Michael Sardar, ”The FBAR and the Fifth Amendment” Journal of Taxation 111 (2009) 180-182.
The article argues that a substantial hazard of criminal charges exists if a person files a late FBAR. Therefore, on Fifth Amendment grounds, an argument can be made for not filing the FBAR at all. The first time filer says with the FBAR filing,
“I have a foreign bank account and have not reported it previously,” with the inevitable question arising whether the account existed in prior years.
Here is an important quote from the article (emphasis mine):
Today, a taxpayer fearing self-incrimination may be well advised not to file an FBAR. Filing the FBAR and then attempting after the fact to preclude its use in a criminal proceeding would prove unsuccessful, because the Supreme Court has indicated that, post-Marchetti, an individual must claim the Fifth Amendment privilege by refusing to make the requested disclosure, or else waive the privilege. Thus, although there is no clear precedent holding that the Fifth Amendment privilege would apply in the context of an FBAR filing today, a taxpayer should weigh the risks of filing, which would definitively waive the privilege, against the benefits of failing to file and the arguments that can be made that such failure would be justified under Marchetti, despite Sturman. In taking such a position caution is advised, however—a failed Fifth Amendment argument can lead to a taxpayer’s indictment for yet an additional criminal act.
Please note that I am not saying that late filers will be charged with a crime. There is however a danger. Since the act of filing of an FBAR is a tacit waiver of the Fifth Amendment right, it seems better, if one wants to make Fifth Amendment argument, to refrain from filing an FBAR in the first place.