FBAR and FATCA Filings: Overview and Penalties

FBAR (Foreign Bank Account Report)

Who Must File:

  • S. persons (citizens, residents, and certain entities) with a financial interest in or signature authority over foreign financial accounts if the aggregate value exceeds $10,000 at any time during the calendar year.

What to File:

  • File FinCEN Form 114 (FBAR) electronically via the BSA E-Filing System; do not file with your tax return.

When to File:

  • Annual deadline is April 15, with an automatic extension to October 15—no request needed.

Information Required:

  • Name, SSN/ITIN, address, account details (name, number, type, institution, maximum value), and joint owner information if applicable.

Recordkeeping:

  • Keep records for at least five years, including bank statements and account details.

Penalties:

  • Non-willful violations: Up to $16,536 per violation (2025).
  • Willful violations: Greater of $165,353 or 50% of the account balance at the time of violation.

FATCA (Foreign Account Tax Compliance Act)

Who Must File:

  • S. taxpayers with specified foreign financial assets exceeding certain thresholds (e.g., $50,000 for single filers, higher for joint filers or those living abroad).

What to File:

  • IRS Form 8938, attached to your annual tax return.

When to File:

  • Due with your annual federal income tax return (April 15 or October 15 with extension).

Information Required:

  • Details on specified foreign financial assets, including account numbers, institutions, and maximum values.

Penalties:

  • Failure to file Form 8938: $10,000 penalty, with additional penalties up to $50,000 for continued failure after IRS notification.
  • Potential 40% penalty on underreported income from undisclosed assets.

Summary Table

Requirement

Form

Filing System

Deadline

Penalties

FBAR

FinCEN 114

BSA E-Filing (FinCEN)

April 15 (auto ext. to Oct 15)

Up to $16,536 (non-willful); $165,353 or 50% of balance (willful)

FATCA

IRS 8938

With IRS tax return

April 15 (ext. to Oct 15)

$10,000–$50,000+; 40% on underreported income

 

Key Points:

  • FBAR and FATCA are separate but may both apply; failing to file either can result in substantial penalties.
  • FBAR is filed with FinCEN, not the IRS, while FATCA (Form 8938) is filed with your tax return.
  • Both require detailed reporting of foreign financial accounts and assets.

Careful compliance is essential to avoid severe financial penalties.