Form 8938 (FATCA) for U.S. Citizens in Colombia

Two statutes, two forms, two thresholds

Among U.S. citizens who relocate to Colombia and discover they are now caught in two simultaneous tax systems, Form 8938 is reliably the second-most-common surprise after the FBAR. The first surprise is that the United States taxes citizens on worldwide income regardless of where they live. The second is that there are two overlapping foreign-asset disclosure regimes, both of which can apply to the same Bancolombia checking account in the same year — and missing either one carries its own independent penalty stack.

Even tax-literate clients routinely conflate the two. They are administered by closely-related agencies inside Treasury, they ask broadly similar questions, and they sound like duplicates. They are not. Form 8938 (the Statement of Specified Foreign Financial Assets) sits in Title 26 of the U.S. Code at IRC §6038D, was enacted as part of the Foreign Account Tax Compliance Act (FATCA) in 2010, and is filed with your Form 1040 as an income-tax disclosure. The FBAR (FinCEN Form 114) sits in Title 31 under the Bank Secrecy Act, is filed separately with FinCEN, and is fundamentally an anti-money-laundering instrument. Different statutes. Different agencies. Different thresholds. Different penalties.

The practical effect for a Colombian-resident U.S. citizen: you can need one without the other, both at once, or neither. Most expats with meaningful Colombian financial life end up filing both. The remainder of this guide unpacks when, how, and what happens when the filings go wrong.

2026 Form 8938 thresholds for Colombian residents

FATCA's reporting thresholds split sharply along residence lines. The statute distinguishes between U.S. taxpayers living in the United States and those living abroad, and gives the latter group dramatically higher floors. For a U.S. citizen to qualify for the higher "living abroad" thresholds under Treas. Reg. §1.6038D-2(a)(3), their tax home must be in a foreign country and they must satisfy either the bona fide residence test or the physical presence test of IRC §911 — the same residency tests used for the Foreign Earned Income Exclusion. Colombian residents who have been on the ground for a full tax year almost always qualify; new arrivals in the first calendar year of their move sometimes do not, and must apply the lower domestic thresholds.

Two important features. First, these thresholds are not inflation-indexed. They are statutory floors hard-coded into IRC §6038D and Treas. Reg. §1.6038D-2; they have not changed since FATCA's enactment and will not change without legislative action. Second, the test is a two-pronged maximum: you file if the aggregate value of your specified foreign financial assets exceeds either the end-of-year threshold or the at-any-time-during-the-year threshold. A single-day spike — say, a brokerage transfer that lands on July 12 and clears out by July 14 — can trigger filing even if your December 31 balance is comfortably below $200,000.

Married couples filing separately use the single-filer thresholds. Married couples filing jointly use the MFJ thresholds and file a single Form 8938 covering the aggregate of both spouses' specified assets. Couples in which one spouse is a non-resident alien — a common configuration for a U.S. citizen married to a Colombian national — typically file MFS (and so use the lower single thresholds) unless an election under IRC §6013(g) has been made to treat the non-resident spouse as a U.S. resident.

What counts as a specified foreign financial asset

The reportable universe under FATCA is broader than the FBAR's universe of "foreign financial accounts." A specified foreign financial asset under Treas. Reg. §1.6038D-3 includes any financial account maintained by a foreign financial institution, plus certain other foreign assets held for investment that are not maintained in a financial account. For a Colombian-resident U.S. citizen the most common reportable items are:

• Colombian deposit and custodial accounts — current and savings accounts (cuenta corriente, cuenta de ahorros), CDTs, and brokerage cash at Bancolombia, Davivienda, BBVA Colombia, Banco de Bogotá, Banco de Occidente, Scotiabank Colpatria, Itaú Colombia, and the like.
• Brokerage accounts at Colombian comisionistas de bolsa — Credicorp Capital, Acciones y Valores, Casa de Bolsa, Alianza Valores, Valores Bancolombia.
• Stock or any equity interest in a Colombian SAS, SA, or Ltda. held directly — this is the FATCA-vs-FBAR divergence point. Directly-held foreign stock is a specified foreign financial asset under §1.6038D-3(b)(1)(ii) even though it is not a foreign bank account. FBAR generally does not capture it.
• Interests in fondos de inversión colectiva (FICs) and units in Colombian fideicomisos / fiducias mercantiles.
• Colombian life-insurance policies with cash value and annuities issued by a Colombian insurer.
• Cesantías balances held at Porvenir, Protección, Colfondos, or Skandia, and AFP (mandatory and voluntary pension) balances at the same managers.
• Colombian-issued bonds — TES (Títulos de Tesorería), corporate bonds, and other debt instruments held outside a custodial account at a Colombian financial institution.
• Interests in a foreign partnership, foreign trust where the U.S. person is a grantor or beneficiary, or foreign estate.

