Americans living in Canada face two separate US foreign account reporting obligations that operate in parallel: the Report of Foreign Bank and Financial Accounts (FBAR, filed on FinCEN Form 114) and the Foreign Account Tax Compliance Act (FATCA, reported on IRS Form 8938). Both require disclosure of foreign financial accounts, but they have different thresholds, different filing agencies, and different penalty regimes. Missing either one triggers penalties that can exceed the value of the accounts themselves.
If you are a US citizen or green card holder living in Canada, understanding the difference between FBAR and FATCA is not optional — it is a prerequisite for staying compliant. TYM's [cross-border tax specialists](/services/cross-border-tax) prepare both filings as part of every US expat tax engagement.
What Is the FBAR (FinCEN 114)?
The FBAR is filed with the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department — not with the IRS. It is due on April 15 each year, with an automatic extension to October 15. The FBAR is required when the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the calendar year.
The $10,000 threshold is aggregate, not per account. If you have three Canadian accounts each holding $4,000, the aggregate is $12,000 — all three accounts must be reported. The FBAR captures bank accounts, investment accounts, RRSPs, RRIFs, TFSAs, and certain other financial accounts held at foreign institutions.
FBAR penalties are severe. Non-willful violations carry a penalty of up to $10,000 per violation per year. Willful violations carry a penalty of the greater of $100,000 or 50% of the account balance per violation per year. The IRS has pursued FBAR penalties aggressively since 2010.
What Is FATCA (Form 8938)?
FATCA is reported on Form 8938 (Statement of Specified Foreign Financial Assets), which is filed with your US federal income tax return (Form 1040). Unlike the FBAR, Form 8938 is filed with the IRS. The reporting thresholds are higher than FBAR and depend on your filing status and whether you live inside or outside the US.
For Americans living abroad (which includes Canadians), the Form 8938 thresholds are: $200,000 on the last day of the tax year, or $300,000 at any point during the year (for single filers). For married filing jointly, the thresholds are $400,000 and $600,000 respectively. These higher thresholds reflect the reality that Americans abroad often hold significant assets in their country of residence.
Form 8938 captures a broader range of assets than the FBAR: foreign bank accounts, foreign investment accounts, foreign pension plans, interests in foreign entities, and certain foreign financial instruments. The penalty for failing to file Form 8938 is $10,000, with an additional $10,000 for each 30-day period of non-compliance after IRS notification, up to $50,000.
Key Differences Between FBAR and FATCA
The most important practical difference is that FBAR and FATCA are filed separately, with different agencies, on different forms, with different thresholds. An account that must be reported on the FBAR may or may not need to be reported on Form 8938, depending on the value thresholds. An account that meets the Form 8938 threshold will almost always also require FBAR reporting.
The FBAR captures accounts where you have a financial interest or signature authority — including accounts you control but do not own, such as a business account you are authorized to sign on. Form 8938 focuses on accounts where you have a financial interest, not mere signature authority.
Canadian Accounts That Must Be Reported
For Americans living in Canada, the most commonly reportable accounts are: Canadian bank accounts (chequing, savings, GICs), Canadian brokerage and investment accounts, RRSPs and RRIFs (both FBAR and Form 8938), TFSAs (both FBAR and Form 8938 — note that TFSAs do not receive the same treaty deferral as RRSPs), Canadian pension plans, and interests in Canadian corporations or partnerships.
RRSPs and RRIFs receive special treatment under the US-Canada tax treaty. US citizens in Canada can elect to defer US taxation of RRSP/RRIF income until distribution, but this election must be made on Form 8891 (now reported on Form 8938 with an election statement). The election is not automatic — it must be affirmatively claimed. TYM's [Canadian tax for US citizens](/services/cross-border-tax/canadian-tax-for-us-citizens) service covers this election as part of every engagement.
The Streamlined Filing Compliance Procedures
Americans who are behind on FBAR and FATCA filings due to non-willful conduct can use the IRS Streamlined Filing Compliance Procedures to catch up with reduced penalties. The Streamlined Foreign Offshore Procedures (for Americans living outside the US) require filing 3 years of amended returns and 6 years of FBARs, with a 5% penalty on the highest aggregate balance of unreported accounts. This is significantly less than the standard FBAR penalty regime.
TYM has guided numerous US citizens in Canada through the Streamlined Procedures. The key is acting before the IRS contacts you — once an examination begins, the Streamlined Procedures are no longer available.
How TYM Handles FBAR and FATCA Compliance
TYM prepares both FinCEN 114 and Form 8938 as part of every US expat tax return engagement. We identify all reportable accounts, calculate the correct aggregate values, and apply the appropriate treaty elections. For clients with unfiled prior years, we assess whether the Streamlined Procedures are appropriate and manage the catch-up filing process.
If you are a US citizen or green card holder living in Canada and are not current on FBAR and FATCA filings, [contact TYM](/get-free-consultation) for a confidential assessment of your situation.
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