Specialized Returns for Individuals · International information reporting

Distinctions between FBAR and Form 8938 requirements

Practitioners describe these two as overlapping, which understates the problem. They overlap on the common case — a bank account abroad, owned outright, worth a lot — and diverge on almost everything around it. Six things differ, and only one of them is the number everybody remembers. The two forms disagree about who has to file, about what counts as a covered thing, about what it means to have an interest in one, about how the threshold is shaped, about how to value what is reported, and about where the filing goes. On one point they disagree about the geography of the United States itself.

The rule

Who files. Form 8938: specified individuals — United States citizens, resident aliens and certain non-resident aliens — and specified domestic entities, being certain domestic corporations, partnerships and trusts^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements The FBAR: United States persons, including citizens, resident aliens, trusts, estates and domestic entities, with an interest in foreign financial accounts meeting the threshold^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

Where the United States ends. United States territories are outside the United States for Form 8938 but inside it for the FBAR — resident aliens of the territories and territory entities are subject to FBAR reporting, which is the one place the two regimes disagree about what the country is^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

What is covered. Form 8938 reaches assets: any financial account within IRC § 1471(d)(2) maintained by a foreign financial institution, plus three categories held outside such an account — stock or a security issued by a non-United States person, a financial instrument or contract held for investment with a non-United States issuer or counterparty, and any interest in a foreign entity (IRC § 6038D(b))^TY2026Verified 2026-08-21IRC § 6038D(b), read at law.cornell.edu/uscode/text/26/6038D The FBAR reaches accounts: a financial interest in, or signature or other authority over, at least one financial account located outside the United States — and generally an account at a financial institution located outside the United States is a foreign financial account, whether or not it produced taxable income^TY2026Verified 2026-08-21IRS, Report of Foreign Bank and Financial Accounts (FBAR), irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar From that flow the branch rule — an account at a foreign branch of a United States institution is reportable on the FBAR but not on Form 8938; an account at a United States branch of a foreign institution is reportable on neither — location of the branch decides the FBAR, and the status of the institution decides Form 8938^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements — and the treatment of things that are not accounts at all: foreign stock or securities held outside an account, foreign partnership interests, and foreign hedge and private equity funds are Form 8938 assets and are not FBAR accounts — the FBAR reaches accounts, Form 8938 reaches assets^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

What an interest is. an interest arises for Form 8938 where any income, gain, loss, deduction, credit, gross proceeds or distribution from the asset would be required to be reflected on the income tax return; for the FBAR it arises from being owner of record or holder of legal title, from that person being the filer's agent, from a sufficient interest in the entity that holds title, or from signature authority^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements Which is why signature authority over an account, without any interest in it, is reportable on the FBAR subject to exceptions but is not a Form 8938 asset unless the filer otherwise has an interest — which is why an employee with authority over a company account can have an FBAR obligation and no tax reporting at all^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

How the thresholds are shaped. Form 8938 uses four threshold pairs varying by filing status and residence, each with a last-day figure and an any-time figure; the FBAR uses one cumulative figure with no last-day test and no variation for status or residence^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

How value is measured. Form 8938: the maximum value of each specified foreign financial asset, at fair market value in United States dollars in accordance with the Form 8938 instructions, converted at the end-of-taxable-year exchange rate^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements, irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements The FBAR: the maximum value of each account during the year, taken from periodic account statements in the currency of the account and converted at the end-of-calendar-year exchange rate — the maximum balance, not the closing balance^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements, irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

When and where. Form 8938: attached to the annual income tax return and due on the date of that return, including any applicable extensions — it is not a standalone filing (IRC § 6038D(a); IRS Form 8938 and FBAR comparison)^TY2026Verified 2026-08-21IRC § 6038D(a), read at law.cornell.edu/uscode/text/26/6038D, and IRS, Comparison of Form 8938 and FBAR requirements, irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements The FBAR: received by 15 April following the calendar year reported, with an automatic 6-month extension to 15 October that need not be requested — filed electronically through FinCEN's BSA E-Filing System and never with a federal tax return^TY2026Verified 2026-08-21IRS, Report of Foreign Bank and Financial Accounts (FBAR), irs.gov, and IRS, Comparison of Form 8938 and FBAR requirements, irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

And the rule that governs all of it. neither filing satisfies the other — the same account can be reportable on both, on one, or on neither, and the two are administered by different agencies under different titles of the United States Code^TY2026Verified 2026-08-21IRS, Comparison of Form 8938 and FBAR requirements (page last reviewed 18 September 2025), irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

Current figures

How it works in practice

Run both analyses, always (IRC § 6038D(b) for one, 31 U.S.C. § 5314 for the other). The efficient instinct — work out the foreign position once and apply it to both forms — is the source of most errors in this area. Take the client’s holdings and pass them through two independent filters.

