The FBAR and FATCA Blueprint
You have a bank account in Dubai, a brokerage account in Singapore, and a U.S. LLC that holds a euro account for supplier payments. Someone has told you that you need to file "the FBAR and the FATCA form." Those are two separate obligations, created by two different statutes, administered under two different titles of federal law, with different filing triggers and unrelated penalty structures. Conflating them is how years get missed.
Two statutes, not one regime
FBAR is a Bank Secrecy Act obligation. The authority is 31 U.S.C. §5314, implemented by 31 CFR 1010.350, and the report is FinCEN Form 114, filed electronically through the BSA E-Filing System. It is Title 31. It is not a tax return, it is not attached to a tax return, and the IRS administers it under a delegation from FinCEN rather than under the Internal Revenue Code.
Form 8938 is a tax obligation. The authority is IRC §6038D, enacted as part of the Foreign Account Tax Compliance Act. It is Title 26. It is filed with the income tax return, and it lives or dies with that return.
The practical result is that the two forms ask overlapping but non-identical questions, and filing one does not satisfy the other. An account can be reportable on both, on one, or on neither.
The comparison, side by side
| FBAR (FinCEN Form 114) | Form 8938 | |
|---|---|---|
| Authority | 31 U.S.C. §5314; 31 CFR 1010.350 | IRC §6038D |
| Who files | U.S. persons: citizens, residents, and entities created, organized, or formed under U.S. or State law | Specified individuals and specified domestic entities |
| Threshold | Aggregate value of foreign financial accounts exceeds $10,000 at any time in the calendar year | Varies by filing status and residence. See below. |
| What is reported | Foreign financial accounts, including accounts over which you hold signature authority only | Specified foreign financial assets, including accounts and non-account assets such as foreign stock and securities held outside an account, foreign partnership interests, and certain foreign insurance and annuity contracts with cash value |
| Deadline | April 15, with an automatic extension to October 15 that requires no request | The due date of the income tax return, including extensions |
| Where filed | FinCEN BSA E-Filing System | Attached to the income tax return |
| Non-willful penalty | Statutory maximum $10,000, inflation-adjusted, per annual report | $10,000, with continuation penalties |
The Form 8938 thresholds are the part most often misremembered. For a specified individual living in the United States: $50,000 on the last day of the year or $75,000 at any time during the year for single and married filing separately, and $100,000 or $150,000 for married filing jointly. For a specified individual living abroad: $200,000 or $300,000 for single and married filing separately, and $400,000 or $600,000 for married filing jointly. For specified domestic entities: $50,000 or $75,000.
Set those against the FBAR figure. FBAR triggers at $10,000 aggregate, at any moment in the year, with no filing status variation and no residence variation. It is by a wide margin the easier threshold to cross. A single account that peaked at $11,000 in March and closed in April is reportable.
Who counts as a U.S. person, and why your LLC probably does
This is the point that catches non-resident founders, and it catches them through their entity rather than through themselves.
31 CFR 1010.350(b) defines a United States person to include an entity created, organized, or formed under the laws of the United States, any State, the District of Columbia, the Territories and Insular Possessions of the United States, or the Indian Tribes. There is no carve-out for entities owned by foreign persons, and no carve-out for entities disregarded for federal income tax purposes. IRM 4.26.16 states the point directly: single-member limited liability companies are disregarded for federal tax purposes but would have to report foreign accounts if the requirement is otherwise met.
So a Wyoming LLC owned by one non-resident member, holding a foreign bank account that touched $10,001 during the year, is a U.S. person with an FBAR obligation in its own name. The owner may have no personal U.S. filing obligation at all. The entity still does.
The attribution rule extends this further. Under 31 CFR 1010.350(e)(2), a U.S. person has a financial interest in accounts held by an entity in which that person owns, directly or indirectly, more than 50 percent of the voting power or total value of the shares, or a comparable interest in a non-corporate entity. Accounts held one tier down can be reportable at the level above.
Form 8938 works differently. It applies to specified individuals, which turns on U.S. tax residence, and to specified domestic entities. A non-resident alien with no U.S. return generally has no §6038D obligation. The two regimes diverge precisely here, and assuming symmetry between them produces the wrong answer in both directions.
