Understanding FBAR and FATCA Filing Requirements [2026 Update]

Do you have a foreign bank account or overseas investments? As a U.S. taxpayer with foreign assets, you may have heard terms like FBAR and FATCA.

If those terms are unfamiliar, you are not alone. Many taxpayers first learn about these requirements only after discovering that the United States requires reporting of certain foreign financial accounts.

This article explains the difference between FBAR and FATCA, who may need to file these reports, and what information is typically required.

If you have already missed a required filing, we will also discuss options that may help address the issue and potentially reduce penalties.

FBAR vs FATCA: Quick Overview

FBAR and FATCA are two separate U.S. reporting systems for foreign financial accounts and assets.

FBAR requires certain U.S. persons to report foreign financial accounts to the Financial Crimes Enforcement Network if the combined value of those accounts exceeds $10,000 at any time during the year.

FATCA requires certain U.S. taxpayers to report foreign financial assets to the IRS on Form 8938 when those assets exceed specific reporting thresholds.

While the two systems overlap in some situations, they are separate reporting requirements. Some taxpayers must file both reports.

What Is FBAR?

FBAR stands for Report of Foreign Bank and Financial Accounts. It is an annual reporting requirement for U.S. persons who hold certain foreign financial accounts.

U.S. persons include citizens, residents, trusts, estates, and certain domestic entities.

The purpose of FBAR is to combat tax evasion, money laundering, and other financial crimes by requiring disclosure of foreign financial accounts held by U.S. taxpayers.

FBAR is not filed with the IRS as part of a tax return. Instead, it is submitted electronically to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

Importantly, FBAR is a reporting requirement for financial transparency. It is not a tax return and does not itself create a tax liability.

Understanding FATCA Reporting

FATCA stands for the Foreign Account Tax Compliance Act. It is a U.S. law enacted in 2010 to prevent tax evasion involving foreign financial assets.

Under FATCA, certain U.S. taxpayers must report foreign financial assets to the IRS using Form 8938. This form is filed with the taxpayer’s annual federal income tax return.

FATCA also requires many foreign financial institutions to report information about accounts held by U.S. taxpayers. The United States has entered into reporting agreements with more than 100 countries that require foreign banks to share certain account information with the IRS.

Because of these reporting agreements, the IRS increasingly receives information about foreign accounts directly from foreign financial institutions.

Key Differences Between FBAR and FATCA

Do You Need to File Both FBAR and FATCA?

FBAR and FATCA both apply to U.S. taxpayers with foreign financial assets, but they serve different purposes and have different reporting requirements.

Some taxpayers must file both reports, while others may only need to file one.

The following overview explains the key differences.

Who Files

FBAR applies to U.S. persons and certain domestic entities that have ownership, financial interest, or signature authority over foreign financial accounts. Accounts located in U.S. territories or possessions are generally excluded.

FATCA applies to U.S. persons with certain foreign financial assets. This includes U.S. citizens, resident aliens, and certain domestic entities with specified foreign assets.

Where the Forms Are Filed

FBAR is submitted electronically to the Financial Crimes Enforcement Network using FinCEN Form 114.

FATCA reporting is done through IRS Form 8938, which is attached to the taxpayer’s federal income tax return.

Reporting Thresholds

FBAR must generally be filed if the combined value of foreign financial accounts exceeds $10,000 at any time during the calendar year.

FATCA has higher reporting thresholds. For taxpayers living in the United States, Form 8938 must generally be filed if foreign financial assets exceed $50,000 on the last day of the tax year or $75,000 at any point during the year. For married taxpayers filing jointly, the thresholds are $100,000 at year end or $150,000 at any point during the year. Higher thresholds apply for taxpayers living abroad.

What Gets Reported

FBAR applies to accounts held at foreign financial institutions, including bank accounts, investment accounts, certain trusts, and life insurance or annuity contracts with cash value. The reporting requirement may also apply to accounts where a taxpayer has signature authority or an indirect beneficial interest.

FATCA reporting includes many of the same financial assets but may also require disclosure of foreign securities, certain foreign partnership interests, and ownership in some foreign entities.

