Form 8938 (FATCA Foreign Assets Statement)

Form 8938 implements the Foreign Account Tax Compliance Act on the individual side. It is filed with the income tax return, not separately, and reports foreign financial accounts plus directly held foreign stock, foreign partnership interests, foreign mutual funds, and certain foreign pension and insurance arrangements. Thresholds for filers living in the U.S.: single, $50,000 at year end or $75,000 at any time; married filing jointly, $100,000 and $150,000. Filers living abroad have thresholds four times higher.

The form overlaps heavily with the FBAR but is not a substitute for it. Both are usually required once foreign accounts are material. Form 8938 asks for more detail: the income each asset produced and where on the return it was reported, which is why a reported account with unreported interest stands out.

The penalty is $10,000 for failing to file, up to an additional $50,000 for continued failure after IRS notice, and a 40% accuracy-related penalty on any underpayment attributable to an undisclosed asset. An unfiled Form 8938 also keeps the statute of limitations open on the entire return, not just the foreign items.