If you are a U.S. person with money in a foreign bank, brokerage, or mutual fund account, offshore accounts trigger FBAR and FATCA reporting once your balances cross specific dollar thresholds. The FBAR is required when your foreign accounts collectively exceed $10,000 at any point in the calendar year. Form 8938, the FATCA disclosure, kicks in at higher figures that depend on your filing status and whether you live in the United States or abroad. Both filings are separate from your income tax return, and missing either one carries civil penalties that can start at $10,000 per report and climb well past the balance in the account.
What Triggers an FBAR
You must file an FBAR (FinCEN Form 114) if the combined value of all your foreign financial accounts exceeds $10,000 at any point during the calendar year.1eCFR. 31 CFR 1010.306 – Filing of Reports The obligation applies to every U.S. person with a financial interest in or signature authority over a foreign account, and it covers bank accounts, brokerage accounts, and mutual funds held at foreign institutions.2eCFR. 31 CFR 1010.350 – Reports of Foreign Financial Accounts
The $10,000 figure is an aggregate, not a per-account, threshold. Three foreign accounts holding $4,000 each add up to $12,000, and that combined figure triggers the filing even though no single account is over the line. Filing is electronic, through FinCEN’s BSA E-Filing system, and the FBAR is not attached to your tax return.
Two details trip people up. First, joint accounts. Each person with a financial interest reports the full value on their own FBAR, but spouses who hold accounts jointly can file a single combined FBAR by completing FinCEN Form 114a, which authorizes one spouse to file electronically for both. Form 114a stays in your records rather than being submitted to FinCEN.3Financial Crimes Enforcement Network. Reporting Jointly Held Accounts Second, currency conversion. Convert foreign balances to U.S. dollars using the Treasury Department’s official reporting rates of exchange for the last day of the calendar year.4U.S. Treasury Fiscal Data. Treasury Reporting Rates of Exchange A different rate or date can push you either side of the threshold and produce the wrong answer.
When Form 8938 Also Applies
The Foreign Account Tax Compliance Act added a second layer. Form 8938 is filed with your annual income tax return and covers a broader set of foreign financial assets than the FBAR.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets Thresholds depend on your filing status and residence:
- Single filers in the U.S.: foreign assets over $50,000 on the last day of the year or $75,000 at any time during the year.6Office of the Law Revision Counsel. 26 U.S.C. 6038D – Information With Respect to Foreign Financial Assets
- Married couples filing jointly in the U.S.: over $100,000 on the last day or $150,000 at any time.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
- Single filers living abroad: over $200,000 on the last day or $300,000 at any time.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
- Married couples filing jointly and living abroad: over $400,000 on the last day or $600,000 at any time.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
If you don’t otherwise need to file an income tax return for the year, Form 8938 isn’t required even if your foreign assets exceed the threshold.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
FATCA also runs in the other direction: foreign financial institutions report information about U.S. account holders directly to the IRS.7Internal Revenue Service. Summary of FATCA Reporting for U.S. Taxpayers The agency often already has data on the account before you file, so leaving disclosures off has become a much weaker strategy than it used to be.
Deadlines for Both Filings
The FBAR is due April 15 of the year following the calendar year being reported. Miss that date and FinCEN grants an automatic extension to October 15 without any request.8FinCEN.gov. Due Date for FBARs
Form 8938 tracks your income tax return, so the deadline is April 15 for most filers and shifts automatically with any tax return extension you request.5Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets The two filings go to two different agencies. Extending your tax return extends 8938; the FBAR gets its own automatic October 15 extension regardless.
Other Foreign Interest Forms You May Owe
The FBAR and Form 8938 don’t cover every foreign asset situation. Depending on what you hold, other IRS forms may apply.
