IRS Form 8938 PDF: Thresholds, Filing, and Penalties

IRS Form 8938, the Statement of Specified Foreign Financial Assets, is the disclosure U.S. taxpayers attach to their annual income tax return when their foreign financial assets cross dollar thresholds set by the Foreign Account Tax Compliance Act. You use it to list foreign accounts, foreign-issued securities, and interests in foreign entities, along with the maximum value each reached during the year. Missing the form triggers a $10,000 penalty at minimum and can keep your return open to audit indefinitely.

Who Has to File

Three things have to be true before Form 8938 applies to you. You have to be a “specified person,” which covers U.S. citizens, resident aliens, and nonresident aliens who elect to file jointly with a U.S. spouse. You have to hold an interest in specified foreign financial assets. And the total value of those assets has to exceed the threshold for your filing status and residency.¹

The form only comes into play for years in which you already have to file a federal income tax return. If your income is below the normal filing threshold, Form 8938 does not apply, no matter how large your foreign holdings are.

Reporting Thresholds

Whether you cross the threshold depends on your filing status, where your tax home is, and the maximum aggregate value your foreign assets reached at any point in the tax year. The year-end balance alone is not enough. If your holdings spiked mid-year and dropped back down by December 31, you still have to file.

Living in the United States

Single or married filing separately: $50,000 on the last day of the year, or $75,000 at any time during the year.
Married filing jointly: $100,000 on the last day of the year, or $150,000 at any time during the year.

Living Abroad

Higher thresholds apply if your tax home is in a foreign country and you meet one of two tests: bona fide residence in a foreign country for an uninterrupted period that includes a full tax year (U.S. citizens only), or physical presence in a foreign country for at least 330 full days during any 12 consecutive months ending in the tax year.²

Single or married filing separately: $200,000 at year end, or $300,000 at any time during the year.
Married filing jointly: $400,000 at year end, or $600,000 at any time during the year.

These are the FATCA reporting thresholds under IRC 6038D.³

What Counts as a Specified Foreign Financial Asset

The definition splits into two categories. The first is any financial account maintained by a foreign financial institution: foreign bank accounts, brokerage accounts, and custodial accounts held at institutions outside the United States.

The second is investment assets held outside of an account:

Stock or securities issued by a non-U.S. person.
Ownership interests in foreign corporations, partnerships, or trusts.
Any financial instrument or contract where the issuer or counterparty is not a U.S. person, including interests in foreign hedge funds and private equity funds.¹

What Stays Off the Form

Foreign real estate held directly in your own name is not a specified foreign financial asset. A vacation house in another country does not go on Form 8938 unless you hold it through a foreign entity. Accounts at a U.S. financial institution, at the foreign branch of a U.S. institution, or at the U.S. branch of a foreign institution are also excluded.

There is a duplicative reporting exception too. Assets you already report on Forms 3520, 5471, 8621, or 8865 do not have to be repeated in the detailed sections of Form 8938, but you still have to note on Form 8938 that you filed those other returns, and only if they were filed on time.⁴

How to Complete the Form

For each foreign financial account, you provide the name and address of the institution, the account number, and the maximum value the account reached during the year. For non-account assets like foreign stock or entity interests, you identify the issuer, describe the asset enough to identify it, and report its maximum value.⁵

Maximum value is generally fair market value. For financial accounts, periodic account statements are acceptable evidence of that value unless you have reason to know the statements do not reasonably reflect the peak. Multiple assets are reported separately, then summarized. When you and your spouse jointly own an asset and file a joint return, you report the full value once, not divided.

Converting Foreign Currency

Values in foreign currency have to be converted to U.S. dollars using the U.S. Treasury Bureau of the Fiscal Service exchange rate. If no Fiscal Service rate exists for the currency, you can use another publicly available rate but must disclose the source on the form.² This rule is stricter than the general currency conversion approach the IRS accepts for income items elsewhere on the return.

