The Foreign Bank Account Report (FBAR) formally known as FinCEN Form 114 is a disclosure requirement under the Bank Secrecy Act (BSA), administered by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
It is not a tax form. It does not go to the IRS. It is filed separately through the BSA E-Filing System, and its purpose is anti-money-laundering compliance — giving the U.S. government visibility into accounts that Americans and U.S. residents hold at foreign financial institutions.
If the aggregate value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year, you are required to file an FBAR for that year — even if the balance was $10,001 for just one day.
The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 and is implemented through IRS Form 8938, “Statement of Specified Foreign Financial Assets.” Unlike FBAR, Form 8938 is filed with your annual federal tax return (Form 1040) and is administered by the IRS.
FATCA casts a wider net than FBAR. It covers not only foreign bank accounts but also foreign stocks, securities, interests in foreign entities, foreign pension plans, and certain foreign life insurance policies with cash value. The thresholds are also higher and vary based on your filing status and whether you live in the U.S. or abroad.
These two requirements overlap in many situations but are legally distinct. Filing one does not satisfy the other.
| Feature | FBAR (FinCEN 114) | FATCA (Form 8938) |
|---|---|---|
| Governing law | Bank Secrecy Act | IRC § 6038D |
| Administered by | FinCEN / Treasury | IRS |
| Filing location | BSA E-Filing System (separate) | Attached to Form 1040 |
| Threshold — single, U.S.-based | $10,000 aggregate, any time | $50,000 year-end or $75,000 any time |
| Threshold — married filing jointly | $10,000 aggregate, any time | $100,000 year-end or $150,000 any time |
| Covers foreign bank accounts | Yes | Yes |
| Covers foreign stocks/securities | No | Yes |
| Covers foreign pensions | No | Yes |
| Covers foreign business interests | Limited (if held as account) | Yes |
| Non-willful penalty | Up to $10,000 per violation | $10,000 failure to disclose |
| Willful penalty | Greater of $100,000 or 50% of balance — per year | Up to $50,000 for continuing failure |
Important: Filing FBAR does not exempt you from filing Form 8938, and vice versa. If you meet both thresholds, you must file both — separately. Many E-2 investors unknowingly file only one.
This is the question we receive most often and the answer is nuanced but usually yes.
FBAR and FATCA obligations apply to “United States persons,” which includes U.S. citizens, Green Card holders, and anyone who meets the Substantial Presence Test (SPT) under IRC § 7701(b).
An E-2 visa holder who spends 183 days or more in the U.S. over a rolling three-year period (using the IRS weighted formula) is typically classified as a resident alien for tax purposes and is therefore subject to FBAR and FATCA on their worldwide income and assets.
The weighted formula works as follows:
If the total reaches 183, you meet the test.
“Most E-2 visa holders come from countries where maintaining a home-country bank account, real estate, or family business interest is perfectly normal. What they often don’t realize is that these assets become reportable as soon as they cross U.S. residency thresholds.”
Note on Foreign Real Estate: Foreign real estate held directly in your own name is generally not reportable under FBAR or FATCA. However, if the property is held through a foreign entity such as a company or trust the interest in that entity may be reportable. Income generated from foreign real estate is always taxable and must be reported on your U.S. tax return regardless.
April 15 — FBAR original deadline (FinCEN 114 is due by April 15 of the following calendar year). An automatic extension to October 15 is granted — no separate extension request is needed.
April 15 — FATCA Form 8938 deadline (filed with your Form 1040). If you file for a federal tax extension, Form 8938 extends with it.
October 15 — Extended deadline for both FBAR (automatic) and Form 8938 (with a tax extension).
Year-round — Delinquent or amended filings. If you missed prior years, the IRS Streamlined Filing Compliance Procedures may allow you to catch up with reduced penalties — but you must act before the IRS contacts you first.
Form 8938 is completed and attached directly to your Form 1040 when you file your annual federal tax return. Your CPA should prepare this as part of your tax return package if you meet the thresholds.
