In the FATCA form, you will be expected to provide information about all of your eligible foreign financial assets. You can find the actual form, along with official instructions, on the official IRS form page. The instructions offer detailed, line-by-line explanations of the form, and guidance on how to determine:
What type of assets need to be reported
How to calculate the value of these assets
Deadline:
The report needs to be submitted as an attachment to your annual tax return:
In 2024, the personal income tax return deadline is April 15.
Expats receive an automatic 2-month extension to June 17 (because June 15 falls on Saturday).
Preparation:
We suggest you allocate adequate time to gather and prepare the necessary details about your assets – most importantly, the maximum value in the calendar year of eligible assets.
Other details you’ll need to provide include (but are not limited to):
Whether the account was opened or closed in the current year
Whether the account is held jointly or solely by you
Whether the account is a deposit account or a custodial account
Important: Even with the official instructions, preparing your form correctly can still be quite challenging and time-consuming. If in doubt about any requirements, consulting a qualified tax professional can save you significant time and money – mistakes on your FATCA filing can be costly.
Note: If you're a dual-status taxpayer, FATCA reporting requirements can be especially complex! We strongly advise seeking professional help to effectively navigate this situation.
What happens if I don’t submit my FATCA, or if I submit incorrect information on my FATCA?
FATCA imposes severe penalties for non-compliance. Failure to report foreign financial assets can result in substantial fines, ranging from USD 10,000 to USD 50,000. Criminal penalties may apply for willful violations, including imprisonment.
Failure to File and Continuing Failure to File
If you are required to file a FATCA form but fail to do so or miss the deadline, you may be subject to a penalty of USD 10,000. If you do not submit your FATCA form within 90 days after the IRS mails you a failure-to-file notice, you may be subject to an additional penalty of USD 10,000 for each 30-day period thereafter, up to a maximum of USD 50,000.
Presumption of Maximum Value
If you provide incorrect or incomplete information about the value of one or more of your assets, the IRS will assume its value is GREATER than your reporting threshold, and calculate penalties based on that value.
Reasonable Cause Exception
If you forgot to file your FATCA unintentionally or made a mistake on your form, don’t sweat too much. No penalty will be imposed if your failure is due to reasonable cause and not to willful neglect. Keep in mind that in such a case, you would be expected to demonstrate and support your reasonable cause claim.
Depending on your situation, you may also be eligible to participate in the Streamlined Filing Compliance Procedures program offered by the IRS.
Other Penalties & Statute of Limitations
You may also be subject to financial penalties for underpayment of taxes linked to incorrect FATCA filings, ranging from 40 to 75% of the underpayment amount.
The statute of limitations for failing to report a foreign financial asset is 3 years from the date you filed the relevant FATCA form.
The statute of limitations on penalties for failing to report income related to your foreign assets is 6 years from the date you filed the relevant return.
How can I get help with preparing my FATCA form?
We understand how stressful, and frustrating, it can be to deal with complex tax reporting obligations like the FATCA and FBAR, and we’re here to help. In addition to standard tax filing and preparation services, the experts at Del Sol CPA and Associates are more than happy to offer you assistance with filing a timely and compliant FATCA form each year with your tax return.
If you have any questions or are seeking guidance, please don’t hesitate to reach out to our bilingual team of trained tax professionals for answers. We look forward to serving you!
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