Foreign Account Reporting: FBAR and FATCA Requirements

FBAR and FATCA are separate reporting regimes with different rules, account types, and thresholds. Failing to file either one carries independent penalties starting at $10,000, and many expats file one while missing the other.

These are two separate regimes with different rules. The FBAR (FinCEN Form 114) is filed with the Financial Crimes Enforcement Network, not the IRS, and is due April 15 with an automatic extension to October 15. It is required if the aggregate value of all your foreign financial accounts exceeded $10,000 at any point during the year. Form 8938 (FATCA) is filed with your tax return and has higher thresholds -- $200,000 on the last day of the year or $300,000 at any point for taxpayers living abroad (married filing jointly).

The account types covered differ. FBAR covers bank accounts, securities accounts, and other financial accounts. FATCA covers those plus foreign stock, foreign partnership interests, foreign mutual funds, and foreign-issued life insurance with cash value. Some assets require reporting on Form 8938 but not the FBAR, and vice versa.

Penalties are independent and can stack. A non-willful FBAR violation carries penalties up to $10,000 per account per year. FATCA penalties start at $10,000 per form with escalation to $50,000 for continued non-filing. These penalties apply regardless of whether you owe any additional tax on the income in those accounts.

The pitfall: Filing one form but not the other is a common error. A CPA determines which accounts trigger which form and ensures both filings are consistent and complete.