FBAR & FATCA Filing Guide

Overview

U.S. citizens, resident aliens, and certain other persons who hold financial accounts outside the United States may be required to file one or both of two separate foreign account reports: the FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114) and FATCA (Form 8938, filed with your federal tax return).

These are two distinct filing requirements administered by two different agencies (FinCEN for FBAR, IRS for FATCA), and filing one does not satisfy the other. Non-compliance can result in severe civil and criminal penalties.

What Is FBAR?

The Foreign Bank Account Report (FBAR) is filed with FinCEN (Financial Crimes Enforcement Network), a bureau of the U.S. Department of the Treasury. It is not a tax return — it is a financial disclosure report. The governing law is the Bank Secrecy Act (BSA), 31 U.S.C. § 5314.

Key details about FBAR:

• Filed electronically through the BSA E-Filing System (not with the IRS)
• Covers accounts over which you have signature authority, even if not the account owner
• Applies to bank accounts, investment accounts, and certain insurance products
• Foreign account means any account maintained at a foreign financial institution
• Separate from your income tax return — filed with FinCEN, not attached to Form 1040

What Is FATCA?

The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010. Form 8938 (Statement of Specified Foreign Financial Assets) is the taxpayer disclosure requirement under FATCA, filed as part of your federal income tax return.

FATCA covers a broader range of assets than FBAR — including foreign stocks, partnerships, trusts, and retirement accounts — not just financial accounts at foreign institutions.

FBAR vs. FATCA — Key Differences

Who Must File

Both FBAR and FATCA apply to U.S. persons, which includes:

• U.S. citizens (regardless of where they live)
• U.S. resident aliens (including green card holders)
• Individuals who meet the Substantial Presence Test
• Domestic entities such as U.S. corporations, partnerships, LLCs, and trusts

Nonresident aliens are generally not subject to FBAR or FATCA, but income from foreign accounts may still be subject to U.S. taxation under FDAP or ECI rules.

Deadlines & Extensions

FBAR: The filing deadline is April 15. If you miss it, FinCEN automatically grants an extension to October 15 — no separate extension request is required. This extension is automatic.

Form 8938 (FATCA): Filed with your income tax return. If you file an extension for your Form 1040 (to October 15), the Form 8938 due date automatically extends as well.

Penalties for Non-Compliance

FBAR penalties are among the most severe in U.S. tax law:

Form 8938 penalties: $10,000 failure-to-file penalty, increasing by $10,000 for each 30-day period after IRS notification (up to $50,000 maximum). An additional 40% penalty applies to any underpayment of tax attributable to undisclosed foreign assets.

If you have unreported foreign accounts, seek professional guidance before the IRS contacts you. Voluntary disclosure is almost always better than enforcement action.

How to File

FBAR (FinCEN Form 114):

1. Gather account statements showing maximum balances during the year
2. Convert all foreign currency amounts to USD using the Treasury's year-end exchange rate
3. File electronically via the BSA E-Filing System at bsaefiling.fincen.treas.gov
4. No paper alternative is accepted — FBAR must be filed electronically

Form 8938 (FATCA):

1. Complete Form 8938 and attach it to your Form 1040
2. Report the maximum value of each specified foreign financial asset during the year
3. Identify account numbers, foreign institution names, and addresses
4. File with your regular income tax return or extension

Frequently Asked Questions