Equally important is what is not a specified foreign financial asset. Directly-held tangible property — including a finca in Llanogrande, an apartamento in El Poblado, or a lote outside Villavicencio — is not reportable on Form 8938 when titled in your personal name. Personal-use foreign currency, gold and other precious metals held directly, and art are likewise outside the scope. But if any of those assets is held through a Colombian SAS, SA, Ltda., or fiducia, your interest in the holding entity itself is reportable, and the entity's underlying assets flow through to the value calculation. This pattern — real estate owned indirectly through a single-member SAS — is one of the most common structures in upper-middle-class Bogotá and Medellín, and one of the most under-reported on U.S. returns.

Colombian Social Security analogues require care. Benefits from Colpensiones (the public pay-as-you-go system) are generally treated as the foreign-government Social Security equivalent and are not reportable as a Form 8938 asset, although the U.S.–Colombia totalization picture and treaty analysis raise their own questions. The privately-managed AFP balances (Régimen de Ahorro Individual con Solidaridad) are different: those are individual accounts at a foreign financial institution and are reportable.

Walk-through: Mateo in Bogotá, MFJ at $480K

Mateo is a U.S. citizen, married to Sandra (a Colombian national who has elected under IRC §6013(g) to be treated as a U.S. resident, so they file MFJ). They live in Chicó, Bogotá. Mateo's 2026 Colombian financial picture:

• Davivienda CDT, peso-denominated: $250,000 USD equivalent (peak in August).
• Credicorp Capital brokerage account holding Colombian equities and TES: $180,000.
• Cesantías and voluntary AFP at Porvenir: $60,000.
• Aggregate peak during year: $490,000.
• December 31 aggregate after a market dip: $480,000.

Test against the MFJ-abroad thresholds: end-of-year $480,000 > $400,000 ✓. Any-time-during-year $490,000 < $600,000. Either prong triggers filing, so Mateo and Sandra must file Form 8938 with their 2026 Form 1040. They also clear the $10,000 FBAR threshold many times over and must file FinCEN Form 114 separately. One client engagement; two distinct filings; two distinct sets of penalties if either is missed. Their preparer drafts a single timeline:

• April 15, 2027 — original Form 1040 due date; expat automatic extension to June 15.
• June 15, 2027 — Form 1040 + Form 8938 due if no further extension; FBAR also nominally due April 15 with automatic extension to October 15.
• October 15, 2027 — final extended Form 1040 + Form 8938 deadline with Form 4868; final FBAR deadline.

FBAR vs Form 8938 side-by-side

Penalty schedule and the six-year statute

The civil penalty regime under IRC §6038D(d) is mechanical. A failure to file a complete and accurate Form 8938 by the due date carries an initial $10,000 penalty. If the failure continues for more than 90 days after the IRS mails a notice of failure, an additional $10,000 penalty accrues for each 30-day period (or fraction thereof) that the failure continues, capped at $50,000 in continuation penalties. The total maximum per return is therefore $60,000. Each year is a separate return; six years of unfiled 8938s can stack to $360,000 before the accuracy and fraud penalties enter the picture.

Reasonable-cause relief is available under IRC §6038D(g), but it is narrow: the taxpayer must show that the failure was due to reasonable cause and not willful neglect, and the regulations specifically state that the fact that a foreign jurisdiction would impose civil or criminal penalties for disclosure is not reasonable cause. Ignorance of the form's existence is almost never accepted as reasonable cause for a sophisticated taxpayer with significant foreign assets.

Reporting mechanics, deadlines, extensions

Form 8938 is filed as an attachment to Form 1040, not a standalone submission. The filing schedule therefore tracks the 1040:

• April 15 — original due date.
• June 15 — automatic two-month extension for U.S. citizens whose tax home and abode are abroad on the original due date (no form required; attach a statement to the return).
• October 15 — extended due date with a timely Form 4868.
• December 15 — discretionary further extension on written request to the IRS Director of International Operations; rarely granted and not automatic.

