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2026 Form 8938 Threshold | US International Tax Lawyers

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US taxpayers must file Form 8938 with their US tax returns if they hold foreign financial assets with an aggregate value exceeding a relevant balance threshold. This article discusses the 2026 Form 8938 threshold limits.

2026 Form 8938 Threshold: Form 8938 Background

Form 8938 burst into the US international compliance scene in 2011 as a result of the famous Foreign Accounts Tax Compliance Act (FATCA). FATCA was enacted as part of the Hiring Incentives to Restore Employment Act of 2010 (“HIRE Act” or “Act”) which was signed into law by President Obama in 2020.

FATCA revolutionized international tax compliance of the world by forcing foreign banks to report their US-held accounts to the IRS. In essence, it created the third-party verification of foreign accounts that FBAR has always lacked. This third-party verification was supported on the other side by creation of a new requirement to report foreign assets by US taxpayers as part of their US tax returns – Form 8938.

Form 8938’s scope of disclosure is very broad. It generally includes two types of “specified foreign financial assets”: (a) any financial account (also defined very broadly) maintained by a foreign financial institution (again defined broadly); and (b) other specified foreign financial assets not held in an account maintained by a foreign institution.  Other Specified Foreign Financial Assets is a term with a reach far and beyond any other US international tax form, making Form 8938 a unique “catch-all” international tax reporting requirement.

2026 Form 8938 Threshold: Form 8938 is a Dangerous Form

The huge scope of Form 8938 presents a grave danger to US taxpayers, because US Congress armed the form with a wide range of penalties, including a $10,000 failure-to-file fee.  For these reasons, it is highly important to understand when a particular situation triggers the Form 8938 filing requirement. One of the most important filing criteria is the subject of this article — the 2026 Form 8938 filing threshold limits.

2026 Form 8938 Threshold: Filing Threshold Factors

When considering the Form 8938 threshold requirements, there are two most important factors that influence which filing threshold will apply in a particular situation. First, the filing status of the taxpayer(s): married filing jointly, married filing separately, single, et cetera.

The second factor is whether the taxpayer lives in the United States or lives abroad. 

2026 Form 8938 Threshold: Legal Test for Living Abroad

The IRS will agree that a taxpayer lives abroad if he meets one of the two “presence abroad” tests.

The first presence abroad test is satisfied if the taxpayer is a US citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period of an entire tax year.

The second presence abroad test is satisfied if the taxpayer is a US citizen or resident who is present in a foreign country or countries at least 330 full days during any period of twelve consecutive months in the relevant tax year.

Of course, these tests are almost exact replicas of the test for Foreign Earned Income Exclusion.

2026 Form 8938 Threshold: Taxpayers Living in the United States

Let’s first discuss the Form 8938 filing thresholds for taxpayers who live in the United States category by category:

Unmarried Taxpayers Living in the United States: the taxpayer is required to file Form 8938  if the total value of his specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during that tax year.

Married Taxpayers Filing a Joint Income Tax Return and Living in the United States: if the taxpayer is married and files joint income tax return with his spouse, Form 8938 must be filed if the spouses’ specified foreign financial assets are either more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the tax year.

Married Taxpayers Filing Separate Income Tax Returns and Living in the United States: if the taxpayer is married and lives in the United States, but files a separate income tax return from his spouse, then the reporting threshold is satisfied if the total value of his specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. Therefore, this category is very similar to that of the unmarried taxpayer who resides in the United States.

2026 Form 8938 Threshold: Taxpayers Living Abroad

Here are the Form 8938 filing thresholds for taxpayers who live abroad:

Married Taxpayers Filing a Joint Income Tax Return and Living Abroad: if the taxpayer lives abroad (as described above) and files a joint tax return with his spouse, then the reporting threshold is satisfied if the value of all specified foreign financial assets that the spouses own is either more than $400,000 on the last day of the tax year or more than $600,000 at any time during the tax year.

