Before you read further — which describes you?
Quick Answer
Form 8938 FATCA reporting involves four key determinations: (1) who files — specified individuals and domestic entities with specified foreign financial assets; (2) thresholds — starting at $50K single / $100K MFJ end-of-year for U.S. residents, with higher thresholds abroad; (3) what counts — specified foreign financial assets broader than FBAR; and (4) penalties — $10K base, up to $50K continuation, plus 40% accuracy-related on related tax underpayment. The short version is that Form 8938 overlaps FBAR but covers more asset types and has higher thresholds. In our experience, most taxpayers who need to file 8938 also need to file FBAR.1
Form 8938 question? A 15-minute consultation is free.
Four Form 8938 FATCA determinations.
The Four Form 8938 Determinations
| Determination | Application2 |
|---|---|
| Who Files | Specified individuals / domestic entities |
| Thresholds | $50K / $100K (U.S.) — higher abroad |
| What Reported | Specified foreign financial assets |
| Penalty | $10K base + continuation + accuracy |
1. Who Must File
Specified individuals and domestic entities with specified foreign financial assets.
If this is you: U.S. citizen, resident, or specified domestic entity. Specified foreign financial assets above thresholds. Form 8938 attached to 1040. Separate from FBAR.
Who-Files Strategy
- Determine specified person status.
- Identify specified foreign financial assets.
- Measure values end-of-year and during year.
- Apply appropriate threshold.
- File 8938 if threshold met.
2. Filing Thresholds
$50K/$100K end-of-year U.S.; higher thresholds abroad.
If this is you: U.S. resident single: >$50K end-of-year or >$75K any time. U.S. resident MFJ: >$100K EOY or >$150K any time. Thresholds significantly higher if living abroad.
3. What Must Be Reported
Specified foreign financial assets — broader than FBAR.
If this is you: Foreign bank accounts, securities, foreign stocks held outside account, foreign partnership / corporation interests, foreign trust / estate interests, foreign-issued life insurance with cash value, foreign hedge funds and PFICs.
4. Penalty Structure
$10K base, up to $50K continuation, 40% accuracy-related.
If this is you: Missed 8938. $10K initial penalty. Additional $10K per 30 days after IRS notice (max $50K). 40% accuracy-related on related underpayment. Reasonable cause defense available.
Form 8938 question? Book consultation.
Form 8938 Document Lookup
| Authority / Form | Purpose |
|---|---|
| Form 8938 | FATCA specified foreign assets |
| FinCEN 114 | FBAR (separate regime) |
| IRC §6038D | 8938 authority |
| Treas. Reg. §1.6038D-1 to -8 | 8938 regulations |
| IRC §6662(j) | 40% accuracy penalty |
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Form 8938 Statute
- 6-year income tax statute for foreign omissions >$5K.
- Statute doesn’t start for unfiled 8938.
- Can retroactively expose earlier years.
Form 8938 Patterns
| Situation | Outcome |
|---|---|
| Timely 8938 | No penalty |
| Missed 8938 with income | $10K + 40% accuracy |
| Missed 8938 no income | $10K + reasonable cause |
| FATCA match | IRS automated flag |
Form 8938 Escalation
FATCA Match
Foreign institution FATCA report crosschecked.
Examination
Underlying income + reporting compliance.
Penalty
$10K + continuation + accuracy.
First 48 Hours
- Identify specified foreign financial assets.
- Measure year-end and high-water values.
- Apply appropriate threshold.
- Evaluate prior-year gaps.
- Engage counsel.
The ROI Question
$10K per year plus 40% accuracy penalty stacks quickly. Professional help essential for multi-year, multi-asset situations.
When to Engage
- Foreign financial assets.
- Missed 8938.
- FATCA-related IRS inquiry.
- Complex asset mix.
Frequently Asked Questions
What is Form 8938?
FATCA Statement of Specified Foreign Financial Assets. Attached to Form 1040. Separate from FBAR. Broader asset coverage than FBAR; higher thresholds.
What are 8938 thresholds?
U.S. resident single: >$50K EOY or >$75K any time. MFJ: >$100K EOY or >$150K any time. U.S. citizen abroad: $200K EOY / $300K any time single; $400K / $600K MFJ.
How does 8938 differ from FBAR?
Different statutes (Title 26 vs. Title 31). 8938 attached to 1040; FBAR separate FinCEN filing. Thresholds higher for 8938. Both often required; not duplicative.
What counts as specified asset?
Foreign financial accounts, foreign stocks / securities not in accounts, foreign partnerships / corps, foreign trusts, foreign life insurance with cash value. Broader than FBAR.
Do foreign pensions count?
Some yes. Qualified plans treated similarly to U.S. retirement may be excluded. Non-qualified foreign pensions typically reportable. Facts-specific.
Does directly-held real estate count?
No. Direct foreign real estate not specified foreign financial asset. Through foreign entity (partnership, corporation, trust) interest is reportable.
What are 8938 penalties?
$10K base. Additional $10K per 30 days after IRS notice (max $50K). 40% accuracy-related on underpayment related to undisclosed assets. Reasonable cause defense.
What is reasonable cause for 8938?
Good faith + reasonable reliance on facts or professional. Document reliance. Foreign-domiciled taxpayer unaware of U.S. reporting common reasonable cause.
Does crypto count on 8938?
IRS position: yes when in foreign financial account. Self-hosted less clear. Instructions developing. Conservative: include.
Are joint accounts included?
Yes. Each filer reports value. For MFJ joint returns, single 8938 covers both. For separate filers, each files.
Does FATCA affect foreign banks?
Yes. Foreign financial institutions report U.S. persons’ accounts to IRS (or their governments via IGA). IRS matches to 8938. Mismatches trigger audit.
What’s the streamlined 8938 path?
Streamlined procedures cover 8938 delinquency. Non-willful delinquent filers. Amendment of prior returns. Penalty structure mirrors FBAR streamlined.
Do entities file 8938?
Yes. Specified domestic entities file. Generally closely-held entities with foreign investments. Testing per regulations.
If you have read this far, you have a notice and you are trying to understand it before doing anything that makes it worse. That instinct is correct.
The next right move is a 15-minute call. We will identify the audit type, confirm your deadline, and tell you honestly whether you need representation. There is no cost and no obligation.
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Next Steps
Form 8938 question? 15-min consultation free.