Form 8938 (Rev. November 2021) Checklist
Purpose
Form 8938, the Statement of Specified Foreign Financial Assets, assists the Internal Revenue Service in enforcing the Foreign Account Tax Compliance Act reporting requirements. It supports the Department of the Treasury in tracking offshore holdings and improving tax compliance. Taxpayers attach Form 8938 to their federal return when their foreign financial assets exceed certain thresholds.
U.S. citizens, Green Card holders, and certain nonresident aliens may be required to file IRS Form 8938, depending on their filing status and residency status. Thresholds vary based on whether the taxpayer lives in the United States or qualifies as living abroad. The filing applies only when an income tax return is required for the year.
The November 2021 revision confirms that the Global Intermediary Identification Number field is optional and does not block acceptance. Leaving GIIN fields blank does not, in itself, create a filing penalty. Accurate foreign asset reporting also helps reduce exposure to penalties under Title 26.
Preparation Steps
Step 1: Determine the Filing Requirement
A filer calculates the aggregate value of specified foreign financial assets at year-end and at the highest point during the tax year. The reporting threshold depends on the taxpayer's filing status and whether they live in the United States or qualify as living abroad under Publication 519. Threshold testing should include accounts, securities, and other reportable foreign financial assets.
Step 2: Identify Filer Status and Controlling Parties
The filer selects the correct status in Part I, such as specified individual, partnership, corporation, or trust. Entities provide the details of the controlling owner or current beneficiary and ensure that the identification numbers match IRS records. Correct filer status helps prevent misreporting and avoids processing issues in e-file systems.
Step 3: Document Foreign Deposit and Custodial Accounts
Each foreign deposit account and custodial account is listed separately in Part V with the account number and institution details. Ownership and account activity, including joint ownership and closures, must match the related tax items reported elsewhere on the return. Account details should be taken from annual statements to reduce entry errors.
Step 4: Report Maximum Values and Currency Conversions
The maximum value is the highest balance reached during the year, not the ending balance. Foreign currency amounts are converted to U.S. dollars using the Treasury Bureau of Fiscal Service rate, when available, or another publicly disclosed rate. Using a consistent conversion approach across accounts supports clean reconciliation.
Step 5: Complete Summary Sections for Financial Accounts
Totals from Part V roll into the Part I summary lines for the count of accounts and maximum aggregate values. Closure answers must align with the account-level entries to avoid inconsistencies in FATCA reporting. Many tax software platforms calculate these totals automatically when account data is entered correctly.
Step 6: Inventory Other Foreign Assets
Part VI covers other foreign assets, including foreign stocks, bonds, derivatives, partnership interests, and specific foreign pension arrangements. Each item is listed separately with identifying information and a maximum value for the tax year. Asset descriptions should be specific enough to match related disclosures on other foreign information returns.
Step 7: Reconcile the Asset Summary in Part II
Part II totals must match the detailed reporting in Parts V and VI. The filer also notes whether assets were acquired or sold during the year to maintain consistency in the foreign financial asset reporting record. Reconciliation reduces the risk of IRS follow-up letters caused by mismatched counts or values.
Step 8: Report Related Tax Items in Part III
Part III lists income, gains, deductions, and credits tied to specified foreign financial assets. Each entry must point to the exact form and line on the tax return, such as Schedule B for interest or Schedule D for capital gains. Explicit references help confirm that offshore income was reported and taxed correctly.
Step 9: Identify Excepted Assets Reported Elsewhere
Part IV reports the number of other foreign information returns filed, such as Forms 3520, 3520-A, 5471, 8621, and 8865. These assets may still count for threshold testing, but the detailed information is not duplicated when reported adequately on those forms. Keeping a list of filed forms also helps support future compliance reviews.
Step 10: Provide Global Intermediary Identification Numbers
A filer may enter the GIIN for foreign financial institutions or foreign entities when it is available. The GIIN field is optional, but the institution name and foreign mailing address must still be completed. GIIN details may appear on account statements or FATCA registration materials from the institution.
Important Notes
Form 8938 does not satisfy the separate FBAR requirement as outlined in FinCEN Form 114. The FBAR is filed through the BSA E-Filing System and follows different thresholds and deadlines. Some taxpayers are required to file both reports, even when the duplicate foreign financial accounts are involved.
Form 8938 is attached to the federal income tax return and follows the return’s due date, including extensions. The FBAR is due on April 15, with an automatic extension to October 15, and is filed separately from the tax return. Filing one form does not automatically meet the other reporting obligation.
Taxpayers who missed prior foreign asset reporting may qualify for Streamlined Filing Compliance Procedures or the Voluntary Disclosure Practice. Eligibility depends on factors such as residence, willfulness, and the duration of the affected period. A tax adviser familiar with international financial reporting can help determine the most suitable corrective path.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
