IRS Enforcement Is Increasing for Foreign Accounts: What U.S. Expats Must Know in 2026
Why Foreign Account Reporting Is a Major Focus in 2026
IRS enforcement surrounding foreign accounts continues to increase in 2026. With expanded international data sharing and automated compliance systems, discrepancies are easier than ever to detect.
If you are a U.S. citizen living abroad, foreign account reporting is not optional. Even if no tax is owed, disclosure requirements still apply.
For a full overview of compliance obligations, review our guide to U.S. expat tax filing requirements.
The Two Key Reporting Requirements: FBAR and FATCA
Foreign account reporting is separate from filing your federal return.
FBAR (FinCEN Form 114)
If your total foreign account balances exceed $10,000 at any time during the year, you must file an FBAR.
Learn more about FBAR filing requirements and penalties before assuming your accounts are exempt.
Penalties for non-filing can be significant, even when the error was unintentional.
FATCA (Form 8938)
Form 8938 is filed with your tax return if foreign asset thresholds are met. These thresholds differ depending on whether you reside inside or outside the United States.
Our page on FATCA reporting for expats explains how Form 8938 differs from FBAR and when each applies.
Why Enforcement Is Increasing
Foreign financial institutions report account information directly to the IRS under FATCA agreements. Automated systems compare that data with filed returns.
If you are unsure whether your prior filings were complete, we also assist with late FBAR filings and prior year expat returns to restore compliance.
Why Professional Review Matters
Foreign account reporting is one of the most technical areas of expat taxation. Proper classification and reporting require specialized knowledge.
At Expatriate Tax Returns, we focus exclusively on U.S. expat tax preparation services, ensuring foreign disclosures are handled accurately and in full compliance.
If you have foreign bank accounts, investments, or overseas business interests, speak with a specialist before filing services, ensuring foreign disclosures are handled correctly and consistently.
FAQ: Foreign Account Reporting for Expats
Yes. FBAR is a reporting requirement, not a tax payment form.
You may still correct it. Filing late is usually better than not filing at all. Professional review is strongly recommended.
No. They are separate filings with different thresholds and filing locations.
In many cases, yes. Treatment varies depending on structure and country.
Yes. Under FATCA agreements, many foreign banks report account data directly to the IRS.
