Chapter 8

FBAR on Steroids

Form 8938, the second foreign-asset form: higher thresholds abroad, a wider list of assets, and why one never replaces the other

Hipster holding a calculator and glancing sideways, with one form labeled FinCEN behind him on the left and another labeled IRS on the right.

A week after Hipster filed, his friend texted again: "Great. Did you do the 8938 too?" It was not a typo this time. It was a second form.

Form 8938 asks a similar question in a different place. It goes to the IRS, not FinCEN, it's attached to your income tax return, and it's due when the return is due, extensions included. It comes from 26 U.S.C. § 6038D: an individual with an interest in specified foreign financial assets must report them if their total value passes a threshold.

Thresholds. No flat $10,000 here. It depends on where you live and whether you file jointly (table below). "Living abroad" means a tax home in a foreign country plus either bona fide residence abroad for an uninterrupted period that includes the entire tax year, or at least 330 full days abroad in a 12-month period ending in the tax year. Hipster has been abroad four years, and on the numbers in this story he's well under $200,000, so Form 8938 probably isn't his problem. Move home, and the lower thresholds apply.

What counts. Signature authority over an account doesn't by itself require Form 8938 reporting unless you otherwise have an interest in it (it can still require an FBAR). But Form 8938 reaches what the FBAR doesn't: under § 6038D(b), a specified foreign financial asset includes financial accounts at foreign institutions and non-account assets such as stock of a non-US issuer and interests in foreign entities. Hipster's 20 percent stake in the company is not an FBAR item. It's exactly what Form 8938 counts.

Joint accounts. Spouses filing jointly file one combined Form 8938. Hipster and his girlfriend aren't married, so for their joint account he reports the maximum value of the entire account, whatever his own share.

Penalties are separate from the FBAR's and they stack: $10,000 for failing to file, plus $10,000 for each 30 days the failure continues after 90 days after IRS notice, up to $50,000 more ($60,000 total). Reasonable cause, not willful neglect, is a defense. And filing Form 8938 never replaces the FBAR; the instructions say so outright.

Filer	Year-end	Any time in the year
Unmarried, living in the US	more than $50,000	more than $75,000
Married filing jointly, living in the US	more than $100,000	more than $150,000
Unmarried, living abroad	more than $200,000	more than $300,000
Married filing jointly, living abroad	more than $400,000	more than $600,000

	FBAR (FinCEN Form 114)	Form 8938
Filed with	FinCEN, through the BSA E-Filing System	The IRS, attached to the income tax return
Trigger	More than $10,000 in aggregate at any time	Thresholds above, by residence and filing status
Signature authority only	Reportable	Not by itself, unless you otherwise have an interest in the account
Foreign company stock or interest	Not itself an account	Counts as a specified foreign financial asset
Non-willful penalty	Up to $16,536 per violation	$10,000, plus up to $50,000 after IRS notice

The Law, Actually

26 U.S.C. § 6038D(a), (b) -- report specified foreign financial assets if their aggregate value exceeds the threshold; includes (b)(1) accounts at foreign financial institutions and (b)(2) non-US stock or securities, financial instruments or contracts with a non-US issuer or counterparty, and interests in foreign entities.
26 CFR § 1.6038D-2(a) -- thresholds (aggregate value exceeds): $50,000 / $75,000; $100,000 / $150,000 joint in the US; $200,000 / $300,000 abroad; $400,000 / $600,000 joint abroad.
Instructions for Form 8938 -- attach to the return, due with it, extensions included; living-abroad definition; non-spouse joint owners report the maximum value of the entire account; assets reported on a timely filed Form 3520, 5471, 8621, or 8865 are identified, not re-reported; Form 8938 does not replace the FBAR.
IRS, Comparison of Form 8938 and FBAR Requirements (page last reviewed September 19, 2026) -- signature authority: Form 8938 "No, unless you otherwise have an interest in the account"; FBAR "Yes, subject to exceptions"; foreign stock not held in a financial account is reportable on Form 8938 but not on the FBAR.
26 U.S.C. § 6038D(d), (g) -- penalty of $10,000, plus $10,000 for each 30-day period (or fraction) after 90 days from IRS notice, with additional penalty capped at $50,000; no penalty if the failure is due to reasonable cause and not willful neglect.

Bottom Line

Two forms, two agencies, two rule sets. The FBAR has the low trigger and catches signature authority. Form 8938 has the high trigger abroad and catches foreign company interests. Hipster likely owes the FBAR but not Form 8938, as long as he stays a qualifying resident abroad and his Form 8938 assets stay under the threshold. Thresholds come from regulation, so confirm the figures for the filing year.