Filing Form 8938

The Foreign Account Tax Compliance Act (FATCA), which passed as part of the HIRE Act, requires certain people to report, depending on the value, foreign assets and foreign financial accounts. You may need to file a Statement of Specified Foreign Financial Assets, known as Form 8938, with your tax return if you:

  • Are a U.S. individual taxpayer, including U.S. citizens, resident aliens, certain nonresident aliens, and certain domestic corporations, partnerships, and trusts
  • Own certain specified foreign assets, and
  • Those assets are of a certain value

If Form 8938 is not properly filed with your tax return, the IRS can deem your entire tax return unfiled. When filing your tax returns, it is vital that you follow the proper international reporting requirements.

What Do You Need To Report?

The IRS has specified foreign financial assets, including non-U.S. financial accounts, non-U.S. retirement accounts and direct ownership in a non-U.S. business entity. Keep in mind that you are liable for the information and forms provided in or omitted from your filings with the IRS and the Department of Treasury, even when using a tax preparer or CPA. Form 8938 is not the only form you need to worry about. Failure to timely file such forms as Forms 8938, 5471, 5472, 8858, 8865, 926, 8621, and 3520-A, when required, could suspend the statute of limitations for the IRS to assess tax or penalties due until such time as the form is filed.

If you have questions about your international accounts, a skilled tax attorney at Bucci Law Offices can help guide you through the minefield of responsibilities.

Taxpayers affected by FATCA should know that this requirement does not replace the FBAR filing requirements (Foreign Bank and Financial Accounts Report) on Form TD F 90-22.1. Rather, the FATCA reporting requirement is in addition to the FBAR. Even if a taxpayer has filed an FBAR, he or she must additionally report information on Form 8938, with his or her annual tax return.

Do you have foreign bank accounts or foreign assets including but not limited to the following?

  • Signature authority on a foreign financial account
  • A financial account at a foreign branch of a U.S. bank
  • A foreign corporation
  • A foreign trust
  • A foreign partnership interest
  • Indirect interest in foreign assets
  • Foreign mutual funds
  • Domestic mutual funds investing in foreign stock
  • Foreign real estate
  • Precious metals, art, antiques, jewelry, cars, or collectibles
  • Social Security-type income from a foreign government
  • A foreign-issued life insurance or annuity contract with cash value
  • A safety deposit box in a foreign institution

The reporting obligations on international tax issues are complex and constantly changing. Failure to comply with these complicated and convoluted rules carries harsh consequences. Remember, ignorance of the law or reliance upon a tax preparer is not an excuse for failure to comply with the tax rules.

Contact Bucci Law to get started. From offices in Miami and Fort Lauderdale, we represent clients across Florida, the nation and the world.