When and How to File

Form 8938 is attached to your income tax return, typically Form 1040, and is due on the same date as the return, including any extensions. E-filed returns transmit the form with everything else. Paper filers physically attach it.²

You file even if none of the foreign assets produced taxable income or affected your tax bill. The form is informational, and the obligation depends only on the value thresholds.⁶

Penalties for Not Filing

The consequences stack, and the total gets large quickly.

Base Penalty

Failing to file, or filing without the required information, brings a $10,000 penalty.⁵

Continuation Penalty

If the IRS sends a notice of failure and you still do not file within 90 days, another $10,000 accrues for each 30-day period (or fraction of one) that the failure continues, capped at $50,000. The maximum combined penalty for a single failure is $60,000.⁷

40 Percent Accuracy Penalty

If you underpay tax because of an undisclosed foreign financial asset, the usual 20 percent accuracy-related penalty doubles to 40 percent on the portion of the underpayment tied to that asset.⁸

Criminal Exposure

In serious cases, criminal penalties can apply. The IRS notes this in its FATCA guidance, though prosecution typically targets willful non-compliance rather than honest mistakes.⁹

The Statute of Limitations Stays Open

This is the quiet catch. The IRS normally has three years from the filing date to assess additional tax. When you fail to furnish information required under IRC 6038D, that clock does not start on items related to the failure. The assessment period stays open until three years after you finally provide the information, meaning the IRS could audit that portion of your return many years later.¹⁰

If the failure was due to reasonable cause and not willful neglect, the extended period only applies to the specific items related to the unreported assets, not the entire return. That helps, but the foreign income itself remains exposed.

If You Are Behind

Reasonable Cause

No penalty applies if you can show the failure was due to reasonable cause and not willful neglect. The IRS looks at all the facts and circumstances, and you have to make an affirmative showing of the specific reasons. One argument explicitly does not count: that a foreign country would penalize you for disclosing the information.⁷

Streamlined Filing Compliance Procedures

If you have missed Form 8938 or FBAR filings and the failure was not willful, the IRS’s streamlined filing compliance procedures let you catch up with reduced penalty exposure. You certify that the failure was from negligence, inadvertence, or a good-faith misunderstanding of the law. You cannot use the program if the IRS has already started a civil examination of any of your returns or if you are under criminal investigation.¹¹

Streamlined submissions are not automatically audited, but they can be selected through normal processes. The program does not produce a closing agreement, and you are expected to comply going forward.

Form 8938 Is Not the FBAR

These two forms cause more confusion than any other pair in foreign reporting, and many taxpayers need both. They are separate obligations.

Form 8938 goes to the IRS with your tax return under FATCA. The FBAR (FinCEN Form 114) is filed separately and electronically with the Financial Crimes Enforcement Network under the Bank Secrecy Act. The FBAR is due April 15 with an automatic extension to October 15 that requires no action.¹²

The FBAR only covers financial accounts and kicks in at a much lower threshold of $10,000 aggregate at any point in the calendar year. Form 8938 covers a wider range of assets, including non-account holdings like foreign stock and entity interests, but starts at $50,000. A foreign bank account worth $60,000 goes on both. A $60,000 interest in a foreign partnership held outside any account goes on Form 8938 but not the FBAR.¹³

Filing one does not satisfy the other. If your foreign accounts push you over both thresholds, both forms are required.

1
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
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Internal Revenue Service. Instructions for Form 8938
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Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers
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eCFR. 26 CFR 1.6038D-7 – Exceptions From the Reporting of Certain Assets
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Office of the Law Revision Counsel. 26 USC 6038D – Information With Respect to Foreign Financial Assets
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eCFR. 26 CFR 1.6038D-2 – Requirement to Report Specified Foreign Financial Assets
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eCFR. 26 CFR 1.6038D-8 – Penalties for Failure to Disclose
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Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
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Internal Revenue Service. FATCA Information for Individuals
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Office of the Law Revision Counsel. 26 USC 6501 – Limitations on Assessment and Collection
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Internal Revenue Service. Streamlined Filing Compliance Procedures
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Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
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FinCEN.gov. Report Foreign Bank and Financial Accounts