2023 FBAR and FATCA Compliance: Offshore Account Disclosure Rules Remain Unchanged from Last Year

The rules for FBAR and FATCA compliance are remaining unchanged for 2023. This means that U.S. taxpayers who own offshore accounts must assess their filing obligations as they have in years past, and they must file an FBAR, IRS Form 8938 or both if the aggregate value of their offshore accounts exceeds the relevant disclosure threshold(s).

FBAR and FATCA Filing Thresholds for 2023

While the FBAR and FATCA filing requirements both pertain to offshore accounts (though FATCA applies to other “foreign financial assets” as well), they are not the same. One of the most significant differences is the filing threshold. The FBAR and FATCA filing thresholds are remaining unchanged for 2023:

• FBAR Filing Threshold – U.S. taxpayers (residing domestically or abroad) must file an FBAR in 2023 if the aggregate value of their offshore accounts exceeded $10,000 at any point in 2022.
• FATCA (IRS Form 8938) Filing Threshold – U.S. taxpayers residing domestically must file IRS Form 8938 in 2023 if the total value of their foreign financial assets (including, but not limited to, offshore accounts) exceeded $50,000 at the end of the year or $75,000 at any point in 2022. The thresholds increase to $200,000 and $300,000, respectively, for taxpayers residing abroad.

FBAR and FATCA Filing Deadlines for 2023

The FBAR and FATCA filing deadlines are also remaining unchanged for 2023. FBARs are always due on April 15, while U.S. taxpayers must file IRS Form 8938 with their annual returns (this year’s due date is April 18, 2023). However, all filers receive an automatic six-month extension for both filings.

FBAR and FATCA Rules for Cryptocurrency in 2023

In 2020, the Financial Crimes Enforcement Network (FinCEN) issued Notice 2020-2, in which it stated, “[A]t this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency).” While Notice 2020-2 also indicated that FinCEN intends to revise the FBAR rules to make cryptocurrency accounts reportable, it has not done so as of January 2023.

The rules regarding cryptocurrency and FATCA compliance are slightly less clear. As a result, U.S. taxpayers who have cryptocurrency in offshore accounts should consult with their tax counsel to determine their disclosure obligations.

What if You Didn’t File an FBAR or IRS Form 8938 in 2022?

If you were required to file an FBAR or IRS Form 8938 (or both) in 2022 and failed to do so, this is not a mistake you can ignore. FBAR and FATCA violations carry steep penalties—including criminal penalties in some cases. Depending on the circumstances involved, you may need to submit a streamlined filing or a voluntary disclosure, and you will need to consult with tax counsel to make sure you choose the correct option.

Contact Thorn Law Group in New Jersey

If you have questions or concerns about your offshore account disclosure obligations in 2023, we can help. To request a confidential consultation with tax attorney Kevin E. Thorn, Founding Partner of Thorn Law Group, please call 201-842-7696, email ket@thornlawgroup.com or inquire online today.