Foreign real estate and personal property such as art or collectibles are generally not subject to FBAR or FATCA reporting. Certain foreign retirement accounts may also be excluded depending on the specific program.

Who Must File FBAR or FATCA?

U.S. taxpayers with foreign financial accounts or assets may need to file FBAR, FATCA, or both depending on the value and type of assets involved.

You may need to file an FBAR if:

• You are a U.S. citizen, resident, or certain U.S. entity
• You have a financial interest in or signature authority over foreign financial accounts
• The combined value of those accounts exceeded $10,000 at any time during the year

You may need to file FATCA Form 8938 if:

• You are a U.S. taxpayer with specified foreign financial assets
• The value of those assets exceeds the applicable reporting threshold

For taxpayers living in the United States, the FATCA reporting threshold generally begins at:

• $50,000 in foreign financial assets at the end of the tax year, or
• $75,000 at any point during the year

For married taxpayers filing jointly, the thresholds increase to:

• $100,000 at the end of the year, or
• $150,000 at any time during the year

Higher thresholds may apply to taxpayers living outside the United States.

Because FBAR and FATCA are separate reporting systems, some taxpayers must file both reports if their foreign accounts meet the requirements of each program.

FBAR and FATCA Example Scenarios

To better understand how these rules apply, consider several common examples.

John is a single taxpayer with $8,000 in a Greek bank account.

• John does not need to file an FBAR because the total value of his foreign accounts does not exceed $10,000.
• John does not need to file Form 8938 because his foreign financial assets are below the FATCA threshold for single taxpayers living in the United States.

Sumitha holds $9,000 in each of six separate accounts in India, totaling $54,000.

• Sumitha must file an FBAR because the combined value of her foreign accounts exceeds $10,000.
• She must also file Form 8938 because her foreign financial assets exceed the FATCA threshold for single taxpayers.

Mr. and Mrs. Song have $80,000 in combined accounts in Korea.

• The couple must file an FBAR because their foreign accounts exceed the $10,000 threshold.
• They do not need to file Form 8938 because their total assets fall below the FATCA thresholds for married taxpayers filing jointly.

Sarah inherits €100,000 from a relative in France and holds the funds in a French bank account before transferring the money to the United States.

• Sarah must file an FBAR because the account balance exceeded $10,000 during the year.
• She must also file Form 8938 because the value of the account exceeded the FATCA threshold.

Foreign gifts or inheritances can also trigger additional reporting requirements, including IRS Form 3520.

What Happens If You Missed an FBAR or FATCA Filing?

Missing an FBAR or FATCA filing deadline can lead to significant penalties, but options may exist to address the situation.

The IRS offers several compliance programs that allow taxpayers to voluntarily correct past reporting issues involving foreign financial accounts.

Common options include:

• Delinquent FBAR Submission Procedures
• Delinquent International Information Return Submission Procedures
• Streamlined Filing Compliance Procedures

These programs are generally available only when taxpayers come forward voluntarily before the IRS initiates contact.

If the IRS contacts the taxpayer first, the situation may move into a formal examination or audit process.

Addressing Foreign Reporting Issues

Resolving foreign reporting issues often involves reviewing prior filings, preparing delinquent FBAR reports, and amending tax returns when necessary.

In some situations, taxpayers may be able to demonstrate reasonable cause for missing a filing requirement. When reasonable cause can be established, the IRS may agree to close the matter without penalties.

However, the longer a taxpayer waits to address missing filings, the more difficult it may become to demonstrate that the failure to file was non-willful.

Working With an Attorney on FBAR and FATCA Issues

FBAR and FATCA reporting requirements can be complicated. Taxpayers with foreign financial accounts sometimes learn about these rules only after working with a new tax professional or receiving an IRS notice.

Tax Attorney Sammy Kim focuses her practice on tax controversy and international tax compliance matters, including situations involving foreign financial reporting obligations.

The Law Offices of Sammy Kim is located in Fairfax, Virginia and works with clients throughout the United States. Virtual appointments are available for individuals who need assistance reviewing FBAR or FATCA reporting obligations.

Schedule a consultation now to discuss your situation.