FBAR vs FATCA: Differences & Do You Need Both?

FBAR and FATCA are frequently confused because both can involve foreign financial assets, but they are separate reporting systems with different definitions, filing tests, and filing methods. But they are separate reporting systems — one, both, or neither can apply depending on your accounts, assets, filing status, residence, and the applicable thresholds and definitions.

FBAR (Foreign Bank Account Report) is a report you file with the U.S. Treasury's FinCEN to disclose reportable foreign financial accounts.

FATCA (the Foreign Account Tax Compliance Act) requires reporting specified foreign financial assets to the IRS on Form 8938 as part of your tax return.

Where to get the full comparison

For the side-by-side filing tests, thresholds, deadlines, penalties, and the "do you need both?" decision map, see the FBAR vs Form 8938 comparison. That comparison page is the canonical owner of the detailed differences between the two systems; this article is a short orientation that points you there.

What Each One Covers

The two reports do not cover the same assets:

FBAR Covers:

• Reportable foreign bank accounts (checking, savings)
• Reportable foreign securities/brokerage accounts
• Other reportable foreign financial accounts, subject to the account definition and applicable exceptions
• Accounts where you have signature or other authority (not just ownership)

FATCA (Form 8938) Can Cover:

• Foreign financial accounts that meet the specified-foreign-financial-asset rules
• Certain stock or securities issued by non-U.S. persons
• Certain interests in foreign entities, including foreign partnerships
• Certain interests in foreign trusts or estates
• Certain foreign-issued financial instruments and contracts
• Certain cash-value foreign life-insurance or annuity contracts

Whether a particular asset is reportable depends on the statutory definition, how the asset is held, applicable exceptions or duplicative-reporting rules, the taxpayer's interest, and the filing threshold.

Items Generally Outside These Particular Reporting Regimes

• Directly held foreign real estate generally is not itself a specified foreign financial asset for Form 8938 and is not a financial account for FBAR purposes. An interest in a foreign entity that owns the real estate is a separate analysis.
• Tangible personal property held directly for personal use generally is not itself within these particular financial-account/financial-asset reporting regimes.
• Physical foreign currency held directly as cash is not itself a foreign financial account merely because the currency is foreign.

These statements concern FBAR and Form 8938 only. Other income-tax or information-reporting rules can still apply.

Whether an account or asset is reportable on one, both, or neither form depends on the definitions, thresholds, exceptions, and the year at issue — not on the local label or a country-wide rule.

Common Mistakes

Filing one and thinking you're covered for both. Someone files their FBAR diligently every year but has never attached Form 8938 to their tax return — or vice versa. They are separate filings with separate authorities.

Conflating the filing tests. The FBAR's $10,000 threshold is an aggregate maximum-value test for reportable foreign financial accounts. Form 8938 uses separate specified-foreign-financial-asset rules and reporting thresholds. Whether an item is a specified foreign financial asset depends on the asset and how it is held; the applicable reporting threshold depends principally on filing status, qualifying foreign residence, and the relevant values during and at the end of the tax year. They are not one static table.

Forgetting the FBAR is filed separately. Your preparer files Form 8938 as part of your return. The FBAR must be filed separately through FinCEN's BSA E-Filing System. No one files it for you unless you explicitly ask.

What Happens If You Haven't Filed?

If prior FBAR or Form 8938 filings are missing, the Streamlined Filing Compliance Procedures may be one correction path to evaluate when the taxpayer satisfies the applicable eligibility requirements, including the required non-willfulness certification. A qualifying submission uses the tax-return and FBAR lookback periods specified in the current procedures. Do not select Streamlined solely because one or both forms are missing.

The IRS describes specified penalty treatment for a complete, eligible submission, but tax and interest may remain due and the procedure is not appropriate for every fact pattern. Review current IRS instructions and obtain qualified advice when willfulness, an examination, or uncertainty is involved.

For more details, read our guide on what to do if you haven't filed in years.

The Bottom Line

FBAR and FATCA are two separate requirements that happen to cover similar ground. The FBAR focuses on reportable foreign financial accounts and uses a $10,000 aggregate maximum-value test. Form 8938 covers specified foreign financial assets and uses separate reporting thresholds. Form 8938 is filed with the income-tax return; the FBAR is filed separately with FinCEN.

Some Americans abroad need both filings, while others need only one or neither. The filing itself is separate for each form; the hard part is applying the right threshold and asset rules to the facts. For the detailed comparison, see the FBAR vs Form 8938 comparison.

Not sure where you stand? I handle both filings as part of my FATCA compliance service and FBAR filing service. Start your intake and I'll review the accounts, assets, filing years, and prior filings to identify which reporting questions need to be resolved.

Official IRS and FinCEN sources

• IRS comparison of Form 8938 and FBAR requirements
• IRS summary of FATCA reporting thresholds
• FinCEN purpose of the FBAR
• IRS — Instructions for Form 8938
• IRS — FBAR guidance
• FinCEN — Report Foreign Bank and Financial Accounts
• IRS — Streamlined Filing Compliance Procedures

Organize your CD and account records

• Which account number belongs on the FBAR for a foreign CD?
• Foreign account records to prepare before a tax consultation
• Forgot a foreign CD? Check the FBAR and tax return together

Build a free FBAR workpaper to turn the account list into an organized, downloadable handoff.