Foreign Accounts: FBAR and FATCA

If you hold accounts outside the United States — an inherited account abroad, a foreign brokerage, an overseas business account, a foreign pension, even signature authority over an employer’s account — two separate regimes apply, with different thresholds, different forms, and different agencies. Filing one does not satisfy the other.

Foreign Bank Account Report (FBAR)

File FinCEN Form 114 if the aggregate maximum value of all your foreign financial accounts exceeded $10,000 at any point in the year. Ten accounts of $1,100 each trigger it. It goes to FinCEN, not the IRS, and it is filed electronically and separately from your return. Signature authority alone counts even with no beneficial interest.

Foreign Account Tax Compliance Act (FATCA)

File Form 8938, “Statement of Specified Foreign Financial Assets” with your return under IRC §6038D, “Information with respect to foreign financial assets” if specified foreign assets exceed $50,000 at year end or $75,000 at any point (single filers living in the US; thresholds rise for joint filers and substantially for expatriates).

The penalties are what make this worth your attention. Non-willful FBAR failures run up to roughly $10,000 per violation, adjusted for inflation — and the Supreme Court held in Bittner v. United States, 598 U.S. 85 (2023), that the non-willful penalty applies per report, not per account, which was a substantial taxpayer victory. Willful failures are another matter entirely: the penalty reaches the greater of $100,000 or 50% of the account balance, per year, and willfulness includes reckless disregard. Foreign accounts are also the one area where the IRS offers formal correction procedures — use them proactively rather than waiting, because they close once an examination begins.