FBAR vs. Form 8938: What's the Difference?

If you are a U.S. person with foreign financial accounts or assets, you may be required to file two separate reports with two different government agencies: the FBAR (FinCEN Form 114) with the Financial Crimes Enforcement Network, and Form 8938 (Statement of Specified Foreign Financial Assets) with the IRS. Many taxpayers are surprised to learn these are entirely separate requirements — filing one does not satisfy the obligation to file the other.

Overview: Two Different Requirements

What Is the FBAR?

The FBAR — formally FinCEN Form 114 — is a report required under the Bank Secrecy Act. It is filed electronically with the Financial Crimes Enforcement Network (FinCEN) through the BSA E-Filing System. It is not filed with the IRS and is not attached to your tax return.

Who Must File the FBAR?

A U.S. person must file an FBAR if they had a financial interest in or signature authority over one or more foreign financial accounts and the aggregate value exceeded $10,000 at any point during the calendar year.

U.S. persons for FBAR purposes include U.S. citizens (including dual citizens), resident aliens, and domestic entities (corporations, partnerships, LLCs, trusts, estates).

The threshold is aggregate — three accounts at $4,000 each = $12,000 aggregate = FBAR required. It applies to the highest balance during the year, not year-end balance.

What Accounts Must Be Reported?

• Foreign bank accounts (checking, savings, time deposit)
• Foreign securities accounts
• Foreign mutual funds
• Foreign accounts at foreign branches of U.S. banks
• Foreign life insurance policies with a cash surrender value
• Foreign annuity contracts with a cash value

Signature authority: Even with no financial interest, you must report an account if you have signature authority over it.

FBAR Penalties

Non-willful violations: Up to $10,000 per violation per year. Willful violations: The greater of $100,000 or 50% of the account balance per year. Willful violations can also result in criminal prosecution.

What Is Form 8938?

Form 8938 is an IRS form enacted under FATCA in 2010. Unlike the FBAR, it is filed with your federal income tax return and administered by the IRS.

Who Must File Form 8938?

Specified individuals include U.S. citizens, resident aliens, and non-resident aliens who elect to be treated as U.S. residents. Specified domestic entities (added by regulations in 2016) include closely held domestic corporations, partnerships, and trusts formed to hold specified foreign financial assets.

What Are Specified Foreign Financial Assets?

Form 8938 covers a broader set of assets than the FBAR:

Financial accounts at foreign financial institutions: Foreign bank accounts, securities accounts, insurance and annuity contracts with cash value. Other foreign financial assets (not held in accounts):

• Stock or securities issued by a foreign person
• Any interest in a foreign entity (partnership, corporation, trust)
• Financial instruments or contracts with a foreign counterparty
• Foreign pension plans and deferred compensation plans

Key distinction: If you own stock in a foreign private company directly (not through a brokerage account), it must be reported on Form 8938 but would not be reported on the FBAR.

Form 8938 Filing Thresholds

U.S. residents:

• Single/MFS: $50,000 on the last day or $75,000 at any point
• MFJ: $100,000 on the last day or $150,000 at any point

Taxpayers living abroad:

• Single/MFS: $200,000 on the last day or $300,000 at any point
• MFJ: $400,000 on the last day or $600,000 at any point

Form 8938 Penalties

Failure to file: $10,000 per failure. Continuation penalty: $10,000 per 30-day period after IRS notice (up to $50,000 additional). Understatement of tax: 40% accuracy-related penalty on underpayments attributable to undisclosed foreign assets. Statute of limitations: Failure to file Form 8938 prevents the limitations period from running on the entire tax return under §6501(c)(8).

Key Differences

1. Scope of Reportable Assets

The FBAR covers foreign financial accounts only. Form 8938 covers specified foreign financial assets — a broader category including direct ownership of foreign stocks and interests in foreign entities not held through a financial account.

2. Filing Location

• FBAR: Filed with FinCEN — not the IRS, not attached to your tax return
• Form 8938: Filed with the IRS, attached to your federal income tax return

3. Thresholds

• FBAR: $10,000 aggregate at any point — a very low threshold
• Form 8938: $50,000–$400,000 depending on filing status and residency

4. Overlap

The same foreign bank account may need to appear on both forms. This is expected and required. Reporting on one does not satisfy the obligation for the other.

Streamlined Filing Compliance Procedures

For taxpayers who have failed to file FBARs or Form 8938 due to non-willful conduct, the IRS offers the Streamlined Filing Compliance Procedures:

• Streamlined Domestic Offshore Procedures: For U.S. residents — 5% miscellaneous offshore penalty on the highest aggregate balance
• Streamlined Foreign Offshore Procedures: For taxpayers residing outside the U.S. — no penalty if eligibility requirements are met

These procedures require filing amended returns for the past 3 years and FBARs for the past 6 years, along with a certification of non-willfulness.

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Not sure which international forms apply to you? TaxPalette's Foreign Reporting Scanner — free, no login required — identifies whether FBAR, Form 8938, Form 5471, Form 8621, Form 3520, and other international forms may apply to your situation.