Form 8938 (FATCA) - Potential Fines for Not Filing Properly

Thanks for the info about Streamlined Filing Compliance Procedures. That sounds promising. Do you know if I need to hire a tax attorney for this process or can I handle it myself using tax software? Also, how do they determine if something was "non-willful" vs. intentional?

You can technically handle the Streamlined Filing yourself, but I'd recommend at least consulting with a tax professional who specializes in international compliance issues. The forms and procedures are complex, and mistakes can complicate your situation further. The IRS determines "non-willful" conduct based on your specific facts and circumstances. You'll need to provide a detailed statement explaining your failure to comply - typically things like not understanding the requirement, receiving incorrect advice, or being unaware of the connection between foreign accounts and US tax obligations. The key is to be thorough and honest in your explanation.

How exactly does taxr.ai work with foreign account statements? My bank in Germany provides statements in German - would it still be able to analyze those or does everything need to be in English?

I'm a bit skeptical about using automated tools for something as serious as FATCA compliance. Did you also consult with an actual tax professional, or did you rely solely on the software? I'm worried about trusting an algorithm with something that could potentially result in huge penalties.

The system actually handles foreign language documents pretty well. I had statements from a Japanese bank and it processed them without issues. They have some kind of translation capability built in, so German statements should work fine. Regarding professional help, I understand your concern about relying solely on software. I actually used the taxr.ai analysis as a starting point and then had a quick consultation with a tax pro who specialized in foreign accounts. The tax professional confirmed everything the software flagged was correct and actually commented that the analysis was quite thorough. It saved me hours of expensive consultation time by having everything organized before the meeting.

Wait, how does this actually work? The IRS phone lines are notoriously impossible to get through. Is this service actually able to get you past that somehow? Seems too good to be true.

Sounds like a scam honestly. No way some third-party service has special access to the IRS phone lines when millions of taxpayers can't get through. And even if you do get through, IRS phone reps often give conflicting information. I wouldn't trust advice about something as serious as FATCA penalties from a random phone rep.

It works by essentially waiting on hold for you. They have a system that continually calls the IRS and navigates the phone tree until they get a human, then they have the IRS agent call you directly. It's basically a super-powered auto-dialer that knows how to navigate the IRS phone system. Regarding getting conflicting information, that's actually a fair concern with any IRS phone advice. What I did was take detailed notes during my call, including the agent's ID number, and asked them to note our conversation in my file. While it's not a binding ruling, having documentation of the guidance you received from a specific agent can help demonstrate good faith compliance efforts if questions ever come up later.

Oh crap, I didn't realize these were two different forms! So I need to file both Form 8938 AND this FBAR thing? Are the Streamlined Filing Procedures mentioned above good for fixing both issues? This is getting more complicated than I thought.

Yes, they're completely separate forms filed with different agencies. Form 8938 goes to the IRS with your tax return, while the FBAR (FinCEN Form 114) is filed electronically with the Financial Crimes Enforcement Network, a bureau of the Treasury Department. The good news is that the Streamlined Filing Procedures cover both forms. When you use this program, you'll file the last 3 years of tax returns (including Form 8938 for each year) plus 6 years of FBARs. The certification statement you submit explaining your non-willful failure applies to both filing requirements, so you're addressing everything at once.

I've heard horror stories though. My colleague got hit with penalties for missing FATCA filings even though she didn't know about the requirement. Is it really true that they're lenient if you come forward voluntarily?

Your colleague's situation might have been different - there are various factors the IRS considers when applying penalties. The key difference is whether you proactively come forward through the Streamlined procedures versus waiting until the IRS discovers the non-compliance on their own. When you use the Streamlined Filing Compliance Procedures, you're essentially self-reporting and demonstrating good faith by voluntarily correcting the issue. This typically results in much more favorable treatment than cases where the IRS discovers unreported foreign assets through other means (like third-party reporting from foreign banks under FATCA). The certification statement you submit explaining your non-willful failure is crucial - it needs to clearly demonstrate that your non-compliance was due to negligence, inadvertence, or mistake rather than willful disregard. Cases where people get hit with harsh penalties usually involve evidence of intentional concealment or willful blindness to obvious reporting requirements.

This is exactly the kind of reassuring real-world experience I needed to hear! Your situation sounds almost identical to mine - similar account balances and the same "discovery through tax software" scenario. Quick question about the reasonable cause statement - how detailed did you get about your time abroad? I'm wondering if I should mention specific things like not receiving proper tax guidance from my employer in Singapore, or if I should keep it more general about being unaware of the requirement. Also, when you say it took 2 months to complete, was that mainly due to gathering documents or was the actual filing process itself time-consuming? I'm trying to plan out my timeline for getting this resolved. Thanks for sharing your experience - it's really helping calm my nerves about this whole situation!

I'm glad my experience is helpful! For the reasonable cause statement, I was fairly specific about my time abroad. I mentioned that my employer in Singapore didn't provide guidance about ongoing US tax obligations for foreign accounts, and that the local tax preparation services I used there focused only on Singapore tax requirements. I also noted that the foreign banks never mentioned any US reporting obligations when I opened the accounts. The IRS seems to appreciate detailed, factual explanations that show how a reasonable person could have been unaware of the requirements. Your Singapore employment situation is actually perfect context - many employers don't properly brief expat employees about complex US tax obligations like FATCA reporting. Regarding timeline, about 3 weeks was spent gathering and organizing documents (bank statements, account opening docs, etc.), and then another 5 weeks working through the actual forms and statements. The reasonable cause statement took the most time because I wanted to get it right. I also had a brief consultation with a tax professional to review everything before filing, which I'd recommend. One tip: start requesting historical statements from your Singapore banks now if you don't have them - international banks can take weeks to provide documentation, especially if accounts are closed.