Concept
FATCA, FBAR and Form 8938 are three different things. FATCA is the broader account-reporting and withholding regime that made U.S. status visible to foreign financial institutions. FBAR is a Bank Secrecy Act report filed with FinCEN. Form 8938 is an IRS tax return attachment for specified foreign financial assets.
The IRS comparison page for Form 8938 and FBAR states the key point: Form 8938 does not replace or affect the obligation to file FBAR. A U.S. person can need both.
FATCA
FATCA turns U.S. tax status into a bank compliance question. The Treasury FATCA page describes the regime as targeting non-compliance by U.S. taxpayers using foreign accounts. The IRS page for foreign financial institutions explains that FFIs may register with the IRS and report information about U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners.
For clients, FATCA usually appears as a bank request: W-9, W-8BEN, entity self-certification, controlling person information, U.S. indicia review, or account restrictions. The tax issue may surface when the bank asks for a U.S. TIN or asks why a person born in the United States certified non-U.S. status.
FBAR
FBAR is FinCEN Form 114. FinCEN states in its FBAR purpose guidance that a United States person with a financial interest in, or signature authority over, foreign financial accounts must file if the aggregate value of foreign financial accounts exceeds US$10,000 at any time during the calendar year.
The threshold is aggregate, not per account. One account at US$11,000 can trigger it. Several smaller accounts can also trigger it if the combined value crosses the threshold. Signature authority can matter even where the person does not own the funds.
Form 8938
Form 8938 is filed with the income tax return when specified foreign financial assets exceed the applicable threshold. The IRS FATCA information for individuals page explains that Form 8938 reporting is separate from FBAR and that some domestic entities can also have Form 8938 duties where formed or used to hold specified foreign financial assets.
The Form 8938 thresholds are not a single number. They vary by filing status and by whether the person lives in the United States or abroad, and they are higher for taxpayers living abroad. The IRS comparison of Form 8938 and FBAR sets out the current figures and should be checked against the filing status each year. Form 8938 is broader in some ways and narrower in others: it can include certain foreign stock, partnership interests, financial instruments and interests in foreign entities that are not simply bank accounts, but the thresholds and filing context differ from FBAR.
Comparison
| Question | FBAR | Form 8938 |
|---|---|---|
| Filed with | FinCEN electronically | IRS with income tax return |
| Core law | Bank Secrecy Act | FATCA / IRC section 6038D |
| Trigger | Foreign financial accounts over US$10,000 aggregate | Specified foreign financial assets over status-based thresholds |
| Includes signature authority | Yes | Generally asset ownership, not pure signature authority |
| Can include foreign company/fund interests | Usually not unless account-like | Yes, if specified foreign financial assets |
| Replaces the other? | No | No |
Bank file
Every U.S. person with foreign banking should keep a FATCA and FBAR file:
- Bank name, country, account number or masked identifier.
- Account owner, beneficial owner, and signatories.
- Maximum balance for FBAR and year-end value for Form 8938.
- Currency and exchange rate method.
- FATCA forms submitted to the bank: W-9, W-8, entity classification, controlling persons.
- Source-of-funds support: salary, sale agreement, dividend, loan, inheritance, trust distribution.
- Explanation for joint accounts, nominee accounts, escrow, corporate accounts, and trust accounts.
Entities
Foreign entity accounts create two layers. First, the entity may have its own bank account disclosure or FATCA classification. Second, a U.S. owner may have U.S. forms for the entity itself: Form 5471 for foreign corporations, Form 8865 for foreign partnerships, Form 8858 for foreign disregarded entities or branches, or Form 8621 for PFICs. A clean FBAR does not cure missing entity reporting.
Checklist
- Identify every foreign financial account, including securities accounts and accounts with signature authority.
- Test aggregate maximum balance for FBAR.
- Test specified foreign financial assets for Form 8938.
- Reconcile account ownership with FATCA self-certifications.
- Check whether foreign entity accounts imply Form 5471, Form 8865, Form 8858, or Form 8621.
- Keep exchange rate and balance evidence.
- Review prior years before responding to a bank FATCA request.
Common mistakes
- Treating the US$10,000 FBAR threshold as per account.
- Filing Form 8938 and assuming FBAR is unnecessary.
- Filing FBAR and assuming Form 8938 is unnecessary.
- Ignoring signature authority over company accounts.
- Reporting a foreign company bank account but missing Form 5471.
- Giving inconsistent FATCA certifications across banks.
- Waiting for a bank letter before reviewing prior-year compliance.
Advisor trigger
A U.S. international CPA can handle routine FBAR and Form 8938 preparation. A U.S. tax attorney should be involved if there are missed years, inconsistent bank certifications, nominee accounts, undisclosed income, willfulness concerns, or IRS or FinCEN contact.
Q&A
Does Form 8938 replace FBAR
No. The IRS comparison page is explicit that Form 8938 does not replace or affect the FBAR obligation. They are separate filings under different laws — Form 8938 with the IRS under FATCA, FBAR with FinCEN under the Bank Secrecy Act — and a U.S. person can need both for the same accounts.
Is the US$10,000 FBAR threshold per account
No. It is aggregate. FBAR is triggered when the combined maximum value of all foreign financial accounts exceeds US$10,000 at any point in the calendar year. A single account at US$11,000, or several smaller accounts that together cross the line, both trigger it.
What are the Form 8938 thresholds
They are status-based, not a single figure. They depend on filing status and on whether the person lives in the United States or abroad, with higher thresholds for taxpayers abroad. The current amounts are on the IRS comparison page and should be checked against filing status each year.
Can an account with no income still be reportable
Yes. FBAR and Form 8938 are reporting regimes, not income tests. A dormant account that produced no interest can still be reportable if the value thresholds are met, and signature authority over an account can create an FBAR duty even with no ownership of the funds.
Does reporting a foreign company account cover the company itself
No. The account disclosure is separate from entity reporting. A U.S. owner may still need Form 5471, Form 8865, Form 8858 or Form 8621 for the entity, and a clean FBAR does not cure a missing entity return.
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