FBAR vs Form 8938: who files which, and how do they differ?

The FBAR and Form 8938 are the two big foreign-asset disclosures in US tax practice, and they are constantly confused. They overlap enough to look redundant and differ enough to trap a careful preparer: a client can owe one, the other, both, or neither — and filing one never discharges the other. The FBAR — FinCEN Form 114 — is a Title 31 Bank Secrecy Act report of foreign financial accounts, filed with FinCEN. Form 8938 is a Title 26 income-tax statement of specified foreign financial assets under §6038D, attached to the return and filed with the IRS.

This guide sets them side by side: who files each, the very different thresholds, what each one reaches, why signature authority and entity interests pull them apart, and why so many clients file both. It works the determination question — does an obligation exist, for this person, for this year — that precedes preparing either form.

In plain terms these are two separate filings, to two separate agencies, under two separate bodies of law — and one does not cover for the other. The FBAR asks a narrow question (foreign accounts over $10,000, counting accounts you merely sign on); Form 8938 asks a broader one (foreign assets you own, over a much higher, status-based dollar line). Most clients with meaningful offshore holdings file both; a few assets show up on only one. PILOT determines which of the two — if either — each client must file, from their facts.

At a glance: the two regimes side by side

A row-by-row comparison; the drill-down sections below work each line.

Sources: IRS, Comparison of Form 8938 and FBAR Requirements; 31 U.S.C. §5314 and 31 CFR §1010.350; §6038D and the Form 8938 Instructions.

Who files each — "US person" versus "specified person"

The two regimes draw the filer net differently, and the differences are not cosmetic.

FBAR: any US person (and a US disregarded entity files its own)

The FBAR's authority is a Bank Secrecy Act mandate, not an income-tax one:

the Secretary of the Treasury shall require a resident or citizen of the United States or a person in, and doing business in, the United States, to keep records, file reports, or keep records and file reports, when the resident, citizen, or person makes a transaction or maintains a relation for any person with a foreign financial agency.

— 31 U.S.C. §5314(a)

A US person, for this purpose, is a US citizen or resident and any entity — corporation, partnership, trust, LLC, or estate — created or organized in the United States (31 CFR §1010.350(b)). Because the FBAR lives in Title 31, federal income-tax classification is irrelevant to whether the entity itself files:

The federal tax treatment of an entity doesn't affect the entity's requirement to file an FBAR. FBARs are required under a Bank Secrecy Act provision of Title 31, not under any provision of Title 26 (Internal Revenue Code).

— IRS Pub 5569, FBAR Reference Guide

So a single-member US LLC that is disregarded for income tax — invisible on Form 8938, where its assets are simply its owner's — is nonetheless its own FBAR filer if it holds foreign accounts over the threshold. That is one of the cleanest places the two regimes part company.

FBAR: signature or other authority, even with no ownership

The FBAR's filer net is wider in a second way. A US person files not only for accounts they have a financial interest in, but also for any account over which they have signature or other authority — the authority to control the disposition of the account's assets by direct communication with the institution — whether or not that authority has ever been exercised. A corporate treasurer, a foundation officer, a family-office controller, or someone holding a power of attorney over a relative's foreign account can have an FBAR obligation while owning none of the money. Form 8938 has no signature-authority concept; it reaches only assets the specified person actually owns. (See Signature authority, below.)

Form 8938: a "specified person," ownership only

Form 8938's mandate, by contrast, attaches the disclosure to the income-tax return:

Any individual who, during any taxable year, holds any interest in a specified foreign financial asset shall attach to such person's return of tax imposed by subtitle A for such taxable year the information described in subsection (c) with respect to each such asset if the aggregate value of all such assets exceeds $50,000 (or such higher dollar amount as the Secretary may prescribe).

— IRC §6038D(a)

The filer is a specified person:

• a specified individual — a US citizen; a resident alien for any part of the year; a nonresident alien who elects to be treated as a resident in order to file jointly; or a bona fide resident of Puerto Rico or a §931 possession; and
• a specified domestic entity — a closely held domestic corporation or partnership that is at least 50% passive (by income or assets), or a domestic trust with a specified-person beneficiary, that is formed or availed of to hold specified foreign financial assets (Reg §1.6038D-6; for tax years beginning after 2015).

The specified-domestic-entity rules are deliberately narrow — most ordinary operating US corporations are not caught; the target is passive holding vehicles. And §6038D(a) speaks of an "individual"; entities are pulled in only through that narrow §6038D(f) / Reg §1.6038D-6 route. Unlike the FBAR, there is no "authority" filer at all: Form 8938 is ownership only.

