FBAR and FATCA: What Every American Expat Must Report

# FBAR and FATCA: What Every American Expat Must Report

Alexandru Bittner, a dual U.S.–Romanian citizen, was assessed a **$2.72 million penalty** for failing to file required reports on 272 foreign financial accounts. He had not hidden money or dodged tax — he simply hadn't filed the right Treasury form. The government calculated the penalty per account. In *Bittner v. United States* (decided February 28, 2023), the U.S. Supreme Court ruled 5–4 that the penalty applies *per report*, not per account, slashing his exposure to roughly $50,000 ([Supreme Court of the United States](https://www.supremecourt.gov/opinions/22pdf/21-1195_h2cj.pdf)).

That case is the clearest warning Americans abroad will get: the United States is one of the only countries that taxes and tracks its citizens by citizenship rather than residence, and the reporting obligations attached to foreign accounts carry penalties far larger than the tax most expats actually owe. Two separate regimes drive those obligations — the FBAR and FATCA — and many expats must file both, to two different parts of the Treasury, every single year.

Two reports, two agencies, one common confusion

The single most expensive misunderstanding is treating the FBAR and FATCA as the same thing. They are not.

• The **FBAR** (Report of Foreign Bank and Financial Accounts, **FinCEN Form 114**) goes to the **Financial Crimes Enforcement Network**, a Treasury bureau that is *separate from the IRS*. It is filed electronically through the BSA E-Filing System, not with your tax return ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar)).
• **FATCA** reporting for individuals happens on **IRS Form 8938** (Statement of Specified Foreign Financial Assets), which is *attached to your annual Form 1040* ([IRS](https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers)).

They have different thresholds, different definitions of what counts, and different deadlines. Filing one does not satisfy the other. The IRS publishes a side-by-side comparison precisely because the overlap trips people up ([IRS](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements)).

The FBAR: a $10,000 trigger that catches almost everyone

The FBAR threshold is low and aggregate. You must file if you are a U.S. person with a financial interest in, or signature authority over, foreign financial accounts whose **combined value exceeded $10,000 at any point during the calendar year** ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar)).

Read that carefully, because two details catch expats off guard:

1. **It is aggregate, not per account.** Four accounts holding $3,000 each — a checking account, a savings account, a pension, and a brokerage account — together cross the $10,000 line even though no single account does.
2. **It is the peak balance, not the year-end balance.** If your accounts briefly held $10,001 — say, the day a property sale or annual bonus landed — you must file for that year even if the balance dropped the next week.

"Financial accounts" is broad. It includes foreign checking and savings accounts, brokerage accounts, mutual funds, and many foreign pension and certain insurance products with cash value. It also includes accounts where you have only **signature authority** — for example, a treasurer on a foreign club's account or an employee who can direct an employer's foreign account — even if none of the money is yours ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar)).

FBAR deadline

The FBAR is due **April 15**, but FinCEN grants an **automatic extension to October 15** — no form or request required. You do not need to ask for it ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar)). That effectively gives every filer a six-month cushion, but the underlying obligation does not go away if you ignore it.

FATCA and Form 8938: higher thresholds, broader assets

Form 8938 covers "specified foreign financial assets," which is a wider net than the FBAR's "accounts." In addition to foreign bank and brokerage accounts, it captures foreign stock or securities held outside an account, interests in foreign entities, and foreign financial instruments and contracts held for investment ([IRS](https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers)).

The thresholds are higher than the FBAR's, and — importantly for expats — they are **much higher for people who live abroad** than for people living stateside. To qualify for the higher "living abroad" thresholds, your tax home must be in a foreign country and you must meet a presence test (generally a U.S. citizen who is a bona fide resident of a foreign country, or present abroad at least 330 full days in a 12-month period) ([IRS](https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-foreign-financial-assets)).

For taxpayers **living abroad**, you must file Form 8938 if the total value of specified foreign financial assets exceeds ([IRS](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements)):

| Filing status | Last day of the tax year | Any time during the year | |---|---|---| | Single / married filing separately | more than **$200,000** | more than **$300,000** | | Married filing jointly | more than **$400,000** | more than **$600,000** |

For comparison, taxpayers **living in the United States** hit Form 8938 at just **$50,000 / $75,000** (single) and **$100,000 / $150,000** (married filing jointly) ([IRS](https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-foreign-financial-assets)). The expat thresholds are roughly four times higher — a rare instance where living abroad reduces, rather than adds, paperwork.

The overlap problem

Because the FBAR triggers at $10,000 and Form 8938 (for expats) at $200,000+, it is common to owe an FBAR but not a Form 8938. It is also common, once your assets grow, to owe **both** — and to report many of the same accounts twice, on two different forms, to two different agencies. There is no "file once" shortcut. The IRS is explicit that filing Form 8938 does not relieve you of the FBAR, and vice versa ([IRS](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements)).