Taxpayers Filing Any Return Other Than Joint Tax Return and Living Abroad: if that taxpayer lives abroad and does not file a joint income tax return (instead he files a different type of tax return such as married filing separately, head of household or unmarried), then the reporting threshold is satisfied if the value of all specified foreign financial assets is either more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the tax year.

2026 Form 8938 Threshold: Specified Domestic Entity

Specified Domestic Entities are also required to file Form 8938. The filing threshold for a specified domestic entity is satisfied if the total value of such an entity’s specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.

Contact Sherayzen Law Office For Help With IRS Form 8938

The reporting requirements under Form 8938 can be very complex. Moreover, Form 8938 noncompliance often occurs in conjunction with noncompliance with FBAR and other reporting requirements (such as Forms 5471, 8621, 8865 et cetera).  In such cases, filing of a late Form 8938 is often should be done through an IRS offshore voluntary disclosure option in order to reduce additional IRS tax penalties.

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including Form 8938. We are highly experienced with Form 8938 issues, including offshore voluntary disclosures involving Form 8938.  We can help you!

Contact us today to schedule your confidential consultation!

FFI FATCA Requirements: Introduction | FATCA Tax Lawyer & Attorney

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Since July 1, 2014, the Foreign Account Tax Compliance Act (“FATCA”) has imposed a heavy compliance burden on Foreign Financial Institutions (“FFIs”). Many of these FFIs have struggled with developing a good understanding of their new FATCA requirements even to this day. In this brief essay, I want to provide a general overview of these FFI FATCA requirements so that readers can begin to develop an understanding of FATCA.

FFI FATCA Requirements: Background Information

FATCA was enacted into law in 2010. The most important idea behind the new law was to combat US tax noncompliance of US taxpayers with foreign financial assets.

There are several important parts of FATCA, but the most important one of them was forcing FFIs to identify US owners of foreign financial assets, collect certain information about them and share it with the IRS. Failure to do so meant facing a FATCA penalty in the form of a 30% withholding tax on the gross amount of all transactions with a noncompliant FFI. In essence, FATCA turned FFIs around the world into free IRS informants.

FFI FATCA Requirements: Three Categories

What precisely does FATCA require FFIs to do in order to be FATCA-compliant? If we look broadly at the FFI FATCA requirements, we can group all of these requirements into three broad categories. Each of these categories consists of a myriad of smaller but still fairly complex FATCA compliance requirements and requires a deep understanding of new FATCA terms.

The first and most important category of FATCA requirements is to collect the required due diligence information concerning all account holders, investors and payees. “Collecting” here means obtaining the required due diligence information and documentation. In other words, FATCA has to be part of an FFI’s “Know Your Client” (“KYC”) procedures.

Additionally, these new due diligence requirements apply not only to new customers, but also to pre-existing account holders. Pre-existing account holders are the account holders who already had accounts with an FFI as of the time FATCA was implemented (i.e. July 1, 2014) or sometimes a different date.

The second requirement is to report to the IRS three categories of persons: (a) all US account holders; (b) recalcitrant account holders; and © non-participating (i.e. FATCA-noncompliant) FFIs. This means that, under FATCA, FFIs must turn over to the IRS the identifying information concerning accounts held by US persons as well as point out the “bad apples” who refuse to comply with FATCA.

Recalcitrant account holders is a fairly complex FATCA term. In its most basic form, it refers to an account holder who does not supply the required FATCA information and who does not fall under any types of a waiver. In a future article, I will provide a more detailed description of this term, but, at this point, I would like to refer the readers to Treas Reg § 1.1471-5(g)(2).

Finally, the FFIs are charged with the requirement to coordinate FATCA withholding as necessary. In other words, the FFIs are required to impose FATCA noncompliance penalties on any FATCA non-compliant FFI, thereby turning FATCA in a worldwide self-enforcing system from which no FFI can escape.

