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Form 8938 Vs FBAR
A US person may need to file Form 8938 (FATCA report) or a FinCEN Form 114 (FBAR report). But which form should you file? Getting it wrong could result in severe penalties. And while the two forms are similar, they do have some noteworthy differences. Here’s what you need to know about filing an FBAR or Form 8938.
Form 8938 | FinCEN Form 114 (FBAR) | |
| Who must file? | Specified individuals and specified domestic entities that have an interest in specified foreign financial assets and meet the reporting threshold Specified individuals include U.S citizens, resident aliens, and certain non-resident aliens | U.S. persons, which include U.S. citizens, resident aliens, trusts, estates, and domestic entities that have an interest in foreign financial accounts and meet the reporting threshold |
| Does the United States include U.S. territories? | No | Yes, resident aliens of U.S territories and U.S. territory entities are subject to FBAR reporting |
| What is reported? | Maximum value of specified foreign financial assets, which include financial accounts with foreign financial institutions and certain other foreign non-account investment assets | Maximum value of financial accounts maintained by a financial institution physically located in a foreign country |
| When due? | Form is attached to your annual return and due on the date of that return, including any applicable extensions | Received by April 15 (6-month automatic extension to Oct 15) |
| Where to file? | File with income tax return pursuant to instructions for filing the return. | File electronically through FinCENs BSA E-Filing System. The FBAR is not filed with a federal tax return. |
| Penalties | Up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a potential maximum penalty of $60,000; criminal penalties may also apply | Civil monetary penalties are adjusted annually for inflation. For civil penalty assessment prior to Aug 1, 2016, if non-willful, up to $10,000; if willful, up to the greater of $100,000 or 50 percent of account balances; criminal penalties may also apply |
| Types of foreign assets | Form 8938 | FinCEN Form 114 (FBAR) |
| Financial (deposit and custodial) accounts held at foreign financial institutions | Yes | Yes |
| Financial account held at a foreign branch of a U.S. financial institution | No | Yes |
| Foreign financial account for which you have signature authority | No, unless you otherwise have an interest in the account | Yes, subject to exceptions |
| Foreign stock or securities held in a financial account at a foreign financial institution | The account itself is subject to reporting, but the contents of the account do not have to be separately reported | The account itself is subject to reporting, but the contents of the account do not have to be separately reported |
| Foreign stock or securities NOT held in a financial account | Yes | No |
| Foreign partnership interests | Yes | No |
| Foreign hedge funds and foreign private equity funds | Yes | No |
| ‘Social Security’- type program benefits provided by a foreign government | No | No |
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