If you own 10 percent or more of a foreign corporation’s stock by vote or value, you generally must file Form 5471. The filing categories are complex and also reach U.S. persons who serve as officers or directors of certain foreign corporations, or who control more than 50 percent of a foreign corporation’s stock.9Internal Revenue Service. Instructions for Form 5471
Foreign trusts trigger Form 3520. You must file if you transfer money or property to a foreign trust, receive a distribution from one, or are treated as the owner of any part of a foreign trust. The same form applies if you receive gifts or bequests totaling more than $100,000 from a nonresident alien or a foreign estate during the tax year.10Internal Revenue Service. Instructions for Form 3520
Reporting an asset on one of these other forms can excuse you from listing it separately on Form 8938, but you still need to note on 8938 that you filed the other form.11eCFR. 26 CFR 1.6038D-7 – Exceptions From the Reporting of Certain Assets Under Section 6038D
Penalties for Missing These Filings
The civil penalty for a non-willful FBAR violation is up to $10,000 per report, adjusted annually for inflation.12Office of the Law Revision Counsel. 31 U.S.C. 5321 – Civil Penalties The Supreme Court held in 2023 that the penalty runs per report, not per account, so someone who missed one year’s FBAR listing five accounts faces one penalty rather than five.13Justia Law. Bittner v. United States No penalty applies if the violation was due to reasonable cause and you properly reported and paid tax on the income from the account.
Willful violations are much worse. The penalty becomes the greater of $100,000 or 50 percent of the account balance at the time of the violation, and the IRS can assess it for each year of non-compliance.12Office of the Law Revision Counsel. 31 U.S.C. 5321 – Civil Penalties A willfully hidden $200,000 account across six years can produce aggregate penalties above $600,000. Criminal prosecution for willful violations can reach fines of $250,000 and five years in prison, or $500,000 and ten years if the violation is part of a broader pattern of illegal activity.14Office of the Law Revision Counsel. 31 U.S. Code 5322 – Criminal Penalties
Failing to file Form 8938 carries a $10,000 penalty, with another $10,000 for each 30-day period the failure continues after the IRS sends a notice, up to a $50,000 maximum.6Office of the Law Revision Counsel. 26 U.S.C. 6038D – Information With Respect to Foreign Financial Assets
Separate from all of this, the underlying income is still taxable. Interest, dividends, and capital gains earned in foreign accounts are subject to regular federal income tax because the United States taxes citizens and residents on worldwide income. Failing to report that income is its own violation on top of any FBAR or FATCA penalty.
Fixing Past Non-Compliance
If you missed prior filings, the IRS offers ways to come into compliance before the agency contacts you. The right path depends on whether you owe back taxes and whether your failure was intentional.
Delinquent FBAR Submission Procedures
If you failed to file FBARs but properly reported and paid tax on all income from the foreign accounts, and you’re not already under IRS examination or criminal investigation, you can submit the late FBARs through FinCEN’s electronic system. The IRS will not impose penalties under those circumstances.15Internal Revenue Service. Delinquent FBAR Submission Procedures This is the simplest route, but only when there’s no unpaid tax.
Streamlined Filing Compliance Procedures
If you do owe back taxes on unreported foreign income and your failure was non-willful (negligence, a mistake, or a good-faith misunderstanding of the law), the Streamlined Filing Compliance Procedures let you file amended returns and late information returns with reduced penalties.16Internal Revenue Service. Streamlined Filing Compliance Procedures You are ineligible if the IRS has already opened a civil examination of your returns or if you are under criminal investigation, and you must have a valid Taxpayer Identification Number.
Both programs work on a first-mover premise: the IRS generally prefers voluntary compliance to prosecution, but once the agency contacts you, leverage shifts and negotiating penalties gets much harder.
Records to Keep
Federal regulations require you to keep records of your foreign financial accounts for five years from the FBAR’s due date.17eCFR. 31 CFR 1010.430 – Nature of Records and Retention Period Records should include account statements, the name and address of the foreign bank, the account type, and the maximum value during the year. The IRS can look back six years for substantial understatements, so holding records past the five-year minimum is sensible if your situation is complicated.