FBAR, FATCA, and Form 8938 Reporting Advice for Americans Living in France

Oct 28, 2017

In this post, the FBAR Wiz will provide a targeted overview of helpful tax advice related to the FBAR, FATCA, and Form 8938 reporting advice for American expats living in France. First it is important to emphasize the difference between FBAR and FATCA.  While both of these require you to report certain foreign financial accounts and assets on your US expat taxes, they differ greatly: the FATCA Form 8938 will be filed with your expat tax return (i.e., U.S. tax return) and submitted to the IRS, but your FBAR will be filed with the US Treasury Department. Also, the filing threshold for Form 8938 is much higher than the FBAR, as it starts out at $200,000 USD for US expats and goes up to $600,000 USD, depending on your filing status. Whereas, an FBAR is required if your foreign bank accounts exceed $10,000 USD at any point during the tax year. 2015 Passport Revocation Law The passport revocation law, which went into effect late in 2015, permits the U.S. State Department to revoke the passport of any U.S. citizen owing more than $50,000 USD to the IRS. At first blush, that amount of tax debt may seem hard for the average person to exceed, but it's actually quite easy for interest and penalties to accrue while living overseas as an expat. For example, failing to file FATCA Form 8938 incurs a penalty of $10,000 USD and increases for continued failure to file. If an expat wasn't aware of their filing obligations for Form 8938, it's easy to see how interest and penalties can add up quickly! That is why it is so important to stay on top of your tax filing and bank account reporting obligations, so you won't have to worry about being penalized or worse, having your passport revoked. Specific Advice for U.S. Expats Living in France As a US expat in France, there are a few things you should be aware of the following regulations. You must meet one of three qualifications to be considered a French resident:

  1. Your primary home or residence is located in a French territory, and you must spend more than 183 days in France or more time in France than any other country.
  2. Your primary employment or profession is derived from France.
  3. France is the place of your center of economic activity.

Note that France taxes “family units,” and a married couple will be required to file a joint tax return. Also, there is a special tax regime for foreign nationals on temporary assignment in France if the individual hasn't been a resident of France in the five years preceding his or her arrival and he or she must not be assigned to live in France for more than six years. Deadlines In the United States, while a majority of citizens are focusing on the April 18th tax deadline, United States expats actually receive an automatic two-month extension until June 15th to file their taxes. There is also the option for an additional extension, making the final tax deadline October 16th. Despite the extended deadline for expats, it is important to note that any taxes owed to the IRS will still be due by April 18th, or interest will accrue until the tax bill is paid. If you're unsure whether you'll owe taxes, you can estimate your amount due by working with an expat tax professional or using tools on the IRS website. The deadlines for filing state taxes will vary on a state-by-state basis, so it's important to research the requirements of your specific state in order to stay on top of the deadline. To avoid missing any deadlines, you should check out the free and anonymous FBAR Wiz app to learn if you must report offshore assets and/or offshore accounts to the IRS. If you enjoyed this post, the FBAR Wiz recommends a related blog post exploring if and how FBAR debt may transfer upon death in the recent case of U.S. v. Park, Case No. 16C10787.