Especially since 9/11, the federal government keeps a close eye on monies, assets and accounts held by American citizens that come from foreign countries. In order to determine whether a Massachusetts resident or entity must file a Report of Foreign Bank and Financial Accounts and/or IRS Form 8938, a party must review the FBAR requirements and the reporting requirements of the IRS. Having to file one may not mean having to file the other, depending on the circumstances.
Making that determination may come down to the amount of funds in question. For instance, a FBAR comes with a minimum threshold of $10,000 during the calendar year. This is not $10,000 per account, but instead the total amount across all accounts.
When determining whether to file Form 8938, an individual or entity must again look at the amounts involved. For instance, a single individual must file this form if the total amount reaches $75,000 at any point during the calendar year or if it reaches $50,000 by the last day of the year. Those amounts double for married couples filing jointly. These amounts would also mean that a FBAR is most likely required as well.
The amount of the assets is only one of the Form 8938 and/or FBAR requirements that determine whether one or both forms are required. As with most other governmental and taxation requirements, it can be a challenge to decipher them and make sure that a Massachusetts residents remains in compliance. Most people find it helpful to review the situation with an experienced tax attorney in an attempt to avoid any complications or violations.