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  • Home
  • About
    • Ronson J. Shamoun, ESQ., LL.M.
    • Chandara Diep, ESQ., LL.M.
    • Joseph Cole, ESQ., LL.M.
    • Devon J. Arabo, ESQ., LL.M.
    • Lauren Suarez, ESQ., LL.M.
    • Daniel Huynh, Esq., LL.M.
    • Christopher Engelmann, ESQ., LL.M.
    • Leslie Miranda, Esq., LL.M.
    • Brian M. Malloy, Esq.
    • Steve S. Mattia, Esq.
    • Sam Imandoust, ESQ., LL.M
    • Kaveh Imandoust, JD, MBT, CPA
    • Andrea Cisneros Valdez, Esq., LL.M.
    • Martin Schainbaum, ESQ., LL.M.
    • Dod Ghassemkhani, ESQ.
    • Vincent Renda, Esq.
    • Pedro Bernal, Esq.
    • Melanie M. Shamoun
    • Sandie Portilla
    • Renae Arabo
    • Sabri P. Shamoun
    • Hilary Dargavell
    • Lupita C. Torres
    • Jewell Cornejo
    • Kesia Belford
    • Remy Hogan
    • Judith Jeremie
    • Marley Smith-Peters
    • Melanie Chan
    • Tanner DeMera
    • Charles Ecker
    • Anna Gurr
    • Asia Smith
  • Practices
    • ERTC – Call Us Before It’s Too Late!
    • Tax
      • IRS TAX MATTERS
        • IRS Appeals
          • IRS Appeals Process
          • Contesting an IRS Levy
          • Why Retain RJS LAW for IRS Appeals
          • 4 Tips For Navigating The IRS Rapid Appeals Process
        • IRS AUDITS
          • IRS Correspondence Audits
          • What are IRS Field Audits?
          • Initial IRS Compliance Center Audits
          • IRS Office Audits
          • What happens in an IRS Audit?
          • Taxpayer Rights Under IRS Publication 1
          • IRS Warns Taxpayers About Scam
        • NOTICES
          • IRS Notices
          • IRS Letters
          • FTB Notices
          • Avisos en Español
        • IRS Collections
          • Avoiding and Eliminating IRS Tax Liens
          • Collection Due Process Hearing
          • CP 501 – IRS Notice
          • Failure to file a tax return: What happens?
          • How the IRS calculates interest
          • How to get a tax levy released
          • ACS – Automated Collection System
          • IRS Collections Process
          • IRS Interest Abatement
          • IRS Revenue Officers
          • Jeopardy Assessments and Jeopardy Levies
          • National Tax Agencies
          • RJS LAW Approach to Collections
          • IRS Statute of Limitations on Collections
          • Streamlined Installment Agreements
          • Tax Penalty Abatement
          • Taxpayer Assistance Orders
        • IRS Payroll Tax
          • Independent Contractor Reclassification Audits
          • IRS Forms 940 and 941
          • IRS Trust Fund Interviews
          • Payroll Tax Liability Payment Options
          • Trust Fund Recovery Penalties
        • IRS Wealth Squad
        • Offer in Compromise & Tax Settlements
          • OVERVIEW OF OFFER IN COMPROMISE PROCESS
          • The Offer in Compromise Process
          • Appealing an Offer in Compromise
          • How does the IRS evaluate an Offer in Compromise
          • Offer in Compromise and Dissipated Assets
          • Offer in Compromise Requirements
          • Pros and Cons of an Offer in Compromise
          • Why Choose RJS LAW?
          • Offer in Compromise Alternatives
          • Actual IRS Offer in Compromise Results
      • STATE TAX MATTERS
        • EDD California Payroll Tax Lawyer
          • EDD Investigations
          • EDD Collections – Liens, Levies, and Garnishments
        • CDTFA – California Sales Tax
          • California Sales Tax Appeals
          • California Sales Tax Audits
          • California Department Of Tax And Fee Administration – CDTFA
        • California State Tax Matters – California Franchise Tax Board | FTB | EDD
          • California Residency Audits
          • Discharging State Income Taxes in Bankruptcy
          • State Tax Practice – Outside of California
      • CRIMINAL TAX ISSUES
        • Criminal Investigation Division
        • IRS Criminal Investigation Division Tactics
        • Criminal Tax Defense – Tax Crimes
        • Currency Transaction Records & Suspicious Activity Reports
        • IRS Methods of Proof: Tax Fraud and Evasion
        • Methods IRS Agents Use to Locate Assets
        • IRS Special Agent Visits
        • Are You a Criminal Investigation Target?
        • Criminal Tax Attorney vs. White Collar Defense
      • CORPORATE TAXES
      • TAX COURT LITIGATION
      • Innocent Spouse Relief
    • International Tax
    • Estate Planning
    • Trust Litigation
    • Trust, Estate & Probate Litigation
    • Trust & Estate Administration
    • Probate
    • Bankruptcy
    • Civil Litigation
    • Criminal Defense
    • Accidents & Injury
    • Corporate & Transactional
    • Private Wealth Services
    • Real Estate Law
      • Landlord Tenant Law
    • Employment Law
  • Tax Institute
    • 8th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 28th, 2023
    • 7th Annual USD School of Law – RJS LAW Tax Controversy Institute – July 15th 2022
    • 6th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 5th Annual USD School of Law – RJS LAW Tax Controversy Institute
    • 4th Annual USD School of Law – RJS LAW Tax Controversy Institute
  • Testimonials
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    • RJS Law Donates Billboard to the Girl Scouts
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Internal Revenue Service Form 8938

