By Harry Prabandham · Updated September 28, 2026
Tax Planning
FBAR and FATCA: Reporting Foreign Accounts and Assets
U.S. persons file an FBAR if foreign accounts top $10,000 combined at any time in the year; Form 8938 applies at higher thresholds.
FBAR and FATCA: Reporting Foreign Accounts and Assets
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What are the FBAR and Form 8938?
- The FBAR (FinCEN Form 114) reports foreign financial accounts to the Treasury's Financial Crimes Enforcement Network.
- Form 8938, created by FATCA, reports specified foreign financial assets to the IRS with the income tax return.
- Many people must file both, because the thresholds, covered assets, and agencies differ.
- Both are information reports; filing does not by itself create tax, but penalties for missing them can be large.
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Full Guide
What are the FBAR and Form 8938?
- The FBAR (FinCEN Form 114) reports foreign financial accounts to the Treasury's Financial Crimes Enforcement Network.
- Form 8938, created by FATCA, reports specified foreign financial assets to the IRS with the income tax return.
- Many people must file both, because the thresholds, covered assets, and agencies differ.
- Both are information reports; filing does not by itself create tax, but penalties for missing them can be large.
Who must file an FBAR?
- U.S. persons, including citizens, residents, and U.S. entities, file when the combined maximum value of foreign accounts exceeds $10,000 at any time during the year.
- Covered accounts include bank, brokerage, mutual fund, and certain foreign pension or insurance accounts with cash value.
- Signature authority over an account you do not own, such as an employer's or a parent's, can also require filing.
- The FBAR is due April 15 with an automatic extension to October 15; no request is needed.
Who must file Form 8938?
- Taxpayers living in the U.S. file if specified foreign assets exceed $50,000 at year-end or $75,000 at any time, single; the joint thresholds are $100,000 and $150,000.
- Taxpayers living abroad file above $200,000 at year-end or $300,000 at any time, single, and $400,000 or $600,000 joint.
- Form 8938 covers directly held foreign stock and partnership interests, which the FBAR does not.
- Accounts at foreign branches of U.S. financial institutions are reportable on the FBAR but not on Form 8938.
What are the penalties for not filing?
- The statutory non-willful FBAR penalty is up to $10,000, adjusted annually for inflation.
- In Bittner v. United States (2023), the Supreme Court held that the non-willful penalty applies per report, not per account.
- Willful FBAR violations can bring penalties up to the greater of an inflation-adjusted $100,000 or 50% of the account balance, plus possible criminal charges.
- Form 8938 penalties start at $10,000, with up to $50,000 more for continued failure after IRS notice.
How can late filers catch up?
- The IRS streamlined procedures are for taxpayers whose failures were non-willful, meaning negligence or mistake.
- Domestic filers submit three years of amended returns and six years of FBARs and pay a 5% penalty on the highest aggregate foreign asset balance.
- Taxpayers who meet the non-residency requirement use the streamlined foreign procedures, which carry no miscellaneous offshore penalty.
- Taxpayers with no unreported income may qualify for the delinquent FBAR submission procedures instead.
How do foreign accounts affect investment decisions?
- Foreign mutual funds and ETFs are usually PFICs, which carry separate reporting on Form 8621 and unfavorable default tax treatment.
- Foreign pensions may not be tax-deferred for U.S. purposes unless a treaty provides otherwise.
- Consolidating accounts can reduce reporting burden, though closing foreign accounts has its own costs and practical limits.
- Report values in U.S. dollars using the Treasury year-end exchange rate for the FBAR.
Key takeaways
- The FBAR is triggered at $10,000 combined; Form 8938 at higher thresholds that depend on residence and filing status.
- Non-willful FBAR penalties apply per report after the Supreme Court's 2023 Bittner decision.
- Streamlined procedures offer a path for non-willful late filers.
- Confirm filing obligations with a CPA or attorney experienced in international reporting.
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