In plain terms the FBAR sweeps in more people: any US person, including a disregarded LLC filing for itself, and anyone who can merely sign on a foreign account. Form 8938 reaches a narrower set of filers — specified individuals and a tightly defined class of passive domestic holding entities — and only for assets they actually own.

The thresholds — $10,000 flat versus $50,000–$600,000 tiered

This is the difference that most often decides "FBAR yes, 8938 no."

FBAR: $10,000 aggregate, any time in the calendar year

One number, for everyone: if the aggregate maximum value of all the person's foreign financial accounts tops $10,000 at any time during the calendar year, the FBAR is due. It is not per account, and it does not change with filing status or where the person lives. A single day over $10,000 across all accounts combined is enough.

Example — FBAR yes, 8938 no. USP A, single and living in the US, holds two foreign bank accounts that together peak at about $40,000 during the year. A is over the $10,000 FBAR line, so the FBAR is due. But A's specified foreign financial assets are well under the $50,000 year-end / $75,000 any-time Form 8938 threshold for a single US-resident filer, so no Form 8938. The $40,000 client is the textbook "FBAR only" case.

Form 8938: tiered by filing status and where you live

Form 8938's thresholds are statutory, far higher, and vary on two axes — filing status and US-versus-abroad residence:

(Specified domestic entities: $50,000 year-end / $75,000 any time.) "Living abroad" means meeting a bona fide residence or physical presence test for the year — and it raises the bar sharply.

Example — living abroad lifts the 8938 bar. USP B is a US citizen living and working in Germany all year (a bona fide foreign resident), single, with foreign assets peaking around $180,000. The FBAR is plainly due (well over $10,000). But B's abroad threshold is $200,000 year-end / $300,000 any-time, so B may have no Form 8938 obligation despite sizable holdings — where an identical client living in the US (a $50,000 threshold) clearly would. Same assets, opposite answer, driven entirely by residence.

In plain terms the FBAR's $10,000 line is low and flat; almost anyone with a real foreign account crosses it. Form 8938's line is high and depends on status and where you live — from $50,000 up to $600,000. So the common pattern is a client who owes the FBAR but not Form 8938. Each turns on a single yes/no threshold — which is exactly how PILOT asks it, never for the figure itself, only whether the total is over the line.

What's covered — accounts versus a broader set of assets

The filer nets differ; so does the subject matter.

• The FBAR reaches foreign financial accounts — bank, securities, and similar accounts (including foreign mutual funds and cash-value foreign insurance or annuity policies) maintained at an institution located outside the United States. It is the location of the account, not the nationality of the institution, that controls: an account at the foreign branch of a US bank is foreign (reportable); an account at the US branch of a foreign bank is not.
• Form 8938 reaches specified foreign financial assets (SFFAs) — a broader category: foreign financial accounts plus, when held for investment and not inside a financial account, foreign stock or securities, any interest in a foreign entity, and foreign financial instruments or contracts.

FBAR-only, 8938-only, and both — a matrix

The IRS's own side-by-side makes the split concrete. Common holdings:

Two boundaries do most of the work. Non-account ownership interests — foreign stock not in an account, and interests in foreign entities including hedge and private equity funds — are 8938-only, because they are not "accounts." And signature authority and the foreign branch of a US bank are FBAR-only.

Example — 8938 yes, FBAR no (the key 8938-only case). USP C, in the US, owns a $300,000 interest in a foreign private equity fund, held directly rather than through a foreign brokerage account. A fund interest is not an account, so it is not FBAR-reportable. But it is an interest in a foreign entity — a specified foreign financial asset — and C is over the $50,000 threshold, so Form 8938 is required. The hedge-fund / PE interest is the classic asset Form 8938 catches and the FBAR misses.

Example — foreign pension; treaties don't matter. USP D, a US citizen, holds a foreign employer pension and a foreign retirement account. Foreign retirement accounts are generally FBAR-reportable, and a tax treaty that defers the income does not change that — "Tax treaties with the U.S. do not affect FBAR filing obligations" (Pub 5569). The same holdings are typically specified foreign financial assets for Form 8938 as well, once D is over the threshold. (Certain foreign social-security-type government benefits sit outside both — a fact-specific question.)

In plain terms if it's an account, it is usually on the FBAR (and often on Form 8938 too). If it is something you own that isn't an account — foreign stock in a drawer, a stake in a foreign fund or company — it's an 8938 question, not an FBAR one. Directly held real estate, currency, and gold are on neither.

