Form 8938 Penalty Calculator FATCA

Failure to file Form 8938 (Statement of Specified Foreign Financial Assets) results in a $10,000 initial penalty. If you don't file within 90 days after IRS notice, an additional $10,000 penalty applies for each 30-day period of continued failure, up to a maximum of $50,000 additional penalty. Total maximum: $60,000 per return.

Under IRC § 6662(j), if your tax underpayment is attributable to an undisclosed foreign financial asset required to be reported on Form 8938, a 40% penalty applies to that underpayment—double the standard 20% accuracy penalty. This applies regardless of whether the understatement is "substantial."

Filing thresholds depend on where you live and filing status. U.S. Residents: Single/MFS - $50,000 on Dec 31 or $75,000 anytime; MFJ - $100,000 on Dec 31 or $150,000 anytime. Foreign Residents: Single/MFS - $200,000 on Dec 31 or $300,000 anytime; MFJ - $400,000 on Dec 31 or $600,000 anytime.

Form 8938 (FATCA) and FBAR (FinCEN 114) have different requirements. Form 8938 goes to the IRS with your tax return and covers a broader range of foreign financial assets. FBAR goes to FinCEN and covers foreign bank/financial accounts. Thresholds differ: FBAR is $10,000 aggregate balance; Form 8938 is $50,000-$200,000+. You may need to file BOTH.

Specified foreign financial assets include: foreign bank accounts, foreign brokerage accounts, stock in foreign corporations (not through U.S. broker), partnership interests in foreign partnerships, foreign mutual funds (PFICs), foreign hedge funds, foreign bonds/notes, foreign life insurance with cash value, and interests in foreign trusts/estates. Assets held through U.S. financial institutions are generally excluded.

Yes, penalties may be waived if you can demonstrate the failure was due to reasonable cause and not willful neglect. However, the standard is strict. You must show affirmative facts supporting reasonable cause—simply not knowing about the requirement is generally insufficient. Reliance on professional advice may help if complete information was provided.

Yes. Similar to other international information returns, failure to file Form 8938 or filing it incorrectly can extend the statute of limitations for your entire tax return. The 3-year limitation period doesn't begin until you file a complete and accurate Form 8938. The IRS has 6 years to assess tax on omissions exceeding $5,000 attributable to undisclosed foreign assets.

Options include: (1) Streamlined Filing Compliance Procedures—for non-willful conduct, SFOP (0% penalty for foreign residents) or SDOP (5% penalty for U.S. residents); (2) Delinquent international information return submission procedures—for reasonable cause situations; (3) Voluntary Disclosure Practice—for willful conduct (provides criminal protection). Consult a tax professional to determine the best approach.