Tax Law Center Blog

The IRS places heavy emphasis on Form 8938, the Statement of Specified Foreign Financial Assets mandated by FATCA, and noncompliance can lead to harsh penalties and extended audit exposure. This form is required when U.S. taxpayers hold foreign assets exceeding set thresholds—and many mistakenly believe that filing an FBAR alone suffices. Failure to file Form 8938 may result in a base penalty of $10,000.

Form 8938 covers a broad range of assets—including foreign bank, brokerage, and retirement accounts, as well as stocks, securities, and interests in foreign entities—not all of which count toward an FBAR. A clear comparison is available in Difference between Form 8938 and FBAR Requirements.

Non-filing or misreporting may also extend your tax return’s statute of limitations, increasing exposure to IRS audits. This audit risk and how FATCA data from foreign banks can trigger Form 8938 scrutiny is detailed in Navigating the Puzzle: Understanding Form 8938 Audit Triggers.

With increasing global data-sharing under FATCA, the IRS can detect undisclosed foreign assets more easily than ever. Ignoring these obligations is a costly mistake.

At Patel Law Offices, we guide taxpayers in determining their Form 8938 filing requirements, preparing accurate returns (or amendments), seeking penalty relief, and defending against IRS examinations. Proactive compliance is the most effective guard against avoidable penalties and extended audits.

If you hold foreign financial accounts, investments, or entity interests, review your Form 8938 obligations now, before the IRS does.