What Is a FATCA Declaration? Form 8938, FBAR, and Penalties

A FATCA declaration is how you disclose foreign financial assets to the U.S. government under the Foreign Account Tax Compliance Act. For most people it means one of two things: filing IRS Form 8938, Statement of Specified Foreign Financial Assets, with your annual tax return when your foreign holdings cross a dollar threshold,¹ or signing a self-certification form (a W-9 or W-8) that a foreign bank hands you to confirm whether you are a U.S. person.² The two are separate filings with separate rules, and some people have to do both.

Who Has to File Form 8938

Under 26 U.S.C. § 6038D, any individual holding an interest in specified foreign financial assets must attach Form 8938 to their federal income tax return if the total value of those assets exceeds the applicable threshold.³ The obligation reaches U.S. citizens, resident aliens, and certain domestic entities formed or used to hold foreign financial assets. Your threshold depends on filing status and where you live.

If you live in the United States:

Single or married filing separately: file if your foreign assets exceed $50,000 on the last day of the tax year or $75,000 at any point during the year.⁴
Married filing jointly: file if the couple’s combined foreign assets exceed $100,000 at year-end or $150,000 at any point during the year.⁵

If you qualify as living abroad (your tax home is in a foreign country and you meet either the bona fide residence test or the 330-day physical presence test under IRC § 911(d)(1)),⁶ the thresholds rise sharply:

Single or married filing separately: more than $200,000 at year-end or more than $300,000 at any point during the year.⁴
Married filing jointly: more than $400,000 at year-end or more than $600,000 at any point during the year.⁴

If you co-own a foreign asset with anyone other than your spouse, count the full value, not your share, in deciding whether you cross the threshold, and report the full maximum value on the form.⁷ Spouses filing jointly submit one Form 8938 covering both.

Certain domestic corporations, partnerships, and trusts formed or used to hold foreign financial assets can also owe a Form 8938 filing when their specified foreign financial assets exceed $50,000 at year-end or $75,000 at any point in the year.⁸

Which Assets Count

Not every asset you hold overseas triggers the filing. A “specified foreign financial asset” covers a defined list:⁹

Deposit, savings, or custodial accounts maintained at a foreign financial institution.
Stock or securities issued by a non-U.S. person, when held outside a financial account.
Ownership interests in foreign partnerships, corporations, or other entities, when held outside a financial account.
Financial instruments or contracts where the issuer or counterparty is a non-U.S. person, when held outside a financial account.

Assets held through a U.S.-based brokerage or bank generally do not go on Form 8938, even when the underlying investments are foreign, because the account itself is with a domestic institution.⁷

An interest in a foreign employer-sponsored pension or foreign deferred compensation plan is reportable. You report the plan itself in Part VI; you do not list each underlying investment. If you cannot determine the fair market value of your interest, use the value of any distributions you received during the year, and if there were none, report zero. Benefits from a foreign country’s social security system are not specified foreign financial assets and do not go on the form.⁷

What Information You Have to Provide

For each foreign financial account, you report the name and address of the institution, the account number, and the maximum value of the account during the tax year.³ Maximum value means the highest balance at any point during the year, not the year-end figure.

For foreign stocks or securities held outside an account, you report the issuer’s name and address and enough detail to identify the class or issue. For other foreign financial instruments or contracts, you provide identifying details plus the names and addresses of all issuers and counterparties. In every case, the maximum value during the year is required.³

Foreign institutions independently report U.S. account data to the IRS under FATCA’s intergovernmental agreements. Large gaps between your Form 8938 and what the IRS receives from those institutions can flag a return for review.

How and When to File

Form 8938 is not filed on its own. You attach it to your annual federal income tax return, usually Form 1040, and submit the package together.¹⁰ For the 2025 tax year the filing deadline is April 15, 2026. An extension for your income tax return automatically extends Form 8938 to the same date, typically October 15, 2026.⁷ Electronic filing systems integrate the form with the rest of the return.

The Self-Certification Your Foreign Bank Wants

Alongside the taxpayer filing, FATCA imposes obligations on foreign banks themselves. Institutions that refuse to identify and report U.S. account holders face a 30 percent withholding tax on certain U.S.-source payments,¹¹ so foreign banks routinely ask customers to complete a self-certification confirming their tax status.

If you are a U.S. person, the bank typically asks for Form W-9, which certifies your taxpayer identification number and includes a FATCA reporting section.² A foreign person holding an account at a U.S. institution completes one of the W-8 series (W-8BEN for individuals, W-8BEN-E for entities) to certify foreign status.¹²

Banks flag “U.S. indicia” that suggest a customer may owe U.S. tax: a U.S. birthplace, a U.S. mailing or residence address, a U.S. phone number, or standing instructions to transfer funds to a U.S. account. Any of these will prompt a request for documentation.² If a customer fails to provide a taxpayer identification number when required, applicable payments are withheld at 30 percent.

