Foreign Account Tax Compliance Act (FATCA)


The Foreign Account Tax Compliance Act, more commonly known as FATCA, became law in March 2010, and is designed to make sure U.S. taxpayers with foreign accounts pay the taxes they owe.

FATCA generally requires the reporting of foreign financial assets, including some common ones:

  • Financial accounts held at foreign financial institutions;
  • Foreign stocks or securities not held in a financial account;
  • Foreign partnership interests; and
  • Foreign mutual funds.

And some less common ones:

  • Investment assets held by foreign or domestic grantor trusts for which you are the grantor;
  • Foreign-issued life insurance or annuity contracts with a cash-value; and
  • Foreign hedge funds and foreign private equity funds.

The information reporting from FATCA comes from two sources:

  • U.S. taxpayers reporting their foreign financial accounts and offshore assets, and
  • Foreign financial institutions reporting about accounts held by U.S. taxpayers
    • (or foreign entities in which U.S. taxpayers hold a significant ownership).

Essentially, if you're a U.S. taxpayer with foreign financial assets of more than a certain amount, you may be required to report them to the IRS.

FATCA and other requirements for international taxpayers are complex topics. After you review this page, you may want to discuss your situation with a tax professional or legal advisor.

Figure out if you need to report your assets, and report them to the IRS

U.S. citizens, U.S. individual residents, and a very limited number of U.S. nonresident individuals who own certain foreign financial accounts or other offshore assets must report those assets to the IRS if they exceed certain amounts.

The amount is different depending on if you live inside or outside the U.S., and if you are filing as single, married filing jointly, or married filing separately.

The specific amounts are listed in the Instructions for IRS Form 8938, Statement of Specified Financial Assets.

Penalties apply if you fail to file an accurate IRS Form 8938, Statement of Specified Financial Assets.

You don't have to file IRS Form 8938 if you don’t have to file an income tax return for the tax year, regardless of the value of your specified foreign financial assets.

How to report your foreign assets to the IRS

Foreign assets are reported on IRS Form 8938, Statement of Specified Foreign Financial Assets.

Fill out the form and attach it to your tax return.

There are penalties if you must file IRS Form 8938, Statement of Specified Foreign Financial Assets, and don’t, or if you file it and it is incorrect.

Taxpayers with foreign financial accounts may have to report information under both FATCA and Bank Secrecy Act regulations (FBAR). Separate penalties may apply for failing to file each form.

Remember that FATCA isn’t just about you reporting your own assets. Foreign financial institutions may provide third-party information reporting about financial accounts to the IRS, including the identity and certain financial information associated with the account. Be sure your information matches what the institution sends.

Form 8938, Statement of Specified Foreign Financial Assets

Form 8938 Instructions, Statement of Specified Foreign Financial Assets

Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

Publication 570, Tax Guide for Individuals With Income From U.S. Possessions

FATCA

FATCA Information for Individuals

FATCA Frequently Asked Questions for Businesses

The IRS office in Philadelphia, Pennsylvania provides international tax assistance. This office is open Monday through Friday from 6:00 a.m. to 11:00 p.m. EST (10:00 a.m. to 3:00 a.m. GMT):

  • Phone:  1 (267) 941-1000 (not toll-free)
  • FAX: 1 (267) 941-1055

Have a different tax issue? Browse common issues and situations at Get Help.

Is your tax problem more complex? If your issue is causing you financial hardship, you've tried repeatedly and aren't receiving a response from the IRS, or you feel your taxpayer rights are being violated, consider contacting Taxpayer Advocate Service TAS.

Do you feel that you need help from a tax professional but can’t afford one? You may be eligible for representation from an attorney, certified public accountant (CPA), or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). LITCs may also provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language.

Last modified January 11, 2018