FBAR & FATCA Reporting Checker

They're two separate reporting requirements that often apply at the same time:

• FBAR (FinCEN 114) is filed with the US Treasury / Financial Crimes Enforcement Network. It's a separate filing — not part of your tax return. It's filed electronically through the BSA E-Filing system.
• FATCA (Form 8938) is filed with the IRS and is attached to your Form 1040 tax return.

The thresholds are different, the filing methods are different, and the penalties are different — but if you have significant foreign accounts, you'll often need to file both.

Don't panic — you have options. The IRS offers programs to help taxpayers get caught up:

• Streamlined Filing Compliance Procedures — for taxpayers who can certify their failure to file was non-willful (not intentional). There are two tracks: Streamlined Domestic Offshore (for US residents) and Streamlined Foreign Offshore (for those living abroad, with no penalty).
• Delinquent FBAR Submission Procedures — if you only need to catch up on FBARs and have already reported all income.
• Reasonable Cause — you may avoid penalties if you can show reasonable cause for the late filing.

The most important thing is to come into compliance. Penalties for willful non-filing are severe, but the IRS treats voluntary disclosure much more favorably. A qualified advisor can help you determine the best path.

The conversion rules differ by form:

• FBAR: Use the US Treasury exchange rate for December 31 of the reporting year. For the maximum value during the year, use the highest exchange rate during the year that would produce the highest USD value.
• FATCA (Form 8938): Use the IRS year-end exchange rate for the end-of-year balance. For the maximum value, use the exchange rate on the date of the maximum value.

For Israeli accounts: The NIS → USD conversion should use the Bank of Israel representative rate. You can find historical rates at the Bank of Israel website.

A PFIC (Passive Foreign Investment Company) is a foreign-based corporation that meets certain income or asset tests. Most Israeli mutual funds, money market funds, and sub-accounts within pension and provident funds are classified as PFICs.

If you own even one share of a PFIC, you're required to file Form 8621 for each PFIC — there's no minimum balance. The tax treatment of PFICs is generally unfavorable unless you make certain elections (like a QEF or Mark-to-Market election).

This is one of the more complex areas of US-Israel cross-border tax — working with a knowledgeable advisor is highly recommended.

Israeli retirement accounts (keren pensia, kupat gemel, keren hishtalmut, etc.) can trigger multiple US reporting requirements:

• FBAR & FATCA — yes, these accounts must be reported if you meet the thresholds.
• PFIC — the underlying investments in these accounts are often PFICs (Israeli mutual funds).
• Form 3520/3520-A — under some interpretations, Israeli pension and provident funds may be treated as foreign trusts, which require separate reporting. This is a complex and evolving area.

The US-Israel tax treaty may provide some relief, but the reporting requirements generally still apply. Consult a cross-border tax specialist.