Individuals must report any financial assets they hold outside of the United States to comply with FACTA, or the Foreign Account Tax Compliance Act, states the Internal Revenue Service. Taxpayers report assets using IRS Form 8938, Statement of Specified Foreign Financial Assets, when filing their income tax return.Continue Reading
Reporting is mandatory if foreign assets exceed $50,000, as of 2015, states the IRS. The reporting threshold is $200,000 in foreign assets for U.S. taxpayers living abroad. However, if an individual does not have to file an income tax return, they do not need to report their foreign assets. Foreign assets only need to be reported once. Therefore, items such as foreign trusts or corporations that are reported on other tax forms do not need to be included in Form 8938.
FACTA also requires many foreign banks, financial institutions and investment brokers to report accounts held by U.S. taxpayers. If an individual fails to report foreign assets, he may be fined $10,000, states the IRS. If the taxpayer doesn't file Form 8938 after being notified to do so by the IRS, he faces an additional $50,000 fine.
Individuals must also report any foreign bank accounts with a value of $10,000 or more at any time during the year using FinCEN Form 114, Report of Foreign Bank and Financial Accounts, states the IRS.Learn more about Taxes