If you have foreign financial assets, such as stocks, a pension or a business interest, you may be wondering whether you are required to report them on IRS Form 8938 under the Foreign Account Tax Compliance Act (FATCA). FATCA reporting can be complex, and you shouldn’t have to rely on guesswork. Foreign financial institutions may be required to report information about U.S. account holders directly to the IRS.
At Silver Tax Group, our attorneys help you understand your FATCA reporting obligations and determine whether Form 8938 applies to your specific situation. Let our experienced tax attorneys provide the help needed for your FATCA filing.
We Determine Whether You’re Over the Form 8938 Threshold
Your FATCA filing obligation depends on your residency and filing status. Our lawyers review your assets against the thresholds that may apply to you.
Thresholds if You Live in the US
If you live in the United States, different Form 8938 reporting thresholds apply based on your filing status:
- Single or married filing separately: Over $50,000 on the last day of the year, or $75,000 at any point
- Married filing jointly: Over $100,000 on the last day of the year, or $150,000 at any point
Thresholds if You Live Abroad
If you live outside the United States, higher reporting thresholds may apply, depending on your filing status:
- Single or married filing separately: Over $200,000 on the last day of the year, or $300,000 at any point
- Married filing jointly: Over $400,000 on the last day of the year, or $600,000 at any point
Living abroad for this purpose generally means your tax home is outside the U.S. and you meet the physical presence test or the bona fide residence test. The physical presence test generally means being present in a foreign country for a minimum of 330 full days during a 12-month period.
Getting this wrong in either direction creates risk, so we help determine and document the filing position for your return. Learn more about FATCA reporting requirements through our full guide to FATCA foreign asset reporting.
We Help Identify Assets the IRS Requires You to Report
Specified foreign financial assets are more than just bank accounts. As part of our international tax services, we review your full financial picture, including:
- Foreign securities or stocks held directly and not through a U.S. brokerage account
- Interests in foreign corporations, partnerships and trusts
- Foreign pensions and retirement accounts
- Foreign life insurance and annuity contracts with cash value
Assets That Typically Don’t Require Separate Reporting
Not every foreign asset requires separate reporting on Form 8938, which is why a systematic attorney review matters more than a checklist for accurate FATCA compliance. Our FATCA penalty defense starts with the facts behind the late or missing Form 8938.
Here are some assets that may be excluded or handled differently depending on how they are held and reported:
- Assets already reported on Form 3520, Form 5471, Form 8621 or Form 8865, though they may still need to be identified
- Foreign real estate held directly in your own name, not through a foreign entity
We Distinguish FATCA From FBAR to Coordinate Key Filings
FATCA and FBAR are separate reporting requirements. FATCA uses Form 8938, which is filed with your tax return, while FBAR uses FinCEN Form 114, which is filed separately with FinCEN. The reporting thresholds also differ, and many taxpayers may need to file both for the same accounts.
Where They’re Filed
Attach FATCA Form 8938 to your annual IRS tax return. File FBAR FinCEN Form 114 separately through FinCEN’s BSA E-Filing System, not with your tax return.
Why the Overlap Creates Risk
A single missed foreign account can trigger a separate FBAR penalty and a separate FATCA penalty. Filing one form does not meet the other requirement. We offer FBAR filing services and coordinate your FBAR and FATCA filings as part of one engagement, giving you a more complete view of your reporting obligations.
How We Defend You If the IRS Flags a FATCA Penalty
If the IRS questions a late or missing Form 8938, we respond promptly to avoid penalties that may continue to accrue. Our attorneys help build a reasonable-cause argument where the facts support one. We also respond to IRS notices and requests for information directly on your behalf and can represent you if the matter escalates beyond a notice.
What Can Happen When FATCA Reporting Is Missed
FATCA penalties can add up quickly when required information is missing, incomplete or incorrect. Here’s what’s at stake if you wait:
- $10,000 penalty for failing to file a complete and correct Form 8938
- Up to an additional $50,000 for not filing after IRS notification
- A potential 40% penalty on underpayments tied to undisclosed foreign assets
Why an Attorney Handles FATCA at Our Firm
Attorney-client privilege may protect confidential legal communications with our attorneys, which is especially important if a case turns adversarial. We can discuss past missed filings or unreported assets and determine your disclosure strategy before anything is submitted to the IRS.
Talk to a Silver Tax Group FATCA Tax Attorney
A timely review of your foreign assets may help preserve more options. At Silver Tax Group, we offer one team to review your FBAR and FATCA obligations together. Call us at 855-900-1040 or contact us online to schedule a free consultation.