The four cases are all live. Some things are on both forms (a foreign bank account owned outright). Some are on Form 8938 only (foreign shares held outside an account, partnership interests, hedge fund interests). Some are on the FBAR only (an account at a foreign branch of a domestic bank, signature authority over someone else’s account). And some are on neither (real estate, currency, metals and personal property held directly). Knowing which quadrant a holding falls in is the entire skill.

The interest tests are genuinely different. Form 8938 asks whether the asset would produce something reportable on the income tax return. The FBAR asks about record ownership, legal title, agency, sufficient interest in a title-holding entity, or signature authority. A client can have an FBAR interest in an account whose income is not theirs, and a Form 8938 interest in an asset they do not legally own.

The territories point catches people who move. A resident alien of a United States territory is subject to FBAR reporting; for Form 8938 the territories are outside the United States, which affects which residence threshold pair applies. It is the one place where “the United States” means two different things on the same client’s file.

Diary two dates. The FBAR sits on the calendar year with its own automatic extension; Form 8938 rides the income tax return and its extensions. A client on a fiscal year, or one who extends the return, has two different deadlines in the same season.

Say the substitution rule out loud to the client. People who have filed one for years and then learn of the other assume the first covered them. It never did, and the penalty regimes are separate too.

How this has changed

The divergence is an accident of history rather than a design. The FBAR is a 1970 Bank Secrecy Act report aimed at money movement, administered by FinCEN, with concepts — signature authority, financial interest through a majority-owned entity — drawn from anti-money-laundering practice. Form 8938 is a 2010 tax provision aimed at unreported income (IRC § 6038D), administered by the Service, with concepts drawn from the FATCA withholding rules, which is why it follows the status of the institution rather than its location.

Nothing has been done to reconcile them. Proposals to merge the two filings have been made repeatedly and none has been enacted; Pub. L. 119-21 did not touch either regime. The practical consequence is that the Service’s comparison table, rather than either statute, is the working authority — and that the table is worth re-reading each year rather than remembered, because several of its rows resolve in ways neither statute predicts.

What has changed is the cost of getting it wrong. Automatic exchange of information means the Service now receives account data directly from foreign institutions, so the historic pattern — a client who filed one form for years and no one noticed the other was missing — resolves far more often, and resolves against the client.

Exam focus

Expect a matrix question: a list of holdings, and which form each goes on. Work the two filters separately — account and location for the FBAR, asset and institution status for Form 8938.

The four highest-yield discriminators are the branch rule in both directions, signature authority (FBAR only), non-account foreign securities and partnership interests (Form 8938 only), and the fact that neither reaches directly held real estate, currency, metals or personal property.

Know that only Form 8938 has a last-day test and residence-based thresholds, that only the FBAR treats the territories as part of the United States, and that filing one has never satisfied the other.

Check yourself

1. Which form reaches signature authority over an account in which the filer has no interest?

Answer: The FBAR only, subject to the exceptions for certain officers and employees. Signature authority is not an interest in a specified foreign financial asset for Form 8938.

2. A specified individual holds an account at the London branch of a United States bank. Which form reaches it?

Answer: The FBAR only. The account is located outside the United States, but the institution maintaining it is not a foreign financial institution.

3. Are United States territories part of the United States for these purposes?

Answer: They differ. For Form 8938 the territories are outside the United States; for the FBAR resident aliens of the territories and territory entities are subject to reporting.

4. A client’s foreign accounts peaked at $60,000 in June and stood at $48,000 on the last day of the year. She is unmarried and lives in the United States, and has no other foreign assets. What must she file?

Answer: The FBAR only. The aggregate exceeded $10,000 at a time during the year, so the FBAR is required. For Form 8938 the thresholds for an unmarried specified individual living in the United States are more than $50,000 on the last day of the year or more than $75,000 at any time during it, and neither is met — $48,000 on the last day and $60,000 at the peak.

5. Does filing an FBAR satisfy the Form 8938 requirement?

Answer: No. The two are separate regimes under different titles of the United States Code, administered by different agencies, with separate penalties; neither filing substitutes for the other.