What the FBAR penalty actually is, after Bittner
31 U.S.C. §5321(a)(5)(B)(i) sets the maximum non-willful penalty at $10,000. That figure is adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act, and the adjusted amounts are published in the table at 31 CFR 1010.821. The current figure is meaningfully higher than $10,000 and should be read from that table for the year in which the penalty is assessed, not from the statute.
The unit of the penalty is the point that changed. In Bittner v. United States, 598 U.S. 85 (2023), the Supreme Court held that the non-willful penalty accrues per annual report, not per account. IRM 4.26.16 reflects this.
The arithmetic difference is not marginal. Take a taxpayer with twelve unreported foreign accounts across five years (illustrative). Under a per-account reading, the exposure is computed across sixty account-years. Under Bittner, the non-willful penalty attaches to five annual reports.
Two qualifications belong with that. First, 31 U.S.C. §5321(a)(5)(B)(ii) provides that no penalty is imposed where the violation was due to reasonable cause and the balance in the account was properly reported. Second, Bittner addressed non-willful violations. The willful penalty under §5321(a)(5)(C) and (D) is the greater of $100,000, inflation-adjusted, or 50 percent of the balance in the account at the time of the violation, and the IRM continues to treat willful penalties as assessed per account. The gap between the two categories is very large, and willfulness is a factual determination.
Form 8938 penalties, and the accuracy penalty behind them
IRC §6038D(d) imposes $10,000 for a failure to furnish the required information. If the failure continues more than 90 days after the IRS mails notice of it, an additional $10,000 applies for each 30-day period, capped at $50,000 of continuation penalty. The combined ceiling is $60,000 per year, before considering criminal exposure.
Behind that sits IRC §6662(j), which imposes a 40 percent accuracy-related penalty on an understatement attributable to an undisclosed foreign financial asset. A missing Form 8938 is therefore not only a $10,000 problem. It changes the penalty rate on the underlying tax if income from the asset was also omitted.
The limitations period is the part people miss
IRC §6501(c)(8) provides that where information required under a listed section, including §6038D, is not furnished, the period for assessment does not expire before three years after the date the Secretary is furnished the required information. It suspends the clock. It does not abolish the limitations period, and it does not create a permanent open year in the abstract. Where the failure was due to reasonable cause and not willful neglect, the extension is limited to the item or items related to the failure.
Separately, IRC §6501(e)(1)(A)(ii) provides a six-year assessment period where the return omits more than $5,000 of income attributable to an asset reportable under §6038D.
FBAR has its own clock, in its own title. 31 U.S.C. §5321(b)(1) permits assessment of a civil penalty at any time before the end of the six-year period beginning on the date of the transaction. It is not affected by anything you file or fail to file under the Internal Revenue Code.
If a year is already missing
There are established administrative paths for delinquent and inaccurate filings, and which one fits depends on facts that are specific to the taxpayer: whether tax was owed, whether income was reported, whether the taxpayer resides abroad, and whether the conduct was non-willful. Those programs have eligibility conditions and their terms have been revised over time. The determination of which route applies, or whether any does, is made on the record rather than from a general description, and it should be made before anything is filed, because a filing made into the wrong channel is difficult to unwind.
What is worth saying generally is that the exposure is bounded by the rules above rather than open-ended, and that the reasonable cause provision in §5321(a)(5)(B)(ii) is written into the statute.
What to do next
Build the account inventory first, because both regimes depend on it and neither can be assessed without it. For each account: the institution, the country, the account number, the type, the maximum value at any point during the year, whose name it is in, and who has signature authority. Do that for every entity in the group as well as for yourself, and do it for each of the last six years. Then apply the two thresholds separately rather than together.
The two most common structural findings are an entity-level FBAR obligation nobody assigned to anyone, and a Form 8938 that was never considered because the accounts sat below the FBAR-sized figure the founder had in mind. Both are visible from a complete inventory and invisible without one.
This article is general information about how the two regimes are constructed and is not advice on a specific filing history. The firm's diagnostic begins with that six-year account inventory. Related material sits on the IRS exposure analysis pillar.