FBAR, Form 5472 and the foreign-account rules business owners can't ignore
These are not alternatives. Many US business owners with operations or accounts abroad owe all three, and filing one correctly does nothing to satisfy the others. The penalties run in parallel, which is why they compound so fast.
The short version
If you own or operate a US business and can direct any account held outside the United States, the FBAR very likely applies to you, including accounts whose money is not yours. Personal and business balances count toward one combined $10,000 threshold. If a foreign person owns part of your US LLC, Form 5472 is probably due as well, and its penalty starts at $25,000 a year whether or not the business traded.
How the three obligations differ
FBAR (FinCEN Form 114)
Foreign accounts total more than $10,000 at any point in the year
Filed with FinCEN through the BSA E-Filing System, separately from your tax return. It reports accounts, and signature authority counts even when the money is not yours.
Penalty: Non-willful up to $16,536 per year. Willful the greater of $165,353 or 50% of the balance.
Form 8938 (FATCA)
Higher thresholds that vary with filing status and residency
Filed with your tax return. It reports foreign financial assets, a broader category than accounts, so it can pick up holdings the FBAR does not.
Penalty: Starts at $10,000, with more for continued failure after notice.
Form 5472
A US corporation with 25% foreign ownership, or a foreign-owned single-member US LLC
Reports transactions between the business and its related foreign parties, not balances. A dormant foreign-owned LLC commonly still has to file.
Penalty: Starts at $25,000 per form, per year, regardless of activity or profitability.
Signature authority is the trigger most owners miss
You have signature authority when you can control what happens to the money in an account, whether by signature, online access, or instruction to the bank. Ownership is irrelevant. A director on a family company's mandate abroad has it. So does a founder who can approve payroll for an overseas subsidiary, or a partner named on a firm account they have never personally used. In each case the account is reportable, and reporting it creates no tax consequence. Only missing it is expensive.
Catching up, and staying caught up
Where the failures were non-willful, the Streamlined Filing Compliance Procedures and the Delinquent FBAR Submission Procedures both address late filings, and reasonable-cause relief may be available for information returns such as Form 5472. Acting before the IRS makes contact materially improves the outcome. Afterwards, the reason most businesses fall behind again is that compliance is treated as an annual event rather than a continuous record, which is exactly what bookkeeping and filing under one roof prevents.
General information, not tax or legal advice, and no client relationship is created. Reporting obligations depend on entity structure and individual facts. Penalty amounts are inflation-adjusted annually, so confirm current figures before relying on them.