Segal, Cohen & Landis, P.C.
Form 8938 Foreign Asset Reporting — Compliance, Catch-Up, and Penalty Defense
IRS tax attorneys — Beverly Hills, CA. National representation.
The Foreign Account Tax Compliance Act (FATCA) created a two-sided reporting regime that has made offshore financial privacy effectively obsolete. On one side, foreign banks, brokerages, and investment funds report their US account holders directly to the IRS, with most of the world's financial centers participating through intergovernmental agreements. On the other side, US taxpayers must report specified foreign financial assets on Form 8938, filed with their income tax return, once asset values exceed thresholds that vary by filing status and by whether the taxpayer lives in the United States or abroad. The IRS matches what foreign institutions report against what taxpayers disclose — and when the two do not line up, the result is correspondence, examination, and penalties that start at $10,000 and escalate quickly.
At Segal, Cohen & Landis, our international tax attorneys have spent more than 33 years representing taxpayers with foreign financial assets. We determine exactly what must be reported, prepare Form 8938 in coordination with the FBAR and every other required international information return, and bring non-compliant taxpayers current through the Streamlined Filing Compliance Procedures — often with a reduced offshore penalty, and in some cases none at all. Every case is handled personally by a partner attorney.
How We Help
Our Approach to FATCA Compliance Attorney
Form 8938 Preparation and Filing
Form 8938, Statement of Specified Foreign Financial Assets, is filed with your federal income tax return and covers far more than bank accounts: foreign brokerage and investment accounts, foreign pension and retirement plans, foreign stock and securities held outside an account, interests in foreign entities, and foreign-issued life insurance or annuity contracts with cash value. We identify every reportable asset, value it under IRS rules, and prepare a complete and accurate Form 8938 — coordinated with the FBAR, Form 3520, Form 5471, Form 8621, and any other international information returns your facts require.
FATCA vs. FBAR Analysis
Form 8938 and the FBAR (FinCEN Form 114) are separate obligations with different thresholds, different asset definitions, and different filing channels. The FBAR is filed with FinCEN once foreign accounts exceed $10,000 in aggregate at any point in the year; Form 8938 is filed with the IRS on your tax return at much higher thresholds. The FBAR reaches accounts over which you have only signature authority; Form 8938 reaches non-account assets the FBAR ignores. Many taxpayers must file both, and filing one does not satisfy the other. We analyze your assets against both regimes so nothing is missed.
Catching Up Through Streamlined Filing
If you have unreported foreign assets from prior years, the Streamlined Filing Compliance Procedures allow non-willful taxpayers to come into compliance with three years of amended returns and six years of FBARs. Taxpayers who qualify as living abroad pay no offshore penalty; US residents pay a 5% miscellaneous offshore penalty on the highest year-end balance of the unreported assets. Where all income was reported and only the information return was missed, the delinquent international information return procedures may resolve the matter with no penalty at all. We select the right path and prepare the non-willfulness certification the entire submission depends on.
FATCA Penalty Defense
The failure-to-file penalty for Form 8938 starts at $10,000 and increases by $10,000 for each 30-day period of continued failure after IRS notice, up to an additional $50,000. Underpayments attributable to undisclosed foreign financial assets carry a 40% accuracy-related penalty, and the statute of limitations on your entire return can remain open until the form is filed. We contest assessed penalties through reasonable cause arguments, the IRS Office of Appeals, and — where the facts warrant it — litigation.
How It Works
The Resolution Process
Free Consultation
We review your foreign asset picture, your prior filings, and your exposure — including what the IRS likely already knows from foreign financial institution reporting under FATCA.
Foreign Asset Inventory
We identify every specified foreign financial asset — accounts, pensions, securities, entity interests, insurance products — and test your totals against the Form 8938 thresholds for your filing status and residency.
Disclosure Path Selection
We determine the right route: current-year compliance, the Streamlined Filing Compliance Procedures, the delinquent international information return procedures, or formal voluntary disclosure where willfulness is a concern.
Preparation and Filing
We prepare Form 8938, FBARs, amended returns, and the required certifications, and file the complete package — accurate, consistent, and defensible.
Penalty Resolution
If penalties have been assessed or proposed, we prepare reasonable cause abatement requests and represent you before IRS Appeals until the matter is resolved.
Ready to Resolve Your Tax Problem?
Our attorneys have helped thousands of clients resolve IRS matters. Your consultation is free and confidential.
Common Questions
Frequently Asked Questions
What is FATCA?+
The Foreign Account Tax Compliance Act, enacted in 2010, requires foreign financial institutions to report their US account holders to the IRS and requires US taxpayers to report specified foreign financial assets on Form 8938. Institutions that refuse face 30% withholding on US-source payments — which is why virtually every major foreign bank now reports. The IRS cross-references institution reports against taxpayer returns.
What are the Form 8938 reporting thresholds?+
For taxpayers living in the US: single and married-filing-separately filers must file if specified foreign assets exceed $50,000 on the last day of the year or $75,000 at any time during the year; married filing jointly, $100,000 and $150,000. For taxpayers living abroad, the thresholds rise to $200,000 / $300,000 for single filers and $400,000 / $600,000 for joint filers.
What is the difference between Form 8938 and the FBAR?+
They are independent requirements. The FBAR (FinCEN Form 114) goes to FinCEN, applies once foreign accounts exceed $10,000 in aggregate, and includes accounts with mere signature authority. Form 8938 goes to the IRS with your return, has higher thresholds, and reaches assets the FBAR does not — foreign pensions, securities held outside accounts, and interests in foreign entities. Many taxpayers must file both; filing one never satisfies the other.
Do I have to report foreign real estate under FATCA?+
Foreign real estate held directly in your own name is not a specified foreign financial asset and is not reported on Form 8938. But if the property is held through a foreign corporation, partnership, or trust, your interest in that entity is reportable — and the entity may trigger separate filings such as Form 5471 or Form 3520.
What are the penalties for not filing Form 8938?+
A $10,000 failure-to-file penalty, plus up to an additional $50,000 for continued failure after IRS notification. A 40% accuracy-related penalty applies to any understatement of tax attributable to the undisclosed assets, and the statute of limitations on your return can stay open indefinitely until the form is filed. Willful non-compliance can be prosecuted criminally.
I have never filed Form 8938. How do I catch up?+
If your conduct was non-willful, the Streamlined Filing Compliance Procedures are usually the best path — three years of amended returns, six years of FBARs, and a 5% offshore penalty (or none if you qualify as living abroad). Do not simply file quietly going forward or amend without a program; so-called quiet disclosures are a known IRS audit flag. An attorney-led assessment of willfulness should come first.
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Beverly Hills · Los Angeles · National
Segal, Cohen & Landis, P.C.
9100 Wilshire Boulevard, 601 East Tower, Beverly Hills, CA 90212
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