Signature authority — the big FBAR-only bucket (and its exceptions)

Signature authority earns its own treatment because it is where well-advised clients most often under-file. A US person with the authority to control a foreign account "by direct communication" to the institution must report it on the FBAR even with no financial stake — and it does not matter whether the authority was ever used.

Example — signature-authority-only treasurer (the key FBAR-only case). USP E is the US-based treasurer of a company and can sign on its €2 million foreign operating account but owns none of it. E has an FBAR obligation for that account (signature authority) and no Form 8938 obligation (E owns nothing reportable on E's own return). The employer files for the account too; E's personal FBAR is separate.

The regulation carves out several officer-and-employee situations in which the individual need not personally report employer accounts they only sign on — for example, officers or employees of a bank examined by a federal regulator, of an SEC- or CFTC-registered financial institution, or of a US-listed company (and its consolidated US subsidiary) — provided they have no financial interest in the account (31 CFR §1010.350(f)(2)). These are employer-specific and fact-dependent, and the entity still files. Outside those carve-outs, signature authority is a live FBAR trigger.

You usually file both — and the §1.6038D-7 duplicative-reporting rule

For a client with a substantial foreign account, the common answer is both. The same foreign brokerage account is a financial account for the FBAR and a specified foreign financial asset for Form 8938, and being over both thresholds means both filings.

Example — one large account, both forms. USP F, single and in the US, holds a single foreign brokerage account that peaks at $250,000. It is over the $10,000 FBAR line and the $50,000 Form 8938 line, and it is reportable under both regimes. F files the FBAR with FinCEN and Form 8938 with the return — two filings, one account, same year.

Filing both does not mean detailing everything twice on the 8938. Under Reg §1.6038D-7(a), a specified person who reports an asset on certain other information returns — Form 5471, 8621, 8865, 3520, or 3520-A — does not re-list that asset's detail on Form 8938; instead they report on Form 8938, Part IV how many of those other forms were filed. Three cautions:

• Form 8938 itself is still filed — the rule trims duplicate detail, not the form.
• A specified individual still counts the value of the other-form asset toward the Form 8938 threshold (a specified domestic entity excludes it).
• The rule is a Title 26 coordination only. It has no effect on the FBAR, which is filed independently regardless of what income-tax forms report the same account.

The exception only bites when one of those other forms actually exists. A specified foreign financial asset that is not caught by a Form 5471, 8621, 8865, 3520, or 3520-A is reported in full on Form 8938 itself — the Part IV shortcut has nothing to point to.

Example — foreign-corp stock with no other form (the commonly-missed 8938-only case). USP G, single and in the US, owns a 5% stake in an ordinary foreign operating company, held directly (a registered shareholding, not through a foreign brokerage account). The company is not a CFC (US owners don't control it) and not a PFIC (it's an active business), so G files no Form 5471 and no Form 8621 — and many stop there, assuming nothing is reportable. But the stock is itself a specified foreign financial asset, and together with G's other foreign assets it pushes the total over the $50,000 line, so it is reported on Form 8938 itself — in full, in Parts II/VI, not via the Part IV shortcut. It is not FBAR-reportable (a direct shareholding is not an account).

In plain terms the FBAR and Form 8938 are not an either/or — for a sizable foreign account you generally file both. The only "don't report it twice" rule lives inside Form 8938: if a foreign asset is already on a Form 5471 / 8621 / 8865 / 3520, you point to that on Part IV instead of repeating it — but you still file Form 8938, and the FBAR remains entirely separate. And when an asset is on none of those other forms — a plain stake in a foreign company that is neither a CFC nor a PFIC — it goes straight onto Form 8938 in full.

Filing mechanics and deadlines

• FBAR — filed electronically with FinCEN through the BSA E-Filing System, not with the tax return. Due April 15, with an automatic extension to October 15 (no request needed). It is always a calendar-year report, even for a filer with a fiscal tax year. Spouses can use FinCEN Form 114a to let one spouse e-file for both when all accounts are jointly held.
• Form 8938 — attached to the income-tax return (Form 1040, 1120, 1065, and the like) and filed with the IRS, on the return's due date including extensions. It follows the taxpayer's tax year.

The split filing channels are themselves a trap: extending the income-tax return extends Form 8938 but says nothing about the FBAR, which runs on its own (already-automatic) October 15 track with FinCEN.

Penalties

Both regimes carry steep penalties, structured differently.

