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Form 8938FormFinCEN Form 114
Statement of Specified Foreign Financial AssetsDescriptionReport of Foreign Bank and Financial Accounts (FBAR)
Internal Revenue Service (IRS)Filed withFinancial Crimes Enforcement Network (FinCEN)
Form 8938, Statement of Specified Foreign Financial AssetsForm Full NameFinCEN Form 114 Report of Foreign Bank and Financial Accounts (FBAR)
✅ 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

⚠️Specified domestic entities include certain domestic corporations, partnerships, and trusts		Who must file?✅ 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
NoDoes the United States include U.S. territories?Yes, resident aliens of U.S territories and U.S. territory entities are subject to FBAR reporting
Specified individuals:
Living in the US:
✅ Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.

✅ Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

Living outside the US:
✅ Unmarried individual (or married filing separately): Total value of assets was more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.

✅ Married individual filing jointly: Total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.

Specified domestic entities:
Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the tax year.		Reporting threshold
(total value of assets)		✅ Aggregate value of financial accounts exceeds $10,000 at any time during the calendar year.

✅ This is a cumulative balance, meaning if you have 2 accounts with a combined account balance greater than $10,000 at any one time, both accounts would have to be reported.
✅ If any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the account or asset are or would be required to be reported, included, or otherwise reflected on your income tax returnWhen do you have an interest in an account or asset?✅ Financial interest:
You are the owner of record or holder of legal title; the owner of record or holder of legal title is your agent or representative; you have a sufficient interest in the entity that is the owner of record or holder of legal title.

✅ Signature authority:
you have authority to control the disposition of the assets in the account by direct communication with the financial institution maintaining the account.
✅ Maximum value of specified foreign financial assets, which include financial accounts with foreign financial institutions and certain other foreign non-account investment assetsWhat is reported?✅ Maximum value of financial accounts maintained by a financial institution physically located in a foreign country
✅ Fair market value in U.S. dollars in accord with the Form 8938 instructions for each account and asset reported

✅ Convert to U.S. dollars using the end of the taxable year exchange rate and report in U.S. dollars.		How are maximum account or asset values determined and reported?✅ Use periodic account statements to determine the maximum value in the currency of the account.

✅ Convert to U.S. dollars using the end of the calendar year exchange rate and report in U.S. dollars.
✅ Form is attached to your annual return and due on the date of that return, including any applicable extensionsWhen due?✅ Received by April 15 (6-month automatic extension to Oct 15)
✅ File with income tax return pursuant to instructions for filing the return.Where to file?✅ File electronically through FinCENs BSA E-Filing System.
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 $50,000; criminal penalties may also apply
Details below		PenaltiesCivil 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.
Details below

Those who must file an FBAR and fail to timely file a complete and correct FBAR may be subject to civil monetary penalties, criminal penalties, or both. When a U.S. person learns they should have filed an FBAR for an earlier year, they should electronically file the late FBAR using the BSA E-Filing System. They can enter the calendar year reported, including past years, on the online FinCEN Form 114. They “explain a late filing” or select “Other” to enter up to 750-characters within a text box to explain the late filing or indicate whether the filing is made in conjunction with an IRS compliance option. If they properly report the foreign financial account on a late-filed FBAR, and the IRS determines the FBAR violation was due to reasonable cause, no penalty will be imposed. For other guidance on circumstances, such as natural disasters, that may prevent timely FBAR filing, see FinCEN guidance, FIN-2013-G002 (June 24, 2013).

Civil monetary FBAR penalties have varying upper limits, but no minimum. These upper limits must be adjusted annually for inflation (Federal Civil Penalties Inflation Adjustment Act of 1990, as further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015). Beginning with penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015, Title 31 of the Code of Federal Regulations (CFR) section 1010.821, Penalty Adjustment Table, provides the adjusted maximum penalty amounts.

