US taxpayers with foreign financial accounts face two separate reporting regimes that often overlap but are never interchangeable: the FBAR (FinCEN 114) under the Bank Secrecy Act, and FATCA (Form 8938) under IRC §6038D. Compliance with one does not satisfy the other. Each has its own thresholds, its own form, its own filing destination, its own penalties, and its own scope of assets. Here’s how to tell them apart and why you almost certainly need both if you have significant foreign account balances.
TL;DR side-by-side
| Aspect | FBAR (FinCEN 114) | FATCA (Form 8938) |
|---|---|---|
| Statutory authority | 31 USC §5314 (Bank Secrecy Act) | IRC §6038D (FATCA, enacted 2010) |
| Filed with | FinCEN via BSA E-Filing System — separate from tax return | IRS, attached to Form 1040 |
| Trigger threshold | $10,000 aggregate in foreign accounts at any point during the year | Varies by filing status and residence (see matrix below) |
| Single filer — US resident | $10,000 aggregate | $50,000 year-end or $75,000 peak |
| MFJ — US resident | $10,000 aggregate | $100,000 year-end or $150,000 peak |
| Single filer — abroad | $10,000 aggregate | $200,000 year-end or $300,000 peak |
| MFJ — abroad | $10,000 aggregate | $400,000 year-end or $600,000 peak |
| Account types covered | Bank accounts, brokerage accounts, mutual funds, pension accounts, certain insurance with cash value, accounts over which you have signature authority | ”Specified foreign financial assets” — foreign accounts plus foreign-issued securities, foreign partnership interests, foreign hedge fund stakes, certain insurance with cash value |
| US brokerage foreign holdings | Not covered (held in US account) | Not covered (held through US institution) |
| Real estate | Not covered | Not covered (direct ownership) |
| Filing date | April 15, automatic extension to October 15 (no separate extension request needed) | Same as tax return — April 15 / October 15 with extension |
| Non-willful penalty | Up to ~$156,107 per violation per year (2024 inflation-adjusted; per Bittner) | $10,000 initial + up to $50,000 continuing |
| Willful penalty | Greater of ~$156,107 or 50% of highest account balance | $10,000 + up to $50,000 + 40% accuracy-related on underreported income |
| Criminal exposure | Yes — willful failure: up to 5 years; willful false filing: up to 10 years | Generally civil only |
| Statute of limitations | 6 years from due date | 6 years (also tolled if return not filed) |
Use the FBAR Threshold Calculator to identify which calendar years you triggered the FBAR requirement, and the FATCA Form 8938 Calculator to confirm whether Form 8938 is also required based on your filing status and residency.
Key differences
Account scope
The asset scope differs in ways that catch people off guard in both directions.
FBAR covers any “foreign financial account” — broadly defined as an account held at a financial institution located outside the US. This includes:
- Foreign bank accounts (checking, savings, fixed deposits)
- Foreign brokerage accounts holding securities
- Foreign mutual fund accounts
- Foreign pension and retirement accounts
- Certain life insurance policies with cash surrender value held at foreign insurers
- Any account over which a US person has signature authority, even without ownership
The signature authority rule is important: a US executive who is a signatory on a foreign subsidiary’s bank account — with no personal financial interest in that account — triggers FBAR. Most multinationals don’t inform their US-person employees that routine corporate treasury signing authority creates personal FBAR obligations.
FBAR does not cover direct ownership of foreign securities held through a US brokerage account, or direct ownership of foreign real estate.
FATCA (Form 8938) covers “specified foreign financial assets” — a broader definition in some respects:
- All foreign financial accounts (broadly overlapping with FBAR)
- Foreign-issued stocks and securities held directly or through foreign accounts
- Interests in foreign partnerships, foreign LLCs, and foreign trusts
- Foreign private equity and hedge fund investments
- Certain foreign-issued life insurance contracts with cash value
FATCA does not cover:
- Foreign real estate held directly (though real estate held through a foreign entity may be reportable)
- Physical precious metals or collectibles held for personal use
- Accounts held at US branches of foreign banks (the account is a US account for FBAR/FATCA purposes)
- Foreign financial assets properly reported on other forms (e.g., Schedule B, Form 3520, Form 5471)
Joint accounts
The filing mechanics differ for married couples:
- FBAR: each spouse who has signature authority or a financial interest in a foreign account files separately. A married couple with a joint foreign account technically both trigger FBAR. However, Form 114a (Record of Authorization to Electronically File FBARs) allows spouses to designate one to file on behalf of both, provided the account is jointly owned
- FATCA: married filing jointly (MFJ) filers have higher thresholds that apply to their combined foreign financial assets. If you file MFJ and your combined foreign assets don’t reach $100k year-end / $150k peak (domestic) or $400k year-end / $600k peak (abroad), neither spouse files Form 8938
Signature authority vs. beneficial ownership
This is the most practical difference for US persons at corporations:
- FBAR: signature authority alone — without any ownership interest — triggers the filing obligation. No financial benefit, no ownership stake, no income — just the ability to move money from the account
- FATCA (Form 8938): requires beneficial ownership or direct holdings. Mere signature authority without an ownership interest does not trigger Form 8938
A US-person CFO who has signing rights over a foreign subsidiary’s operating account owes FBAR but not Form 8938. Filing Form 8938 in this case isn’t penalized (it’s simply unnecessary), but failing to file FBAR is a civil — and potentially criminal — violation.
