International information reporting
FBAR (FinCEN Form 114)
The Report of Foreign Bank and Financial Accounts (FBAR) is required by the Bank Secrecy Act (31 U.S.C. 5314), not the Internal Revenue Code. A U.S. person (a citizen, a resident, or an entity, trust or estate formed under U.S. law) files one if they have a financial interest in or signature authority over foreign financial accounts whose aggregate value exceeds $10,000 at any time during the calendar year. The test adds the maximum value of each account.
Covered accounts. Any financial account located outside the United States: bank, securities and brokerage accounts, commodity futures or options accounts, insurance or annuity policies with a cash value, and mutual fund shares. An account at a foreign branch of a U.S. bank is foreign; one at a U.S. branch of a foreign bank is not. A safe deposit box, even at a foreign bank, generally isn’t a financial account; it is one only if the institution has access to the contents and can dispose of them on the holder’s instruction.
Filing. The FBAR is filed electronically with FinCEN through the BSA E-Filing System, not with the tax return. It is due April 15 of the following year, with an automatic extension to October 15 that needs no request.
Penalties. The IRS assesses FBAR penalties under Title 31, within 6 years of the violation.
- Non-willful: up to $10,000 per violation. In Bittner v. United States (2023), the Supreme Court held that this penalty accrues per report, not per account, so one deficient FBAR is one violation however many accounts it omits. Reasonable cause excuses it if the balance was properly reported.
- Willful: up to the greater of $100,000 or 50% of the account balance at the time of the violation, per account, and criminal penalties may apply.
- Both maximums are adjusted for inflation. For penalties assessed after January 17, 2025, they are $16,536 (non-willful) and $165,353 (willful).
Form 8938
Form 8938, Statement of Specified Foreign Financial Assets (IRC 6038D), is filed by a specified individual whose specified foreign financial assets exceed a threshold. Specified individuals are U.S. citizens, resident aliens, and certain nonresident aliens (those electing resident status to file jointly, and bona fide residents of American Samoa or Puerto Rico). The form is attached to the income tax return and due with it, including extensions. A taxpayer who isn’t required to file a return doesn’t file Form 8938.
Specified foreign financial assets are accounts at foreign financial institutions and, if held for investment outside an account, foreign stock and securities, and interests in foreign entities (including partnerships). So are foreign pension plans and known interests in foreign trusts or estates. Accounts maintained by a U.S. payer, directly held foreign real estate and currency, and foreign social security-type benefits are not.
A specified individual files if assets exceed either amount:
The following table lists the Form 8938 thresholds. Unmarried or married filing separately, living in the U.S.: more than $50,000 on the last day of the year or $75,000 at any time. Married filing jointly in the U.S.: $100,000 or $150,000. Unmarried or married filing separately abroad: $200,000 or $300,000. Married filing jointly abroad: $400,000 or $600,000.
| Taxpayer | Last day of year, more than | Any time, more than |
|---|---|---|
| Unmarried or MFS, in U.S. | $50,000 | $75,000 |
| MFJ, in U.S. | $100,000 | $150,000 |
| Unmarried or MFS, abroad | $200,000 | $300,000 |
| MFJ, abroad | $400,000 | $600,000 |
“Abroad” requires a foreign tax home and either a full tax year of bona fide foreign residence (citizens) or 330 full days abroad in a 12-month period ending in the tax year.
Penalties.
- $10,000 for not filing a complete and correct Form 8938 on time, plus $10,000 per 30 days the failure continues beyond 90 days after IRS notice, up to $50,000 more ($60,000 total).
- A 40% accuracy-related penalty (instead of 20%) on an underpayment from a transaction involving an undisclosed foreign financial asset.
- The assessment period stays open until 3 years after Form 8938 is filed. Omitting more than $5,000 of income from these assets extends the period to 6 years.
FBAR and Form 8938 compared
Filing one never satisfies the other.
The following table compares the FBAR and Form 8938: where each is filed, its due date, its threshold, and which holdings each covers.
| Item | FBAR | Form 8938 |
|---|---|---|
| Filed with | FinCEN, electronically | IRS, with the return |
| Due | April 15, automatic extension to October 15 | Return due date, with extensions |
| Threshold | Over $10,000 aggregate | Starts above $50,000 (see table) |
| Signature authority only | Reported | Not reported |
| Foreign stock held directly | Not reported | Reported |
| Foreign partnership interest | Not reported | Reported |
| Foreign branch of a U.S. bank | Reported | Not reported |
Other international information returns
Form 3520: foreign trusts and foreign gifts
- Reports transfers to, ownership of, and distributions from foreign trusts, plus gifts or bequests totaling more than $100,000 in the year from a nonresident alien or foreign estate, or more than $20,116 (2025) from foreign corporations or partnerships.
- Due April 15 (October 15 if the income tax return is extended) and mailed separately to the IRS.
- Penalties: unreported foreign gifts cost 5% of the gift per month, up to 25%, and the IRS may determine the gift’s tax consequences. Unreported trust transfers or distributions cost the greater of $10,000 or 35% of the amount.
Form 5471: foreign corporations
- Filed by U.S. officers, directors and shareholders of certain foreign corporations, such as a U.S. person who acquires a 10% stock interest or controls the corporation (more than 50% of vote or value).
Form 8865: foreign partnerships
- Filed by a U.S. person who controls a foreign partnership (more than 50%), owns 10% or more of one controlled by 10% U.S. owners, contributes property to one, or acquires or disposes of a 10% interest.
Forms 5471 and 8865 are attached to the income tax return and due with it, including extensions.
Penalties and the statute of limitations
- Failure to file Form 5471 or 8865: $10,000 per foreign corporation or partnership per year, plus $10,000 per 30 days beyond 90 days after IRS notice, up to $50,000 more. An unreported contribution to a foreign partnership instead costs 10% of the property’s value, capped at $100,000 unless intentional.
- Reduction of tax attributes: the same failure reduces the foreign taxes available for the foreign tax credit by 10%, plus 5% for each 3 months it continues beyond 90 days after notice.
- Substantially incomplete: a form missing required information counts as not filed until a complete and accurate one is received. On Form 5471, minor omissions are excused if the filer substantially complied.
- Statute of limitations: if information required on Form 5471, 8865, 8938 or the trust parts of Form 3520 isn’t furnished, the assessment period for the whole return stays open until 3 years after it is. With reasonable cause, only the related items stay open.
- Underreporting: the 40% accuracy-related penalty also covers understatements from assets that should have been reported on Form 5471, 8865 or the trust parts of Form 3520.
Example: FBAR versus Form 8938
Dana, a U.S. citizen, is single and lives in Ohio. In 2025 she has:
- A Canadian savings account: highest $12,000, year-end $9,000.
- A UK brokerage account: highest $30,000, year-end $28,000.
- German shares held directly, not in an account: highest $22,000, year-end $20,000.
- Signature authority only over her father’s Irish account: highest $60,000.
- A house in Portugal she owns directly.
FBAR: Her accounts total $12,000 + $30,000 + $60,000 = $102,000, over $10,000. She reports all three accounts. The shares and the house aren’t accounts.
Form 8938: Her assets are the two accounts she owns and the shares; the signature-only account and the house don’t count. At year-end they total $9,000 + $28,000 + $20,000 = $57,000, over the $50,000 threshold.
Had she been married filing jointly, with a spouse holding no foreign assets, even the sum of each asset’s highest value ($64,000) would fall below the $100,000 and $150,000 thresholds: no Form 8938, but still an FBAR.
Answer: Dana files an FBAR and attaches Form 8938 to her 2025 return.