Note also that FATCA operates on a second track you never see: foreign banks themselves report U.S. account holders' information directly to the IRS under FATCA's institutional rules. So the IRS often already has data on your accounts — which is why a missing form is easy for them to spot.

The penalties are the real story

The tax owed by a typical middle-class expat is frequently zero, thanks to the Foreign Earned Income Exclusion and foreign tax credits. The *penalties for not filing the forms* are where the danger lives.

**FBAR penalties.** The statute sets a base civil penalty of up to **$10,000 for a non-willful** violation and, for a **willful** violation, the greater of **$100,000 or 50% of the account balance** at the time of the violation. These amounts are adjusted annually for inflation; for penalties assessed on or after January 17, 2025, the inflation-adjusted maximums are roughly **$16,536** (non-willful) and **$165,353 or 50% of the balance** (willful) ([IRS](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements)). Criminal penalties can also apply in egregious cases.

The *Bittner* ruling matters here: a non-willful penalty now generally applies **per annual report**, not per unreported account ([Supreme Court of the United States](https://www.supremecourt.gov/opinions/22pdf/21-1195_h2cj.pdf)). That is a meaningful limit, but "per year" still adds up fast for someone who missed five or six years.

**Form 8938 penalties.** Failure to file can bring a **$10,000** penalty, plus an additional **$10,000 for each 30 days** of non-filing after the IRS sends notice, up to a **maximum additional $50,000** — a potential **$60,000** total, before any criminal exposure ([IRS](https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements)). Understatements of tax tied to undisclosed foreign assets can also draw a 40% accuracy penalty.

If you've already missed years: relief exists

Many Americans discover these obligations long after they should have started filing — often when a foreign bank asks for a W-9 or their U.S. tax preparer asks about overseas accounts. The IRS offers structured ways to come into compliance, and using them is far cheaper than waiting to be found.

• **Streamlined Filing Compliance Procedures.** For taxpayers whose failure to file was **non-willful**, the streamlined program lets you file the last **3 years of amended returns** and **6 years of FBARs**. For eligible taxpayers living **outside** the U.S. (the "Streamlined Foreign Offshore" track), the miscellaneous offshore penalty is **waived entirely** ([IRS](https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures)).
• **Delinquent FBAR submission procedures.** If you properly reported the income and paid the tax but simply missed the FBARs, you can e-file the late FBARs with a statement explaining why, and the IRS will not impose a penalty for those late filings in qualifying cases ([IRS](https://www.irs.gov/individuals/international-taxpayers/delinquent-fbar-submission-procedures)).

The critical point: these programs require that you come forward **before** the IRS contacts you about the issue. Once an examination begins, the favorable terms generally close.

Practical takeaways

1. **Total your peak balances, not your year-end balances.** Pull the highest balance each foreign account hit during the year, convert to U.S. dollars using the Treasury year-end rate, and add them up. Over $10,000 combined? You owe an FBAR.
2. **File the FBAR separately and electronically.** It goes through FinCEN's BSA E-Filing System, not with your 1040. Calendar it alongside your return, and use the automatic October 15 extension if you need time.
3. **Check the Form 8938 thresholds against your status.** Living-abroad filers don't report until $200,000 (single) or $400,000 (joint) — but include foreign stock, pensions, and entity interests, not just bank accounts.
4. **Expect to report some accounts twice.** Filing Form 8938 never substitutes for the FBAR. Keep one master list of accounts and feed it to both forms.
5. **Don't forget signature-authority accounts.** Business, club, or family accounts you can sign on may be reportable even if the money isn't yours.
6. **If you're behind, use a relief program now.** Streamlined Foreign Offshore can erase penalties for non-willful filers — but only if you act before the IRS reaches out.
7. **Keep records for 6 years.** That matches the FBAR's six-year statute of limitations and the streamlined program's six-year FBAR lookback.

Next steps

Start by making a single, dated list of every foreign account and asset you hold, with each one's highest balance during the year. That list answers both the FBAR and Form 8938 questions at once and tells you immediately which filings — if any — you owe. If the list reveals missed years, read the IRS pages on the Streamlined Filing Compliance Procedures and Delinquent FBAR submission procedures before doing anything else, and consider a cross-border tax professional for willfulness questions, which carry the heaviest penalties. The forms are tedious; the penalties for skipping them are not. For Americans abroad, the cheapest tax move most years is simply filing the paperwork on time.

*This article is general information, not tax or legal advice. Rules and inflation-adjusted figures change; verify current thresholds and penalties on IRS.gov or with a qualified cross-border tax advisor before filing.*