Why filing one doesn’t substitute for the other
The two regimes are administered by different agencies (FinCEN for FBAR; the IRS for Form 8938), share different data streams, and have genuinely different legal bases. The IRS receives information reported on Form 8938 and cross-references it with FBAR data received from FinCEN. A taxpayer who files one but not the other when both are required creates a detectable discrepancy.
Common situations where only one applies:
- FBAR required, Form 8938 not required: Taxpayer has $15,000 in a foreign bank account (FBAR threshold crossed); the same taxpayer files single, lives in the US, and the balance is below the $50k year-end / $75k peak Form 8938 threshold
- Form 8938 required, FBAR not required (rare): Taxpayer holds a $300,000 interest in a foreign limited partnership with no associated bank account; this is a FATCA-specified foreign financial asset but not a “foreign financial account” for FBAR purposes
- Both required (most common for expats with significant balances): Taxpayer has $80,000 in a foreign bank account and lives abroad — both the $10k FBAR threshold and the $200k/$300k FATCA thresholds are relevant (though in this case the FATCA threshold may not be crossed for a single filer abroad with only $80k)
The IRS has publicly stated that Form 8938 was not designed to replace FBAR and that both are separately enforceable obligations.
Penalty exposure (2024 inflation-adjusted figures)
FBAR civil penalties
Non-willful FBAR violations carry a penalty of up to $156,107 per violation per year. The Supreme Court’s 2023 decision in Bittner v. United States resolved a circuit split by ruling that the penalty accrues per report (i.e., per year) rather than per account. A taxpayer with 5 unreported foreign accounts in a single year owes one non-willful penalty up to $156,107 for that year, not five. This was a significant taxpayer victory for multi-account cases.
Willful FBAR violations carry the greater of $156,107 or 50% of the highest aggregate balance of unreported accounts during the violation period. For a taxpayer with $500,000 in undisclosed foreign accounts, the willful penalty can reach $250,000 per year.
Criminal penalties for willful failure to file: up to 5 years imprisonment and $250,000 fine. For willful filing of a false FBAR: up to 10 years imprisonment and $500,000 fine.
The reasonable cause exception is narrow for FBAR purposes. The IRS and courts apply a high standard — relying on incorrect advice from a US (non-cross-border) accountant rarely qualifies. Proving reasonable cause typically requires contemporaneous documentation of the advice received.
FATCA (Form 8938) penalties
Initial failure to file Form 8938: $10,000 penalty per form per year.
Continuing failure after IRS notice: $10,000 per 30-day period after the IRS mails notification of failure, up to a maximum of $50,000 in continuing penalties.
Accuracy-related penalty on underreported foreign income: 40% of the underpayment attributable to undisclosed foreign financial assets — double the standard 20% accuracy penalty for domestic underreporting.
Statute of limitations: 6 years, not 3. For Form 8938 omissions, the IRS has an extended window to assess tax. If the omission involves more than $5,000 of foreign income, the 6-year SOL applies to the entire return, not just the omitted portion.
Common scenarios
Scenario 1: First year living abroad (most common mistake)
A taxpayer moves to the UK in March of a given year. By year-end, their UK current account holds £65,000 (~$82,000).
- FBAR: the aggregate exceeded $10,000 at some point during the year → FBAR required
- FATCA: single filer, lived abroad for most of the year. FATCA “abroad” thresholds apply if the taxpayer qualifies as a bona fide resident or was present 330+ days abroad for the year. At $82,000, below the $200k year-end / $300k peak single-abroad thresholds → Form 8938 not required in this year
- Common mistake: assuming the FATCA threshold not being crossed means FBAR isn’t required either. Wrong. FBAR threshold is $10,000. Both analyses are separate.
Scenario 2: US-based corporate signatory
A US-resident CFO has signing authority over four foreign subsidiary bank accounts totaling $2 million. She has no personal financial interest in any account.
- FBAR: signature authority over foreign financial accounts with aggregate > $10,000 → FBAR required (one FBAR covering all four accounts, reporting only the accounts over which she has signature authority)
- Form 8938: no beneficial ownership or direct financial interest → Form 8938 not required
- Common mistake: either (a) not filing FBAR because “it’s a company account, not mine” — wrong, the obligation is based on signature authority; or (b) filing Form 8938 for the same accounts — unnecessary
Scenario 3: Expat couple with high balances
A married couple living in Germany with €350,000 ($385,000) in a joint German bank account.
- FBAR: aggregate > $10,000 → each spouse files FBAR (or uses Form 114a to designate one to file for both)
- FATCA: MFJ, abroad — thresholds are $400,000 year-end / $600,000 peak. At $385,000 year-end → Form 8938 not required (below threshold) unless balances peaked above $600,000 during the year
- Key point: FBAR is required; Form 8938 depends on the peak balance during the year, not just the year-end figure
Authority
- 31 USC §5314 (FBAR statute): https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section5314
- 31 CFR §1010.350 (FBAR regulations): https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X
- IRC §6038D (FATCA reporting requirement): https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6038D
- Form 8938 instructions: https://www.irs.gov/pub/irs-pdf/i8938.pdf
- FinCEN 114 Reference Guide: https://www.fincen.gov/sites/default/files/shared/FBAR%20Reference%20Guide.pdf
- Bittner v. United States, 598 US 3 (2023) — Supreme Court ruling on per-report vs per-account FBAR penalty
- Last verified: 2026-04-30