What Counts as “Reporting” in the U.S.?
When U.S. persons have foreign financial assets or interact with foreign trusts, multiple reporting regimes can apply:
- FBAR (FinCEN Form 114): Annual report of foreign bank and financial accounts. Due April 15 with an automatic extension to Oct 15—no request needed.
- Form 8938 (FATCA): Filed with the tax return to report specified foreign financial assets above thresholds (vary by filing status and whether you live in the U.S. or abroad).
- Forms 3520/3520-A: Reporting for certain transactions with foreign trusts, ownership of foreign trusts, and receipt of certain foreign gifts (3520), and the annual information return of a foreign trust with a U.S. owner (3520-A).
FBAR vs. Form 8938 (FATCA)—They Are Different
FBAR is filed electronically with FinCEN; Form 8938 is filed with the IRS as part of your tax return. Thresholds and what counts as a “financial account/asset” differ; some taxpayers must file both. Penalties for Form 8938 non-compliance start at $10,000, with higher amounts for continued failure and potential 40% underpayment penalties for undisclosed assets.
Foreign Trusts: When Do 3520/3520-A Apply?
- Form 3520-A: generally filed annually by a foreign trust with a U.S. owner to report the trust, U.S. beneficiaries, and income.
- Form 3520: filed by U.S. persons to report certain transactions with foreign trusts (including transfers) or receipt of certain foreign gifts.
The IRS maintains detailed instructions and definitions—review them each year because rules and thresholds can change.
A Clean Workflow for Families with Cross-Border Assets
- Inventory all foreign accounts, entities, and trusts (who owns what; signatory vs. beneficial interest).
- Map filings: FBAR, 8938, 3520/3520-A—note deadlines and responsible parties.
- Coordinate with banks and trustees to obtain year-end statements and trust accounting.
- Align advisors (U.S. CPA, foreign accountant, counsel, trustee).
- Calendar recurring due dates (FBAR Apr 15/Oct 15; tax return deadlines; trust reporting).
Practical FAQs
Do I file FBAR and 8938 for the same accounts?
Often yes—different forms, different agencies. It depends on your facts and thresholds.
What if a foreign trust has a U.S. owner?
The trust generally files 3520-A; the owner may have 3520 reporting too.
What are the 8938 thresholds?
They vary by filing status and residency (U.S. vs. abroad). See current IRS tables and instructions.
Are penalties significant?
Yes—Form 8938 penalties start at $10,000 and can escalate; other regimes also carry penalties.
