What happens if you don't declare foreign assets?

If you don’t declare foreign assets as a U.S. citizen or resident, the consequences can be serious. Here’s a clear breakdown:

Consequence	Details
Penalties & Fines	You can face civil penalties for failing to file forms like FBAR (FinCEN Form 114) or Form 8938 (FATCA). Fines can range from $10,000 for non-willful violations to up to 50% of the account value per year for willful violations.
Criminal Charges	In severe cases, intentional failure to report foreign assets can lead to criminal prosecution, with fines and prison up to 5 years.
Interest on Unpaid Taxes	If the foreign assets generate income and it wasn’t reported, you’ll owe taxes plus interest on the unpaid amount.
IRS Scrutiny	Non-reporting increases the chance of audits and further investigation into your finances.
Loss of Tax Benefits	Some deductions, credits, or treaty benefits may be disallowed if foreign income isn’t reported.

✅ Key takeaway: Even if you live abroad or the money is in a foreign account, U.S. law still requires reporting. Ignoring this can lead to huge fines and even criminal liability.

Conclusion:

As soon as you are a U.S. citizen (or green card holder), you are required to report and pay U.S. taxes on worldwide income, including income from foreign property—even if you live abroad. Ignoring this can lead to serious penalties, fines, or even criminal charges.

Even if the IRS doesn’t currently know about your foreign property or income, ignoring it is extremely risky.

Banks and foreign governments often report accounts automatically, and the IRS can audit you years later.

Penalties, interest, and fines can add up quickly—even up to 50% of the unreported account per year if it’s willful. Deliberately hiding income can also lead to criminal charges.

The safest approach is to report foreign income and pay any taxes owed to avoid major trouble down the line.