The inflation-adjusted civil and criminal penalties that may be asserted for not complying with the FBAR reporting and record-keeping requirements are summarized below.

⚠️ Non-Willful Violation

✅ Civil Penalty Authority: 31 USC 5321(a)(5)(B)
✅ Civil Penalty Amount: Up to the amount in 31 CFR 1010.821
✅ Criminal Penalties: N/A
✅ Comments: Applies to all U.S. persons.

⚠️ Willful Violation

✅ Civil Penalty Authority: 31 USC 5321(a)(5)(C)
✅ Civil Penalty Amount: Up to the greater of:
☑️ the amount in 31 CFR 1010.821, or
☑️ 50% of the amount in the account at the time of the violation.

⚠️ Criminal Penalties:

✅ Knowingly and Willfully Filing False FBAR: Up to $10,000 or 5 years or both. 18 USC 1001; 31 CFR 1010.840(d)
✅  Failure to File FBAR or Retain Required Records: Up to $250,000 or 5 years or both. 31 USC 5322(a); 31 CFR 1010.840(b).
☑️If violating certain other laws too, this penalty increases to up to $500,000 or 10 years or both. 31 USC 5322(b); 31 CFR 1010.840(c)
✅ Comments: Applies to all U.S. persons.

It’s possible to assert civil penalties for FBAR violations in amounts that exceed the balance in the foreign financial account. 

⚠️ Civil and criminal penalties may be imposed together. 31 USC Section 5321(d).

ℹ️ Note regarding civil penalty assessment before August 1, 2016:

For violations occurring on or before November 2, 2015, the IRS may assess a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the penalty.

⚠️ Negligent Violation
Civil Penalty Authority: 31 USC 5321(a)(6)(A)
Civil Penalty Amount: Up to the amount in 31 CFR 1010.821
Criminal Penalties: N/A
Comments: Doesn’t apply to individuals.

⚠️ Pattern of Negligent Activity
Civil Penalty Authority: 31 USC 5321(a)(6)(B)
Civil Penalty Amount: Up to the amount in 31 CFR 1010.821
Criminal Penalties: N/A
Comments: Doesn’t apply to individuals. Applies in addition to 31 USC 5321(a)(6)(A) penalty.

Source: Publication 5569, Report of Foreign Bank & Financial Accounts (FBAR) Reference Guide..

You may be subject to penalties if you fail to timely file a correct Form 8938 or if you have an understatement of tax relating to an undisclosed specified foreign financial asset.

Failure-To-File Penalty

If you are required to file Form 8938 but do not file a complete and correct Form 8938 by the due date (including extensions), you may be subject to a penalty of $10,000.

Continuing Failure To File

If you do not file a correct and complete Form 8938 within 90 days after the IRS mails you a notice of the failure to file, you may be subject to an additional penalty of $10,000 for each 30-day period (or part of a period) during which you continue to fail to file Form 8938 after the 90-day period has expired. The maximum additional penalty for a continuing failure to file Form 8938 is $50,000.

Married Taxpayers Filing a Joint Income Tax Return

If you are married and you and your spouse file a joint income tax return, the failure-to-file penalties apply as if you and your spouse were a single person. Your and your spouse’s liability for all penalties is joint and several.

Presumption of Maximum Value

If the IRS determines that you have an interest in one or more specified foreign financial assets and asks you for information about the value of any asset, but you do not provide enough information for the IRS to determine the value of the asset, you are presumed to own specified foreign financial assets with a value of more than the reporting threshold that applies to you. In such case, you are subject to the failure-to-file penalties if you do not file Form 8938.

Reasonable Cause Exception

No penalty will be imposed if you fail to file Form 8938 or to disclose one or more specified foreign financial assets on Form 8938 and the failure is due to reasonable cause and not to willful neglect. You must affirmatively show the facts that support a reasonable cause claim.

