A $10,000 penalty may be imposed for failure to file Form 8854 when required. IRS is sending notices to expatriates who have not complied with the Form 8854 requirements, including the imposition of the $10,000 penalty where appropriate.
A failure-to-file penalty is 5% of the unpaid tax obligation for each month your return is late. This penalty can't exceed 25% of your total unpaid taxes, and will max out after five months.