• FBAR (31 U.S.C. §5321; figures inflation-adjusted by 31 CFR §1010.821). Non-willful: up to $16,536 per violation, with a reasonable-cause defense; the cap is per FBAR report, not per account (Bittner v. United States, 598 U.S. 85 (2023)). Willful: the greater of $165,353 or 50% of the account balance at the time of the violation, with no reasonable-cause defense. Criminal penalties are possible for willful violations.
• Form 8938 (§6038D(d); §6662(j); §6501). A $10,000 failure-to-file penalty, plus $10,000 for each 30-day period after the IRS mails notice (beginning 90 days after), capped at $50,000 of additional penalty — a $60,000 maximum. A 40% accuracy-related penalty applies to any underpayment tied to an undisclosed SFFA, and the statute of limitations can stay open — for the items the missing information relates to, and potentially the whole return — until that information is furnished (§6501(c)(8)), extending to six years for substantial SFFA-related omissions (§6501(e)).

Currency notes

• FBAR penalty figures are inflation-adjusted every January under 31 CFR §1010.821. The current maxima — $16,536 (non-willful) and $165,353 (the willful fixed base) — took effect January 17, 2025. The 2026 annual adjustment was cancelled (the appropriations lapse left the agency without October 2025 CPI data, and OMB directed agencies to keep the 2025 amounts), so these figures remain current for 2026. The adjustment touches only the willful penalty's fixed $100,000 base; the alternative 50%-of-balance prong is not indexed.
• Form 8938's §6038D penalties are flat statutory dollar amounts ($10,000 / $50,000 / 40%) — not inflation-indexed.
• The specified domestic entity rules (Reg §1.6038D-6) have applied only since tax years beginning after December 31, 2015; before that, only specified individuals filed Form 8938.

Catching up on missed years

A client who discovers unfiled FBARs or Forms 8938 for prior years should not simply back-file them silently. The IRS maintains structured catch-up paths — the Streamlined Filing Compliance Procedures for non-willful taxpayers, and the Delinquent FBAR Submission Procedures and Delinquent International Information Return Submission Procedures where income was otherwise properly reported — each with its own eligibility rules and consequences. Choosing among them, and assessing willfulness, is a specialist judgment that turns on facts well beyond a filing-obligation determination. Identify the gap, then route the client to a professional who handles offshore disclosures. (This sits outside what PILOT determines.)

Relationships to other regimes and forms

FBAR and Form 8938 rarely travel alone.

• Form 8621 (PFIC). A foreign mutual fund or pooled investment is often a passive foreign investment company, so the same holding can drive an FBAR account report, a Form 8938 asset, and a Form 8621. Form 8938's duplicative-reporting rule lets a Form 8621-reported interest be identified on Part IV rather than re-detailed — but the value still counts toward an individual's 8938 threshold, and the FBAR is separate. See Who must file Form 8621, and is the foreign company a PFIC?.
• Form 5471 / 8865 (foreign corporations and partnerships). An interest in a foreign corporation or partnership is a specified foreign financial asset for Form 8938. When the interest also triggers a Form 5471 or 8865, the two are coordinated through the §1.6038D-7 Part IV mechanic; when it does not — a minority stake in a foreign company that is neither a CFC nor a PFIC, say — the interest is reported directly on Form 8938 itself. The CFC and US-shareholder mechanics are worked in Who must file Form 5471, and what category applies?; the foreign-partnership rules are in Who must file Form 8865, and which category applies?.
• Forms 3520 / 3520-A (foreign trusts). Foreign-trust interests reported on these forms are likewise excepted from Form 8938 detail (Part IV), and a US grantor of a foreign trust can have an FBAR obligation for the trust's accounts. See Who must file Form 3520 or 3520-A, and what triggers each?.
• Entity classification comes first. Whether a foreign holding is "stock," a "partnership interest," or a disregarded entity's assets affects which income-tax forms apply — but not the FBAR's account question, which runs on Title 31 regardless of income-tax classification.

In plain terms the same offshore fund can land on an FBAR, a Form 8938, and a Form 8621 at once. The forms coordinate only inside the income-tax system — Form 8938 lets you point at a 5471 / 8621 / 8865 / 3520 instead of repeating detail — while the FBAR stands apart. Run them together for an engagement; PILOT determines, for each client, which of these forms is required and why.

What these forms are not

Neither form computes a tax. The FBAR is an informational Bank Secrecy Act report; Form 8938 is an informational FATCA statement. Whether the income from a foreign account or asset is taxed — and how a PFIC, a Subpart F or GILTI inclusion, or a foreign pension is actually computed — is separate downstream work. The first question, and the one this guide answers, is which of these two disclosures a client must file, for which holdings, and why.