Most international banks accept these forms through a secure online portal; some still require paper originals. What you tell the bank should match what appears on your tax return, because the bank reports account data to the IRS independently, either directly or through its home country under an intergovernmental agreement.

Form 8938 and the FBAR Are Different Filings

Foreign account holders often confuse Form 8938 with the Report of Foreign Bank and Financial Accounts (FBAR), FinCEN Form 114. Both cover foreign accounts, but they are separate obligations, and if you cross both thresholds you file both.⁸

Threshold: FBAR kicks in when the combined value of your foreign financial accounts exceeds $10,000 at any point during the calendar year, far lower than the Form 8938 thresholds.⁸
Scope: FBAR covers foreign financial accounts only. Form 8938 also captures directly held foreign stocks, interests in foreign entities, and foreign financial instruments held outside an account.
Where it goes: FBAR is filed with FinCEN through the BSA E-Filing System and is not attached to your tax return. Form 8938 rides along with your federal income tax return.
Deadline: Both are due April 15. FBAR extends automatically to October 15 with no request needed. Form 8938 only extends if you extend your income tax return.

Filing one does not satisfy the other. The same account may appear on both forms in the same year.

Penalties and the Extended Audit Window

Missing a required Form 8938 carries a base penalty of $10,000 per tax year. If the IRS notifies you and you still do not comply within 90 days, an additional $10,000 accrues for each 30-day period (or fraction) the failure continues, capped at $50,000 in additional penalties per year.³ Total exposure for a single year of non-compliance can reach $60,000. An understatement of tax tied to an undisclosed foreign asset can also trigger an accuracy-related penalty of 40 percent of the underpayment, double the usual 20 percent rate, and willful failure can carry criminal exposure under separate provisions.

No penalty applies if you can show the failure was due to reasonable cause and not willful neglect. The statute states expressly that fear of a foreign country’s penalties for disclosure does not qualify as reasonable cause.³ The IRS looks at reasonable cause case by case, weighing the complexity of the obligation, the steps you took to understand it, and whether you acted with ordinary care.¹³

A missing Form 8938 also stretches the audit window. The IRS normally has three years to assess additional tax, but when information required under § 6038D is not filed, the assessment period does not start to close until three years after you actually provide the information. The return can effectively stay open indefinitely until the form is filed. A separate rule extends the three-year window to six years when you omit more than $5,000 of gross income tied to a reportable foreign asset; if the failure is due to reasonable cause, that longer window applies only to items connected to the unreported asset, not the whole return.¹⁴

If You Missed Past Filings

The IRS offers structured ways to catch up, each with its own eligibility rules.

Delinquent International Information Return Submission Procedures

If you are not under civil examination or criminal investigation and the IRS has not contacted you about the missing returns, you can file the late Form 8938 by attaching it to an amended return for the year in question, along with a reasonable cause statement.¹⁵ Penalties can still be assessed, but the IRS may waive them if it accepts your explanation. The amended return remains subject to audit.

Streamlined Foreign Offshore Procedures

Taxpayers living outside the United States whose failure to file was non-willful (resulting from negligence, inadvertence, mistake, or a good-faith misunderstanding) may qualify for the Streamlined Foreign Offshore Procedures. For U.S. citizens and green card holders, eligibility requires no U.S. abode and physical presence outside the United States for at least 330 full days in at least one of the three most recent tax years.¹⁶ For individuals who are neither citizens nor permanent residents, the requirement is failing the substantial presence test in at least one of those three years. Taxpayers who qualify generally come into compliance without paying failure-to-file penalties.

1
Internal Revenue Service. Summary of Key FATCA Provisions
2
Internal Revenue Service. Instructions for the Requester of Form W-9
3
Office of the Law Revision Counsel. 26 USC 6038D – Information With Respect to Foreign Financial Assets
4
eCFR. 26 CFR 1.6038D-2 – Requirement to Report Specified Foreign Financial Assets
5
Internal Revenue Service. href=”https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR31749dec6d4756f/section-1.6038D-2″ target=”_blank” rel=”noopener”>26 CFR 1.6038D-2 – Requirement to Report Specified Foreign Financial Assets
6
Office of the Law Revision Counsel. 26 U.S. Code 911 – Citizens or Residents of the United States Living Abroad
7
Internal Revenue Service. Instructions for Form 8938
8
Internal Revenue Service. Comparison of Form 8938 and FBAR Requirements
9
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
10
Internal Revenue Service. About Form 8938, Statement of Specified Foreign Financial Assets
11
Office of the Law Revision Counsel. 26 U.S. Code 1471 – Withholdable Payments to Foreign Financial Institutions
12
Internal Revenue Service. About Instructions for the Requester of Forms W-8 BEN, W-8 BEN-E, W-8 ECI, W-8 EXP, and W-8 IMY
13
Internal Revenue Service. Penalty Relief for Reasonable Cause
14
Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection
15
Internal Revenue Service. Delinquent International Information Return Submission Procedures
16
Internal Revenue Service. U.S. Taxpayers Residing Outside the United States