March 8, 2012

Who is a ‘specified’ person?

The IRS has defined a “specified” person as one of the following:

  • U.S. citizen
  • Resident alien of the United States for any part of the tax year
  • Nonresident alien electing to be treated as a resident alien in order to file a joint tax return
  • Nonresident alien who is a bona fide resident of American Samoa or Puerto Rico

At this time, only individuals are required to file Form 8938. The IRS anticipates issuing regulations that would extend the reporting requirements to entities, including corporations, partnerships and trusts.

A specified person must file Form 8938 even if the assets do not affect the individual’s tax liability for the year. An exception to filing Form 8938 occurs if the individual is not required to file an income tax return, regardless of whether the reporting thresholds are met.

What is a ‘specified’ foreign financial asset?

Specified foreign financial assets include financial accounts maintained by a foreign financial institution. They may also refer to any of the following foreign financial assets if they are held for investment but not held in an account maintained by a financial institution:

  • Stock or securities issued by a non-U.S. person
  • Any interest in a foreign entity
  • Any financial instrument or contract issued by a non-U.S. person

There are exceptions to reporting certain assets, such as securities or commodities subject to the mark-to-market rules for dealers.

What are the reporting thresholds?

The reporting thresholds vary depending upon filing status and country of residency. The following chart summarizes the values of specified foreign financial assets that would trigger a reporting requirement.


Marital Status 
Value at End of Year – OR 
Value at Any Time During Year 

Single or married, filing separately 

Married, filing jointly 

Single or married, filing separately 

Married, filing jointly 


What penalties apply?

The penalty for failure to file Form 8938 is substantial, as is the case with most foreign reporting requirements. An individual who does not file a complete and correct Form 8938 by the due date may be subject to a fine of $10,000. Additional penalties may be incurred for continuing to fail to file after IRS notification.

What reporting requirements does this form duplicate?

The Form 8938 overlaps the information required to be reported on TDF 90-22.1, which is a Treasury Department Form. The TDF 90-22.1 is filed separately and is due by June 30 for reporting requirements of the prior calendar year. Consequently, individuals may report the same information twice – once in a separate filing and again as an attachment to their tax return.

They do not have to report a specified foreign financial asset on Form 8938 if they report it on other forms, such as Forms 3520, 5471, 8621, 8865 or 8891. Instead, they identify on Form 8938 the other type of form on which the asset was reported.

This tax tip contributed by:

Tamara Campfield, CPA, MT 
Bradley Consulting Group, PC 
Lakewood, Colo. 

This article was originally posted on March 8, 2012 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at