FBAR FinCEN Form 114 vs. IRS Form 8938-SFFA

Author: Marc J Strohl

Avoid Pitfalls When Working with Expatriate Taxation Issues

With the much recently publicized enforcement activity, U.S. resident aliens may have both an FBAR FinCEN Form 114 reporting requirement under CFR FinCEN Title 31- Money & Finance- and under the Foreign Account Tax Compliance Act (FATCA) in yet another effort to improve tax compliance regarding foreign financial assets and offshore accounts, a FATCA Form 8938 filing requirement under CFR Title 26- Internal Revenue.

The later FATCA Form 8938 was mandated- for individuals since 2011- and passed into legislation in 2010, POTUS signing it into law on March 18, 2010 as IRC Sec 6038D. IRC Sec 6038D was enacted as part of the HIRE Act, whereas the FBAR FinCEN Form 114 (formerly Form TD F 90-22.1) had been in existence since the early 1970’s.

In the case of FinCEN Form 114 U.S. resident aliens meeting an aggregate maximum threshold test must report their financial interests in and signatory authority over Foreign Bank and other Financial Accounts, separately from the tax return filing by efile to FinCEN annually. In addition to the FBAR mandate those same specified U.S. resident aliens whose interests in certain Specified Foreign Financial Assets (SFFA) meeting a different set of threshold tests must report their interest in SFFAs on Form 8938, which accompanies Form 1040 annually.

Advisors must consider both the non-willful and potential willful Civil and Criminal penalties associated with non-compliance as related to both the FBAR Form 114 and FATCA Form 8938 filing requirements.

Join experienced practitioner Marc J. Strohl, CPA, as he explores the difficulties arising from compliance considerations associated for both Americans working abroad and Foreign Nationals living and working here in the U.S. that often challenge even experienced tax professionals when it comes to compliance efforts regarding both the FinCEN FBAR Form 114 and FATCA Form 8938.

Publication Date: February 2021

Designed For
Tax and accounting professionals who work with expatriates- U.S. persons living and working outside the U.S. and those Foreign Nationals- non-U.S. persons living and working here inside the U.S. who have foreign accounts and specified foreign financial assets outside the U.S. and how to report them properly remaining in full U.S. tax compliance.

Topics Covered

• Enforcement efforts to date
• FBAR Form 114
• Background info
• New Filing Requirements
• Form 114 layout
• Who Must File
• Definition of U.S. Persons
• Definition of Financial Interests
• Signature Authority
• Definition of Foreign Accounts
• FBAR Exemptions
• FBAR Minor Requirements
• FBAR Penalties
• FATCA FinCEN Form 8938
• Background Info
• Who Must File
• Definition of Specified Individuals
• Exploring the Filing Thresholds
• Definition of Living Outside the U.S. for FATCA purposes
• Define an Interest in a SFFA
• Defining a SFFA
• The Differences between FinCEN FBAR Form 114 and FATCA Form 8938

Learning Objectives

• Recognize how and why the FinCEN FBAR Form 114 and FATCA Form 8938 came about
• Identify how a taxpayer meets the FinCEN Form 114 $10,000 Max threshold
• Identify who must file an FBAR FinCEN Form 114
• Describe the various types of Foreign Accounts that must be reported on a FinCEN FBAR Form 114
• Identify what Signature Authority means
• Describe who is exempt from an FinCEN FBAR 114 filing requirement
• Identify who must file FATCA Form 8938
• Recognize what a Specified Individual and Interest in a SFFA mean
• Identify how to apply the FATCA Form 8938 myriad of filing thresholds
• Describe what a SFFA is and what is not an SFFA
• Identify the unique and varied differences between FinCEN FBAR Form 114 and a FATCA Form 8938

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (1 hour)

Program Prerequisites
Basic understanding of federal income taxation concepts.

Advance Preparation
None