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A US taxpayer required to file Form 8938 who skips it can face a $10,000 penalty. The IRS can add up to $50,000 more if the form is still missing 90 days after its notice. Our CPAs and EAs prepare the FATCA side of the return and answer the foreign bank paperwork that comes with it.
FATCA, the Foreign Account Tax Compliance Act, puts reporting duties on US taxpayers and the foreign banks that hold their money. We handle US taxpayer filings and bank paperwork through our FATCA reporting services. A client with foreign bank accounts can meet FBAR and FATCA filing requirements in the same year, and we review both in one pass.
On the taxpayer side, FATCA reporting means Form 8938, which lists specified foreign financial assets once their total value exceeds the reporting threshold. The threshold depends on filing status and on whether the taxpayer lives in the US or abroad.
On the bank side, foreign financial institutions identify US account holders and report those accounts to the IRS, directly or through their own tax authority. Banks abroad send US clients a W-9 or a self-certification form to meet that duty.
| FBAR | FATCA (Form 8938) | |
|---|---|---|
| Filed with | FinCEN, through BSA E-Filing | The IRS, with the income tax return |
| Threshold | Over $10,000 combined at any time in the year | Over $50,000 at year end or $75,000 at any time, single filer in the US |
| Due | April 15, automatic extension to October 15 | The return due date, extensions included |
FATCA vs FBAR is not a choice: one foreign account can belong on both reports.
We match the balances on the FBAR and FATCA reports line by line before filing.
We check FATCA and FBAR requirements each year, since a move abroad or a marriage changes the Form 8938 threshold.
Which report each foreign asset goes on
FBAR goes to FinCEN. Form 8938 goes to the IRS with the tax return.
Savings, checking or brokerage held abroad
No ownership interest, for example an employer's account
Form 8938 applies only above its own threshold, set by filing status and residence. The FBAR applies above $10,000 combined.
In a FATCA letter, a foreign bank asks a US client to confirm tax status by a date the bank sets. The client answers on a W-9 or on the bank's own FATCA and CRS self-certification form. We check the form against the client's US filings before anything goes back, so the details the bank passes on match what the client has filed. When past FBARs or Form 8938s are missing, we bring those years current first.
Line 4 of Form W-9 is the field for an exemption from FATCA reporting code, and the IRS limits those codes to certain entities, not individuals. In the W-9 instructions, the IRS lists who is exempt from FATCA reporting: tax-exempt organizations, banks, brokers, publicly traded corporations and similar payees. A US individual leaves the field blank, and we check the bank's copy before it goes back.
We prepare Form 8938 with the return, asset by asset.
We e-file the FBAR for the same accounts by its own deadline.
We bring past years current through streamlined filing when the client qualifies.
We price each foreign account and asset that goes on the report.
Each past year is its own return and its own set of reports.
Forms such as 5471 or 3520 filed with Form 8938 add their own preparation time.
The lightest file is one foreign account on one year's return. These are the factors, not a quote.
I have used Dimov CPA for my past two years of taxes. They helped me complete my tax returns after being overseas for 30 years and were very helpful with my international investments. Xintian specifically was excellent with communication and advice.
Send the list of foreign accounts and assets, and we quote a fixed fee before anything is filed.