An Important International Tax Form to Declare Foreign Financial Assets

May be filed through the IRS Streamlined Procedures

Form 8938

What is it Internal Revenue Form 8938?

Form 8938 is used to report specified foreign financial assets when the overall value of the those specified foreign financial assets is over the appropriate reporting thresholds. The form requires US citizens who reside within or outside of the United States and have foreign financial assets with specified values to report that information to the Internal Revenue Service (IRS).

Specified foreign financial assets may include bank accounts, stocks, securities, a swap or similar agreement with a foreign counterparty, a partnership interest, an interest in a foreign-issued insurance contract or an annuity with cash-surrender value, among others.

Form 8938 is frequently omitted from a tax return. If you missed filing Form FinCEN 114,  commonly known as an FBAR for Foreign Bank Account Reporting, you may have also missed filing the Form 8938.  However, for those who did not timely file a Form 8938, non-willful failure to file Form 8938 may be corrected filing through the Streamlined Procedures.

How And When to File

The deadline to report is the same as your income tax returns, generally April 15th. Form 8938 when required, must be attached to the taxpayer’s tax return for the year.

What are the Specified Values or Thresholds for Reporting?[1]

Determining when a taxpayer must file form 8938 depends on the aggregate of the taxpayer’s foreign financial assets held during the tax year. The following situations will require an individual to file[2]:

  • A specified individual living in the United States filing as an unmarried individual or a specified married individual filing separately with specified foreign financial assets valued at or over $50,000 on the final day of the tax year, or over $75,000 at any point during the year.
  • Specified individuals living in the United States who are married filing jointly with a total specified foreign financial assets over $100,000 on the final day of the tax year, or over $150,000 at any point during the year.
  • A specified individual living outside of the United States filing as an unmarried individual or a specified married individual filing separately with total specified foreign financial assets value of assets over $200,000 on the final day of the year, or over $300,000 at any point during the year.
  • Specified individuals living outside of the United States who are married filing jointly with total specified foreign financial assets over $400,000 on the final day of the tax year, or more than $600,000 at any point during the year.

What are the Differences Between Form 8938 and an FBAR (FinCEN Form 114)?

There are several! 

While this is not an exhaustive list, one primary difference is the FBAR is not filed with the IRS. The FBAR is filed with the Financial Crimes Enforcement Network (FinCEN), which is a law enforcement agency within the Department of the Treasury and separate from the IRS. Another is the disclosure thresholds for Form 8938 are higher than those of the FBAR. FBARs are filed when having a foreign bank account, while Form 8938 is broader and includes having foreign financial assets. In addition, applicable penalties are different!

What are the Form 8938 Penalties?

Failure to file a complete and correct Form 8938 timely,  may subject you to a penalty of $10,000. There may be an additional $10,000 penalty for each 30 days period of non-filing after receipt of the IRS Notice of Failure to Disclose, with a maximum penalty of $50,000. In some cases, certain criminal penalties may also apply. Also, underpayment of  tax  involving an undisclosed specified foreign financial asset,  may trigger  a penalty equal to 40% of that underpayment. Penalties for fraud may apply with a penalty of 75% of the underpayment due to fraud will apply.

Questions

Form 8938 can be difficult to properly prepare, compile and report. RLS LAW and its qualified attorneys are available to assist in completing the form as well as with other reporting or filing issues and delinquencies. Please call RJS LAW for a free consultation and assessment at 619-595-1655. You may also contact us via the web at www.RJSLawFirm.com. We look forward to hearing from you.


[1] Many factors are used in determining reporting thresholds and requirements and this blog does not include all reporting information. RJS Law’s qualified international tax attorneys can help assist in determining the thresholds that apply to your circumstances.

[2] These are just a few examples of situations that would require the filing of Form 8938.

Published by Andrea Cisneros Valdez, Esq. and Andrew Rice, Law Clerk

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Filed Under: International Tax, International Tax Attorney, International Tax Reporting Requirements Tagged With: international tax, international tax attorney, International Tax Reporting

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