Do U.S. Citizens Living Abroad File IRS Form 8938?

Do U.S. Citizens File the Form 8938, Even if Living Abroad?

U.S. Citizens and Form 8938 

The Form 8938 is required by certain U.S. Persons who own specified foreign financial assets and meet the threshold for filing. Unlike certain other international information returns, the IRS Form 8938 is only required if the person is required to file a tax return in that year. In other words, while other foreign IRS tax forms such as the FBAR or Form 3520 are required by any U.S. person who meets the threshold for filing (even if they were not required to file a tax return in a specific year), Form 8938 is part of the tax return and only necessary when filing the tax return is necessary. But, do U.S. citizens living in the U.S. and abroad have to file the form?

Form 8938 For U.S. and Foreign Residents

Yes, U.S. citizen taxpayers are required to file Form 8938 whether they live in the United States or abroad.

As provided by the IRS:

• • • You are a specified individual if you are one of the following.

      • A U.S. citizen.

      • A resident alien of the United States for any part of the tax year (but see Reporting Period, later).

      • A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return.

      • A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. See Pub. 570, Tax Guide for Individuals With Income From U.S. Possessions, for a definition of bona fide resident.

U.S. Resident vs. Foreign Resident

While a U.S. citizen living in the U.S. or abroad must file Form 8938, there are different threshold requirements for filing, depending on whether the taxpayer is considered a U.S. resident or foreign resident (and whether the taxpayer files jointly or single/separately).

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.