The determination of whether a failure to disclose a specified foreign financial asset on Form 8938 was due to reasonable cause and not due to willful neglect will be determined on a case-by-case basis, taking into account all pertinent facts and circumstances.

Effect of foreign jurisdiction laws.

The fact that a foreign jurisdiction would impose a civil or criminal penalty on you if you disclose the required information is not reasonable cause.

Accuracy-Related Penalty

If you underpay your tax as a result of a transaction involving an undisclosed specified foreign financial asset, you may have to pay a penalty equal to 40% of that underpayment.

Examples of underpayments due to transactions involving an undisclosed specified foreign financial asset include the following:
✅ You do not report ownership of shares in a foreign corporation on Form 8938 and you received taxable distributions from the company that you did not report on your income tax return.
✅ You do not report ownership of shares in a foreign company on Form 8938 and you sold the shares in the company for a gain and did not report the gain on your income tax return.
✅You do not report a foreign pension on Form 8938 and you received a taxable distribution from the pension plan that you did not report on your income tax return.

Fraud

If you underpay your tax due to fraud, you must pay a penalty of 75% of the underpayment due to fraud.

Criminal Penalties

In addition to the penalties already discussed, if you fail to file Form 8938, fail to report an asset, or have an underpayment of tax, you may be subject to criminal penalties.

Statute of Limitations

If you fail to file Form 8938 or fail to report a specified foreign financial asset that you are required to report, the statute of limitations for the tax year may remain open for all or a part of your income tax return until 3 years after the date on which you file Form 8938.

Extended Statute of Limitations for Failure To Include Income

If you do not include in your gross income an amount relating to one or more specified foreign financial assets, and the amount you omit is more than $5,000, any tax you owe for the tax year can be assessed at any time within 6 years after you filed your return.

For this purpose, specified foreign financial assets include any specified foreign financial assets in which you have an interest without regard to the reporting threshold that applies to you and regardless of any exception from reporting a specified foreign financial asset on Form 8938.

Source: Instructions for Form 8938

Types of foreign assets and whether they are reportable:

Form 8938 Statement of Specified Foreign Financial AssetsTypes of foreign assetsFinCEN Form 114 Report of Foreign Bank and Financial Accounts (FBAR)
YesFinancial (deposit and custodial) accounts held at foreign financial institutionsYes
NoFinancial account held at a foreign branch of a U.S. financial institutionYes
NoFinancial account held at a U.S. branch of a foreign financial institutionNo
No, unless you otherwise have an interest in the account as described aboveForeign financial account for which you have signature authorityYes, subject to exceptions
The account itself is subject to reporting, but the contents of the account do not have to be separately reportedForeign stock or securities held in a financial account at a foreign financial institutionThe account itself is subject to reporting, but the contents of the account do not have to be separately reported
YesForeign stock or securities not held in a financial accountNo
YesForeign partnership interestsNo
NoIndirect interests in foreign financial assets through an entityYes, if sufficient ownership or beneficial interest (i.e., a greater than 50 percent interest) in the entity. See instructions for further detail.
YesForeign mutual fundsYes
NoDomestic mutual fund investing in foreign stocks and securitiesNo
Yes, as to both foreign accounts and foreign non-account investment assetsForeign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantorYes, as to foreign accounts
YesForeign-issued life insurance or annuity contract with a cash-valueYes
YesForeign hedge funds and foreign private equity fundsNo
NoForeign real estate held directlyNo
No, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estateForeign real estate held through a foreign entityNo
NoForeign currency held directlyNo
NoPrecious Metals held directlyNo
NoPersonal property, held directly, such as art, antiques, jewelry, cars and other collectiblesNo
No‘Social Security’- type program benefits provided by a foreign governmentNo
⚠️ This information is current through the publication date. 
⚠️ Please check the instructions for each form for information regarding any future developments and specific years: 
🔗 All Form 8938 revisions
🔗 Individuals Filing the Report of Foreign Bank and Financial Accounts (FBAR)

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