FFI FATCA Requirements Are Interconnected

Needless to say that all three of these FFI FATCA requirements are deeply related to each other. For example, the due diligence requirement is essential to an FFI’s ability to properly comply with its FATCA reporting and withholding obligations. It is important to keep this connection between different FFI FATCA Requirements in mind while building an effective FATCA compliance system.

Contact Sherayzen Law Office to Find Out More About Your FFI FATCA Requirements

Sherayzen Law Office is a US international tax law firm that specializes in US international tax compliance, including FATCA compliance. We also help FFIs develop an effective FATCA compliance program as well as analyze existing FATCA compliance programs.

Contact Us Today to Schedule Your Confidential Consultation!

Specified Domestic Entity Seminar | International Tax Lawyer & Attorney

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On August 17, 2017, the owner of Sherayzen Law Office, Mr. Eugene Sherayzen, conducted a seminar on the new FATCA reporting requirement concerning Form 8938, specifically the new filing category of Specified Domestic Entities (the “Specified Domestic Entity Seminar”). Mr. Sherayzen is a highly experienced attorney who specializes in U.S. international tax compliance, including FATCA Form 8938. The Specified Domestic Entity Seminar was organized by the International Business Law Section of the Minnesota State Bar Association.

The Specified Domestic Entity Seminar commenced with the historical overview of FATCA. Then, it continued to analyze the three principal parts of FATCA (as relevant to the seminar), including Form 8938.

The next part of the Specified Domestic Entity Seminar focused on the filing requirements of FATCA, including the definition of the Specified Foreign Financial Assets. Mr. Sherayzen devoted considerable time to the exploration of various categories of Form 8938 filers and their respective filing thresholds. He explained to the audience that Form 8938 was previously required to be filed only by Specified Individuals. The tax attorney then stated that, starting tax years after December 31, 2015, a domestic corporation, partnership or trust classified as a Specified Domestic Entity was required to file Form 8938.

Having finished the review of the background information, Mr. Sherayzen proceeded to analyze the definition of Specified Domestic Entity. At this point, the Specified Domestic Entity Seminar turned very technical and analytical.

After stating the general definition of Specified Domestic Entity, the tax attorney divided the definition into various parts and analyzed each part in detail. In particular, the Specified Domestic Entity seminar covered the following topics: definition of “domestic” (as defined specifically for the purposes of domestic trusts and domestic business entities), Specified Foreign Financial Assets and the phrase “formed or availed of”.

As part of the analysis of the latter, Mr. Sherayzen discussed the Closely-Held Test and the Passive Tests with their varying applications to domestic trusts and domestic business entities. The tax attorney also discussed the highly unusual attribution rules within the context of the Closely-Held Test.

After the explanation of the Form 8938 filing threshold for Specified Domestic Entities, Mr. Sherayzen concluded the Specified Domestic Entity Seminar and opened the Q&A session.

Cyprus-Saudi Arabia Tax Treaty Signed | International Tax Lawyers

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On January 3, 2018, the “Convention for the Avoidance of Double Taxation with respect to Taxes on Income and for the Prevention of Tax Evasion between the Republic of Cyprus and the Kingdom of Saudi Arabia” or the Cyprus-Saudi Arabia Tax Treaty was signed in Riyadh, Saudi Arabia.

The Cyprus-Saudi Arabia Tax Treaty was signed during the official visit of the President of Cyprus to Saudi Arabia. On behalf of Cyprus, the treaty was signed by Mr. Ioannis Kasoulides, Minister of Foreign Affairs of the Republic of Cyprus. On behalf of the Kingdom of Saudi Arabia, the treaty was signed by Mr. Mohammad Abdullah Al-Jadaan, Minister of Finance of Saudi Arabia.

Cyprus authorities have stated that the Cyprus-Saudi Arabia Tax Treaty is based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital, and it includes the exchange of financial and other information in accordance with the relevant Article of the Model Convention.

The signing of the Cyprus-Saudi Arabia Tax Treaty comes at a very special time for Saudi Arabia as another eleven princes were arrested. It should be remembered that there were numerous arrests for corruption in November of 2017.

