Form 8938 and FBAR are two different reporting requirements that U.S. taxpayers must comply with to report their foreign financial accounts.
The main differences between Form 8938 and FBAR are as follows: Reporting threshold: The reporting threshold for Form 8938 is higher than that for FBAR. For Form 8938, U.S. taxpayers must file if the total value of their specified foreign financial assets exceeds $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. In contrast, for FBAR, U.S. taxpayers must file if the total value of their foreign financial accounts exceeds $10,000 at any time during the calendar year.
Types of accounts reported: Form 8938 requires U.S. taxpayers to report a broader range of foreign financial assets than FBAR. Form 8938 requires reporting of foreign bank accounts, foreign mutual funds, foreign stocks and securities, and certain foreign retirement plans, among others. In contrast, FBAR only requires reporting of foreign financial accounts, including bank accounts, securities accounts, and certain types of insurance policies.
Filing requirements: Form 8938 is filed with the taxpayer's federal income tax return, whereas FBAR is filed separately with the Financial Crimes Enforcement Network (FinCEN). Additionally, the deadline for filing Form 8938 is the same as the taxpayer's income tax return, whereas the deadline for FBAR is April 15th, with a six-month extension available.
Penalties for non-compliance: The penalties for non-compliance with Form 8938 and FBAR are different. Failure to file Form 8938 can result in a penalty of up to $10,000, with additional penalties of up to $50,000 for continued non-compliance after IRS notification. In contrast, the penalties for FBAR can be much more severe, with a penalty of up to $10,000 per violation for non-willful violations, and penalties of up to 50% of the account balance per violation for willful violations.
In summary, while both Form 8938 and FBAR require U.S. taxpayers to report their foreign financial accounts, the reporting thresholds, types of accounts reported, filing requirements, and penalties for non-compliance differ between the two.