The U.S. government takes FBAR and FATCA violations extremely seriously. Penalties are structured around willfulness — whether you knowingly failed to file or made an honest mistake.
USCIS does not directly review FBAR or FATCA filings. However, tax non-compliance discovered during adjudication or background checks can raise serious red flags. A history of IRS penalties or unresolved federal tax issues can create complications at renewal time that no immigration attorney wants to address at the last minute. Clean compliance is always the safest strategy for long-term E-2 status.
Many E-2 holders mistakenly believe their visa classification exempts them from U.S. tax residency. If you pass the Substantial Presence Test, you are a resident alien for tax purposes — regardless of your visa type.
If you are an authorized signatory on a foreign business account — such as a parent company or family business — that account may need to be reported on FBAR even if you have no personal ownership of the funds.
National pension systems from your home country (such as Australia’s Superannuation, Canada’s RRSP, the UK’s ISA, or India’s PPF) may be reportable under FATCA. Many E-2 holders have these accounts and are unaware they need to be disclosed.
These are entirely separate legal requirements. Filing FinCEN 114 does not satisfy your FATCA obligation. If your assets exceed both thresholds, you must file both — with different agencies, on different forms.
FBAR requires the U.S. Treasury’s published year-end exchange rate, not the rate on the transaction date, not your bank’s rate, and not a Google conversion. Using the wrong rate can result in incorrect reporting.
The IRS Streamlined Compliance Procedures offer meaningful penalty relief — but only for taxpayers who act voluntarily before the IRS initiates contact. Once you are under examination, these programs are no longer available.
Interests in foreign corporations (Form 5471) or foreign partnerships (Form 8865) may trigger additional reporting requirements beyond FBAR and FATCA. E-2 holders with business ties in their home country are particularly at risk of overlooking these.
No. Your visa type does not determine your filing obligation — your tax residency status does. E-2 holders who meet the Substantial Presence Test are treated as resident aliens for tax purposes, subject to the same FBAR and FATCA requirements as U.S. citizens and Green Card holders.
You would need to file FBAR, since the balance exceeds the $10,000 aggregate threshold. However, you likely would not need to file FATCA, since a single $15,000 account is well below the $50,000 year-end threshold for a single U.S.-based filer. That said, you should review your complete asset picture with a CPA, since other foreign assets could push you over the FATCA threshold.
Yes. FBAR is triggered if the aggregate maximum value of your foreign accounts exceeded $10,000 at any point during the calendar year — not just on December 31. Since your balance was $12,000 in January, you are required to file FBAR for that year.
You may be eligible for the IRS Streamlined Filing Compliance Procedures. For U.S.-based filers (Streamlined Domestic Offshore Procedures), you pay a 5% miscellaneous offshore penalty. For non-resident filers (Streamlined Foreign Offshore Procedures), penalties may be waived entirely. It is critical to work with a qualified CPA before filing, and to act before the IRS contacts you — voluntary disclosure receives far more favorable treatment than a discovered violation.
Both forms can technically be self-filed. But for E-2 holders, the stakes are high enough that professional guidance is strongly recommended. Determining your residency status, identifying all reportable accounts and assets, applying correct exchange rates, and navigating treaty elections all require specialized expertise. Errors — even well-intentioned ones — can trigger significant penalties.
FBAR and FATCA compliance is not optional and for E-2 visa holders, getting it wrong carries consequences that go beyond IRS penalties. Your visa renewal, your business operations, and your financial future in the United States all depend on staying compliant.
At E2VisaCPA, we specialize exclusively in E-2 visa holders and foreign investors. Our practice is led by Manmeet Saluja, CPA, EA a U.S.-licensed Certified Public Accountant, IRS Enrolled Agent, and E-2 visa holder himself with over 18 years of experience. We understand these requirements not just from a technical standpoint, but from personal experience navigating them.
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E2VisaCPA provides expert CPA-led financial, tax, and compliance support for E-2 visa holders worldwide. We help foreign investors meet U.S. regulatory and immigration-aligned financial requirements.
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