Tax
FATCA
Also known as: Foreign Account Tax Compliance Act, FATCA Reporting
FATCA (Foreign Account Tax Compliance Act, Title V of the HIRE Act of 2010) created two parallel reporting obligations:
• Foreign Financial Institution (FFI) reporting: banks, brokerages, insurance companies, and investment funds outside the US must register with the IRS and report account information on US-person accounts annually, OR face 30% withholding on US-source payments. Most foreign banks comply. The practical side effect for US expats has been pervasive: many foreign banks refuse to open accounts for US citizens at all to avoid the compliance overhead. Switzerland, France, Germany, and Singapore have all seen this pattern.
• Individual reporting on Form 8938: US persons (citizens, green card holders, certain non-resident aliens) must file Form 8938 with their Form 1040 if their total foreign financial assets exceed thresholds. For expats living abroad: $200,000 single / $400,000 joint at year-end, OR $300,000 single / $600,000 joint at any time during the year. For US-resident filers: $50,000 single / $100,000 joint at year-end. Reportable assets include foreign bank accounts, brokerage accounts, foreign mutual funds, foreign pension plans, foreign-issued life insurance, ownership of foreign entities, and foreign-issued bonds.
FATCA Form 8938 is separate from and additional to FBAR (FinCEN Form 114), which has its own thresholds ($10,000 aggregate at any point in the year) and reporting channel (FinCEN, not IRS). Many expats are subject to BOTH forms.
For non-compliant filers, the IRS Streamlined Filing Procedure provides a path to come into compliance without criminal exposure (for most cases) and with reduced or zero penalties — but only if the IRS has not yet contacted the taxpayer about the non-compliance. The Streamlined Procedure has filed back 3 years of 1040s + 6 years of FBARs as the standard remedy.
Sources
Last factual review: 2026-05-08.
Related terms
FBAR
FBAR is the Foreign Bank Account Report (FinCEN Form 114) that US persons file annually if the aggregate value of their foreign financial accounts exceeded $10,000 at any point during the year. Filed electronically with the Treasury Department's FinCEN (not the IRS), separate from Form 1040. Penalties for wilful non-filing can reach 50% of the account balance per year. Due date: 15 April with automatic 6-month extension.
IRS Streamlined Filing Compliance Procedure
The IRS Streamlined Filing Compliance Procedure is the standard remedial pathway for US persons who failed to file FBARs, Form 8938, or income tax returns reporting foreign income — provided their non-compliance was non-wilful. The Streamlined Foreign Offshore Procedure (SFOP), for taxpayers living abroad, requires 3 years of amended/late tax returns + 6 years of FBARs + a non-wilfulness statement. Penalty: zero on SFOP if non-wilfulness is established.
FEIE (Foreign Earned Income Exclusion)
FEIE lets US citizens and resident aliens exclude up to $132,900 (2026) of foreign-earned income from US federal income tax — but not from Social Security/self-employment tax. To qualify, the taxpayer must meet either the Bona Fide Residence Test (full-year tax residence in a foreign country) or the Physical Presence Test (330 full days abroad in any 12-month period). Claimed on IRS Form 2555 attached to Form 1040.
CRS (Common Reporting Standard)
CRS is the OECD's global financial-account reporting standard, in force since 2017 across 120+ jurisdictions. Banks and other financial institutions in participating countries automatically report account-holder information (name, address, tax IDs, balance, interest, dividends) to the holder's country of tax residence. The US is NOT a CRS participant but operates the parallel FATCA programme bilaterally.
Deeper guides
FBAR & FATCA 2026: Complete Compliance Guide for US Expats (Penalties, Deadlines, Banking)
Every US person with $10,000+ in foreign accounts must file FBAR. Penalties up to $165,353 for willful violations. FATCA Form 8938 thresholds, FATCA-friendly banks by country, amnesty programs for late filers, and the 2026 enforcement landscape.
FEIE vs. Foreign Tax Credit in 2026: Which Saves You More? ($132,900 Exclusion)
2026 FEIE raised to $132,900. Compare the Foreign Earned Income Exclusion and Foreign Tax Credit with worked examples by income level. Includes FBAR and FATCA requirements.
Americans Moving Abroad: 8 Things Nobody Tells You
The hidden challenges of moving abroad — FATCA banking issues, disappearing credit scores, Social Security, voting, and reverse culture shock.
Expat Banking 2026: Which US Banks Won't Close Your Account Abroad?
Schwab and Fidelity won't close your account abroad — most US banks will. Plus: Wise vs banks (0.5% vs 3-5%), opening accounts in 20 countries, and FBAR/FATCA filing.
ImmigrationOS: How Palantir's $30M ICE Contract Changes Visa Compliance in 2026
ICE awarded Palantir a $30M April 2025 contract to build ImmigrationOS — a unified platform joining IRS, SSA, DMV, passport, and license-plate-reader data. Prototype delivered Sept 25 2025; contract runs through Sept 2027. Practical implications for US citizens abroad, green card holders, H-1B/NIV holders, and N-400 applicants. Five-item 2026 compliance checklist.