(a)(5)(B)(ii) barring any penalty where the violation “was due to reasonable cause” and the balance “was properly reported.” Section 5321(a)(5)(C) raises the willful ceiling to $100,000 or half the balance, whichever is greater.
Both caps are indexed. 31 C.F.R. § 1010.821 sets $16,536 non-willful and $165,353 willful for penalties assessed on or after January 17, 2025, with no 2026 increase: OMB Memorandum M-26-11 (April 17, 2026) told agencies there would be “no updated cost-of-living adjustment multiplier for 2026.”
In Bittner v. United States, 598 U.S. 85 (2023), the Supreme Court held the non-willful maximum “accrues on a per-report, not a per-account, basis.” Section 5321(b)(1) gives Treasury six years to assess, and IRM 4.26.16 leaves the examiner discretion over “the amount of the penalty, if any,” with a warning letter as an alternative.
Facing a Missed FBAR Deadline in New Mexico? Contact Us Now
What are the three ways to fix a missed FBAR after October 15?
The first is a delinquent filing: the late report goes through the BSA e-filing system with a reasonable cause statement built on § 5321(a)(5)(B)(ii) and IRM 4.26.16. The standalone Delinquent FBAR Submission Procedures page no longer resolves on irs.gov, and the parallel page for delinquent international information returns says nothing about FBARs.
The second is the Streamlined Domestic Offshore Procedures, open only where the failures “resulted from non-willful conduct.” It takes three years of amended returns, six years of FBARs, a certification, and 5 percent of the highest year-end value of the unreported assets.
The third is the IRS Criminal Investigation Voluntary Disclosure Practice, for willful conduct. It runs on Form 14457 and buys no immunity: a disclosure “will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended.” The IRS proposed redesigning it in IR-2025-124 (December 22, 2025) and has published no final program.
Has the Tenth Circuit said what makes an FBAR violation willful?
No published Tenth Circuit decision setting the civil FBAR willfulness standard turned up on review, so New Mexico filers argue against out-of-circuit authority. In United States v. Hughes, No. 23-15712 (9th Cir. Aug. 21, 2024), the Ninth Circuit held that “willful violations of the FBAR statute include both knowing and reckless violations,” requiring proof that the filer “clearly ought to have known that there was a grave risk” the requirement was not met. That court joined the Third, Fourth, Sixth, Eleventh, and Federal Circuits, all reasoning from Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007). The damaging fact is rarely the account; it is the Schedule B question answered no year after year.
What would a missed FBAR cost a Las Cruces couple?
Take a hypothetical. A Las Cruces couple held three Mexican accounts in 2025: Banorte checking, BBVA Mexico savings, and an investment account. Combined maximum value was $140,000, the December 31 total $132,000, and unreported interest about $3,200 a year. No FBAR was filed for 2019 through 2025.
Non-willful exposure across the six years open under § 5321(b)(1) runs to $16,536 per report, or $99,216 for one spouse and double that if each spouse files. Streamlined Domestic Offshore instead produces 5 percent of $132,000, or $6,600, plus roughly $2,100 of tax. A willful finding would carry a $165,353 ceiling, since half of $140,000 is less.
NMSA 1978 § 7-2-2 builds New Mexico base income from adjusted gross income under Internal Revenue Code § 62, so the same interest raises the state return. NMSA 1978 § 7-1-13 calls for a “federal adjustments report” within 180 days.
This is where an attorney who also holds a CPA license earns the fee. Per the FBAR Reference Guide, the report carries “a reasonable approximation of the greatest value” during the year, converted at the Treasury rate for December 31. The streamlined base uses year-end values, so the two diverge whenever an account peaks mid-year.
| Approach | Basis | Result | Left open |
|---|---|---|---|
| Six late FBARs | $16,536 per report | $99,216 per spouse | Tax on interest |
| Per-account theory, rejected | $16,536 per account-year | $297,648 | Foreclosed |
| Warning letter, IRM 4.26.16 | Examiner discretion | No penalty | Tax and interest |
| Streamlined Domestic Offshore | 5 percent of $132,000 | $6,600 plus $2,100 | No criminal shield |
| Willful finding | $165,353 or half of $140,000 | $165,353, one year | Criminal exposure |
Frequently Asked Questions
When is the FBAR for 2025 foreign accounts due?
April 15, 2026 was the regular due date, and October 15, 2026 is the automatic extended date. Section 2006(b)(11) of Pub. L. No. 114-41 sets April 15 with a maximum six-month extension ending October 15. A report filed later is delinquent.
What is the FBAR penalty for a non-willful failure to file?
31 U.S.C. § 5321(a)(5)(B)(i) caps the non-willful penalty at $10,000, adjusted by 31 C.F.R. § 1010.821 to $16,536 for penalties assessed on or after January 17, 2025. OMB Memorandum M-26-11 cancelled the 2026 adjustment. Under Bittner v. United States, 598 U.S. 85 (2023), the cap is per report.
Does an account at a bank on tribal land in New Mexico go on an FBAR?
No. 31 C.F.R. § 1010.100(hhh) defines the United States to include Indian lands as defined in the Indian Gaming Regulatory Act, along with the States, the District of Columbia, and the Territories. An account on Pueblo or Navajo Nation land is domestic.
Does Mexican beach property held in a fideicomiso have to be reported?
Rev. Rul. 2013-14 holds that a Mexican land trust whose bank trustee only holds and transfers legal title is not a trust under Treas. Reg. § 301.7701-4(a), which removes the foreign trust reporting question. The FBAR item is the peso account opened alongside it.
How does the Streamlined Domestic Offshore 5 percent penalty work?
The penalty equals 5 percent of the highest aggregate year-end value of the unreported foreign financial assets across the covered periods, three years of amended returns and six years of FBARs. The taxpayer must certify non-willful conduct: negligence, inadvertence, mistake, or good faith misunderstanding.
Do unreported foreign accounts change a New Mexico income tax return?
Only through the income, since New Mexico has no FBAR. NMSA 1978 § 7-2-2 computes base income from adjusted gross income under Internal Revenue Code § 62, so foreign interest on an amended federal return raises New Mexico income. NMSA 1978 § 7-1-13 requires a report within 180 days.
How North Star Law Firm Can Help
North Star Law Firm handles federal tax controversy for New Mexico clients, including delinquent FBAR filings, reasonable cause submissions, and streamlined packages. Phillip Zagotti, JD/CPA, practices before the IRS and the United States Tax Court and holds a Texas CPA license, which matters where rebuilding six years of account values decides the outcome. The firm’s tax defense practice covers penalty abatement and unfiled tax returns, and exit tax and expatriation planning uses the same records. Phillip Zagotti is not licensed by the State Bar of New Mexico; for New Mexico state law the firm works alongside New Mexico-licensed counsel.
The choice among the three paths narrows once the IRS makes contact. See also the firm’s notes on FBAR penalty relief changes in 2026 and the proposed redesign of the IRS Voluntary Disclosure Practice. To discuss a missed FBAR before October 15, 2026, contact North Star Law Firm.