Does Form 8938 Replace FBAR (FinCEN 114) Filing?
Two of the most common IRS international information reporting forms are Form 8938 (Foreign Account Tax Compliance Act) and FBAR (Foreign Bank and Financial Account Reporting FinCEN Form 114). Both forms require a US Person who is the owner of or has an interest in certain foreign assets, accounts, investments, income to report the information to the US Government. In 2013, the FBAR became a form that is exclusively filed online directly on the FinCEN website. In previous years, the FBAR was actually a paper form (TD F 90-22.1) and included as part of a tax return. With the introduction of Form 8938 (which does not have to be filed electronically) and the termination of paper form TD F 90-22.1, came much confusion as to whether or not Form 8938 replaced the TD F 90-22.1 and FBAR. Form 8938 does not replace the FBAR — and both forms may still be required depending on various factors. Here are a few tips:
Form 8938 is Part of the Tax Return
Unlike the FBAR (which is filed electronically and directly on the FinCEN website), Form 8938 is actually part of the tax return filed by the Taxpayer. Therefore, Form 8938 is a form that is included in the submission package of the actual tax return and is usually included as part of any commercial tax package such as TurboTax. Unfortunately, several other international information reporting forms such as Form 3520 are typically not included in the TurboTax package.
Form 8938 Includes More Assets
While both Form 8938 and FBAR require the Taxpayer to include information regarding their foreign accounts, assets, and investments, Form 8938 is more encompassing. It also requires including assets beyond just financial accounts, even if the asset is not technically held at a Foreign Financial Institution. For example, individually acquired stock certificates are typically included on Form 8938 but not the FBAR (exceptions may apply).
FBAR Filing Due Date is on Automatic Extension
In order to receive an extension on filing Form 8938, the Taxpayer would apply for an extension of their regular tax return. And, since Form 8938 is part of that tax return, it goes on automatic extension as well; in other words, a separate Form 8938 extension is not required. On the other hand, the FBAR is not technically part of the tax return and therefore does not go on automatic extension along with the tax return — although for the past few years the FBAR has been an automatic extension until October, so Taxpayers should be careful and check each year to see if the rules have changed.
6013(g) Elections and FBAR
Nonresident alien taxpayers can usually elect to be treated as a resident for tax purposes and file a joint tax return with their US person spouse by making a 6013(g) election. While this may require the Taxpayer to include the information on Form 8938 as part of the tax return, just making the election itself does not typically require the Taxpayer to file an FBAR as well. Nevertheless, some nonresident Taxpayers may still file the FBAR for protective purposes, especially if they plan on becoming a US person.
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