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What Form(s) Do You Need to File to Comply with FATCA?

Posted in Offshore Account Update on August 31, 2021 | Share

If you own offshore bank accounts, foreign securities or other foreign financial assets, you may be subject to the Foreign Account Tax Compliance Act (FATCA). Taxpayers that are subject to FATCA must file an additional form (or possibly additional forms) with their annual tax returns—and failure to do so can lead to significant penalties. So, what form(s) do you need to file to comply with FATCA? Here is an overview from Washington D.C. international tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

IRS Form 8938, Statement of Specified Foreign Financial Assets

The main form that most taxpayers will use to comply with FATCA is IRS Form 8938, Statement of Specified Foreign Financial Assets. This three-page form requires various pieces of information, including the number of foreign financial assets being reported, the maximum value of all assets reported, and whether the taxpayer acquired or sold any foreign financial assets during the tax year.

Taxpayers must also supply specific information for each foreign financial asset reported. For example, for foreign deposit and custodial accounts, taxpayers must disclose:

  • The type of account (i.e. deposit or custodial)
  • The account number or other designation
  • The account’s maximum value during the tax year
  • Whether the taxpayer used a foreign exchange rate to convert the value of the account to U.S. dollars

The disclosure requirements for other foreign financial assets (i.e. foreign securities and financial instruments) vary. Among other requirements, taxpayers must disclose the entity that holds or that issued each individual asset—and the IRS uses this information to compare taxpayers’ filings with the information disclosed by foreign financial institutions, corporations and other entities.

Other Forms Taxpayers May Use to Comply with FATCA

In certain circumstances, the IRS does not require taxpayers to file Form 8938 if they have reported their foreign financial assets through other means. If properly disclosed on the following forms, foreign financial assets do not also need to be disclosed on Form 8938 in order to comply with FATCA (though taxpayers must identify which additional form(s) they have filed in Part IV of Form 8938):

  • Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts
  • Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner
  • Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations
  • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund
  • Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships
  • Form 8938, Statement of Specified Foreign Financial Assets

Request an Appointment with Washington D.C. International Tax Lawyer Kevin E. Thorn

If you have questions about FATCA compliance, or if you are concerned that you may be behind on your FATCA reporting obligations, you should consult with a lawyer promptly. To request an appointment with Washington D.C. international tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 202-349-4033, email ket@thornlawgroup.com or contact us confidentially online today.


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