The form itself has space for a limited number of accounts in Part I (deposit and custodial) and other assets in Part II. Taxpayers with many positions — common for anyone with a brokerage account holding multiple Colombian equities — use multiple continuation sheets. Each account or asset is reported with its maximum value during the year, converted to U.S. dollars at the Treasury Reporting Rate of Exchange for December 31 of the reporting year. Joint accounts between spouses filing jointly are reported once.

The Colombian SAS owner trap

A U.S. citizen who owns shares in a Colombian SAS — even a dormant single-shareholder vehicle holding nothing but a finca or a piece of furniture-grade IP — sits at the intersection of two reporting regimes that do not cancel each other. The SAS shares are a specified foreign financial asset under Treas. Reg. §1.6038D-3(b) and are reportable on Form 8938. Separately, the SAS is a foreign corporation in which a U.S. person owns ten percent or more, which triggers Form 5471 under IRC §6038. Both forms are required. The IRS treats them as serving distinct statutory purposes — §6038D is asset disclosure, §6038 is information return on the corporation itself — and so they are not duplicative.

Practically, this means that a single Colombian SAS valued at $25,000 can require:

• A Form 8938 line item reporting the equity interest, if your aggregate of specified foreign financial assets crosses the threshold.
• A full Form 5471 (typically Category 4 or 5) with its own balance sheet, income statement, and schedule of earnings and profits — with its own $10,000 per year failure-to-file penalty under §6038(b).
• Form 8865 if the entity is treated as a partnership for U.S. purposes (an SAS with multiple shareholders that has not elected corporate treatment under the entity classification regulations may default to a partnership).
• GILTI and Subpart F computation under §951A and §951.

If you're below the 8938 threshold

The threshold disparity between FBAR and Form 8938 is the single largest source of compliance confusion for Colombian-resident clients. The numbers are worth restating: FBAR kicks in at $10,000 aggregate at any point during the year. Form 8938 kicks in at $200,000 end-of-year for a single filer living abroad. There is a twenty-fold gap between the two.

The practical consequence is that most Colombian-resident U.S. citizens with a routine Bancolombia checking account file FBAR every year and have never filed Form 8938. That is correct. The danger is the inverse mistake: assuming that because no Form 8938 is required, no FBAR is required either. That assumption is wrong and routinely produces six-figure FBAR penalty exposure on otherwise modest accounts.

If your aggregate specified foreign financial assets fall below the Form 8938 threshold for your filing status and residence category, no Form 8938 is required. FBAR remains a wholly separate analysis. Keep records of peak values during the year; if you grow into the 8938 threshold mid-year — through a property sale, an inheritance, or a single peso-denominated CDT that spikes when valued at year-end USD — the filing requirement is triggered immediately.

Cleaning up delinquent 8938s

Taxpayers who discover that prior-year Form 8938 filings were missed have several remedial paths, the most common of which is the Streamlined Filing Compliance Procedures. The Streamlined Foreign Offshore Procedures (SFOP) — open to U.S. citizens who meet a foreign-residence test for at least one of the last three tax years — allow amendment of three years of returns and filing of six years of FBARs with a non-willfulness certification, without the §6038D failure-to-file penalty and without the offshore penalty that applies to domestic streamlined filers. For Colombian-resident U.S. citizens who have lived in Colombia at least one year out of the prior three and whose non-disclosure was non-willful, SFOP is by far the most efficient remediation.

The narrower Delinquent International Information Return Submission Procedures (DIIRSP) cover cases where all income was reported, all tax was paid, and only the information return (Form 8938, 5471, 8865, etc.) is missing. Reasonable-cause statements attached to the delinquent forms are required. The IRS may or may not assert penalties; outcomes are case-specific.

Both routes share one prerequisite: the taxpayer must not already be under examination or criminal investigation for any year covered by the disclosure. Once a CI letter or audit notice is in hand, both Streamlined and DIIRSP are closed and the taxpayer is into the much harsher voluntary-disclosure framework instead. The compliance lesson is straightforward: discovering a missed 8938 is the moment to act, not to wait.