§6038D Information with Respect to Foreign Financial Assets

Summary

You must attach information to your yearly U.S. tax return if you own any specified foreign financial assets and the total value of those assets is more than $50,000 (or a higher amount the Treasury Department sets). Specified foreign financial assets include foreign bank or brokerage accounts; stocks or securities from non‑U.S. issuers; investment contracts or instruments with non‑U.S. issuers or counterparties; and interests in foreign entities. For each asset you must give identifying details (for accounts: the financial institution’s name, address, and account number; for securities: the issuer’s name, address, and the class; for other instruments: identifying info and the names and addresses of issuers or counterparties) and the highest value the asset reached during the year. If you do not give the required information you must pay a $10,000 penalty. If the failure continues more than 90 days after the IRS mails a notice, you pay another $10,000 for each 30‑day period (or part of one), up to $50,000 more. If the Treasury finds you have foreign assets but you don’t show their value, those assets will be treated as worth over $50,000 for penalty purposes. The rules can apply to some domestic entities the Treasury names. No penalty will be charged if you can show the mistake was due to reasonable cause and not willful neglect, but fear of foreign penalties for disclosure is not reasonable cause. The Treasury Department will write rules and may create exceptions, including for certain asset types, nonresident aliens, and bona fide residents of U.S. possessions.