Navigating U.S. Foreign Reporting Requirements: What Taxpayers Need to Know

As more U.S. taxpayers expand their financial footprints beyond U.S. borders by investing overseas, working abroad, or operating international businesses, foreign reporting requirements have become an increasingly important part of tax compliance.

What often surprises taxpayers is that these rules are largely informational. In many cases, no additional tax is owed. However, missing a required filing can still result in significant penalties, sometimes starting at $10,000 per form. Understanding which filings apply to you is the first step toward staying compliant.

Below is a high-level overview of some of the most common U.S. foreign reporting forms.

Foreign Reporting Requirements for Individuals

FinCen Form 114 (FBAR)

Foreign Bank Account Report

This form applies to U.S. persons, including citizens, residents, and certain entities, who have a financial interest in or signature authority over foreign financial accounts.

An FBAR must be filed if the combined value of all foreign financial accounts exceeds $10,000 at any point during the calendar year, even if the threshold is only exceeded for a single day.

Form 8938

Statement of Specified Foreign Financial Assets

Form 8938 is filed with your federal tax return and applies to certain individuals (and in some cases domestic entities) who hold specified foreign financial assets above certain thresholds.

Thresholds for single filers:

• $50,000 at year-end
• $75,000 at any time during the year

**Higher thresholds apply for joint filers and taxpayers living abroad.

Form 3520

Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

This form is required for U.S. persons who receive substantial gifts or bequests from foreign individuals or entities, or who engage in transactions with foreign trusts.

You may need to file if you:

• Receive gifts or bequests from a foreign individual exceeding $100,000
• Receive more than $20,573 (2026 threshold) from a foreign corporation or foreign partnership
• Have transactions involving a foreign trust

Foreign Reporting Requirements for Businesses

Form 5471

Information Return of U.S. Persons With Respect to Certain Foreign Corporations

This form applies to U.S. shareholders of certain foreign corporations, including individuals who:

• Own 10% or more of a foreign corporation
• Serve as officers or directors when U.S. ownership changes occur

Form 926

Return by a U.S. Transferor of Property to a Foreign Corporation

Form 926 is required when a U.S. person transfers property, including cash, to a foreign corporation in certain nonrecognition transactions.

This filing is generally triggered when:

• More than $100,000 of cash or property is transferred during the year or
• The transfer results in 10% or greater ownership in the foreign corporation

Form 5472

Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business

This form applies to:

• U.S. corporations that are at least 25% foreign-owned
• Foreign corporations engaged in a U.S. trade or business that have reportable transactions with related parties

Form 8865

Return of U.S. Persons With Respect to Certain Foreign Partnerships

U.S. persons with interests in foreign partnerships may need to file Form 8865 if they:

• Control the partnership
• Own at least 10% of a partnership that is U.S.-controlled
• Engage in certain reportable transactions with the partnership

Why This Matters

Foreign reporting requirements are complex, and they often overlap. While these forms are primarily informational, the penalties for noncompliance can be significant, even when no tax is due.

If you’re unsure whether a filing requirement applies to your situation, it’s important to address the question proactively. Working with a knowledgeable tax professional can help you identify your filing obligations, avoid costly penalties, and ensure compliance as your global activities grow.