The signing of the Cyprus-Saudi Arabia Tax Treaty will strengthen the treaty networks of both countries. The exchange of information will also help Saudi Arabia to exercise better control the flow of funds from Saudi Arabia to Cyprus.

Moreover, the exchange of information between Saudi Arabia and Cyprus may also inadvertently lead to this information being turned over to the IRS through FATCA (i.e. this information may be disclosed to the IRS by Cyprus or any other FATCA-compliant country that obtains it from Cyprus through another exchange of information arrangement). Hence, there is an increased potential of the IRS discovery of noncompliance with US international tax provisions by Saudi Arabian citizens who are also US tax residents.

It should be noted that the Cyprus-Saudi Arabia Tax Treaty was only signed and it has not yet been ratified by either country.

Sherayzen Law Office will continue to monitor new developments with respect to the Treaty.

Happy New Year 2018 From Sherayzen Law Office

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Our team at Sherayzen Law Office wishes a very Happy New Year 2018 to our clients; colleagues at other law firms; judges of state and federal courts; our website blog readers; and our followers on Facebook, Twitter, YouTube and other social media.

Year 2017 was another highly successful year at Sherayzen Law Office. Our tremendous expertise and experience in US international tax law draws an ever-increasing number of clients from all over the world. We have expanded our client base at existing countries and added clients from new countries, bringing the total number of countries with our client assets to close to seventy. Additionally, we were asked to defend a case in federal court concerning FBAR penalties, successfully advised on expatriation cases and finalized a number of existing and new tax planning cases.

Our biggest success area, however, remains Offshore Voluntary Disclosures with the new highs for Form 3520, 5471 and 926 voluntary disclosures as well as FBAR/FATCA voluntary disclosures. FATCA-based cases were especially prolific with a significant variation in fact patterns and countries.

Furthermore, we have made an unprecedented effort to educate our clients as well as the general public about US international tax law. A combined record number of video posts and website blog posts were made available online. Additionally, Mr. Eugene Sherayzen, the owner and the principal attorney of Sherayzen Law Office, spoke at a large number of seminars in 2017, including outside of the United States.

In many ways, year 2017 was also a preparatory year for the new year 2018. We are closely following the rapid changes in US international tax law. The main changes are coming, of course, from the Tax Cuts and Jobs Act of 2017. The changes are enormous and will affect virtually every US taxpayer – both, individuals and businesses. We already started a series of articles on this topic. Please, continue to follow our blog in the new year 2018 to learn more about how the Act’s provisions may affect your tax situation.

It is also important to emphasize that, while the Tax Cuts and Jobs Act of 2017 will introduce the main changes in the new year 2018, some of its provisions are very relevant for the tax year 2017. In particular, the new income recognition rules for US Shareholders of foreign corporations (PFIC corporations are exempted from this provision) may impose a significant and unexpected tax burden on US taxpayers. Please, continue to follow our blog in the new year 2018 to learn more about these changes.

Equally important are the new IRS regulations that will be coming in the new year 2018. The IRS has announced that it intends to issue regulations that will target certain obscure areas of tax law which remain unregulated by the IRS or where the regulations are contradictory. In this context, it is particularly important to mention the interaction of PFIC rules with the Throwback Rule concerning distributions of a foreign trust’s UNI.

Finally, the IRS has also stated that it would announce sometime in the new year 2018 dramatic changes to Offshore Voluntary Disclosure options that exist right now. We have written a number articles on this topic and we have warned our readers that the current favorable environment may change dramatically with a potentially complete closure of the IRS OVDP program.

Sherayzen Law Office is a highly experienced law firm with a unique expertise in US international tax law. We have helped hundreds of US taxpayers around the world to bring and maintain their US tax affairs in full compliance with US tax laws while ethically and effectively reducing their penalties and tax burden. We can help You!

Contact Us Today to Schedule Your Confidential Consultation!