FBAR and FATCA for Canadians in the US, Explained

A Canadian who becomes a US person and keeps their RRSP, TFSA, or a regular Canadian bank account open runs into two separate reporting obligations that get talked about as if they're one thing. They aren't. FBAR and FATCA come from different agencies, use different forms, have different thresholds, and even define "foreign account" slightly differently. Neither one is a tax — you can owe nothing and still be required to file, and the penalty for simply not filing can dwarf any tax that was ever at stake.

FBAR: a Treasury filing, not a tax form

The Report of Foreign Bank and Financial Accounts (FBAR, FinCEN Form 114) isn't filed with your tax return and isn't administered by the IRS's income-tax side at all — it goes to FinCEN, the Treasury's financial-crimes unit, through its own BSA E-Filing system, on its own deadline (April 15, with an automatic extension to October 15 — no separate request needed). Any US person — citizen, Green Card holder, or US tax resident — must file if the combined balance of all their non-US financial accounts exceeded $10,000 at any point during the year, even for a single day. There's no year-end snapshot test here; only the peak matters, and it isn't inflation-adjusted.

"Foreign financial account" is read broadly: RRSPs, RRIFs, TFSAs, FHSAs, RESPs, and ordinary Canadian bank and brokerage accounts all count. So does any account you merely have signature authority over — a joint account with a parent, or one you can operate for an employer — even if you don't own a cent of it and never touch it. That's the detail people miss most often: FBAR asks about authority to move money, not ownership of it.

FATCA: filed with your tax return, and it has two tests

The Foreign Account Tax Compliance Act works differently on both ends. On the reporting side, it's what obligates foreign banks (including Canadian ones) to identify US-person account holders and report them to the IRS in the first place — separate from anything you personally file. On the filing side, it requires you to attach Form 8938 to your regular Form 1040 if your specified foreign financial assets cross a threshold that depends on both your filing status and where you live — and unlike FBAR, there are genuinely two independent tests, either one of which triggers filing on its own:

A balance that dips back under the "last day of the year" figure by December 31st doesn't get you out of it if it crossed the higher "any point in the year" figure earlier — either test alone is enough. This is the single most common way people under-report: checking only the year-end number and missing that a mid-year peak already obligated them.

The penalties are what make this worth taking seriously

Neither filing is itself a tax bill — you can owe the IRS nothing and still be required to file both, and the risk here is almost entirely about the penalty for not filing, not about tax owed. A non-willful failure to file an FBAR (a genuine mistake or oversight) can still draw a penalty, inflation-adjusted annually and applied per violation. A willful failure escalates sharply — the greater of a large fixed amount or a percentage of the account balance, per violation, per year — and in serious cases can carry criminal exposure. Form 8938 non-filing penalties are smaller in the typical case but still real, and both can compound with continued non-filing notices from the IRS. None of this is a reason to panic — it's a reason to get current deliberately rather than let it ride.

What this means for the accounts already on this site

Every registered Canadian account this site tracks — RRSP, TFSA, FHSA, RESP — counts toward both FBAR and the FATCA balance test, on top of whatever separate reporting each one individually requires (RESPs, for instance, are also foreign trusts with their own Form 3520/3520-A question, mostly resolved by Rev. Proc. 2020-17 for most people — a different filing again from either of these). An RRSP getting favorable tax treatment under the treaty doesn't exempt it from either of these reporting obligations; tax deferral and reporting are governed by completely separate rules.

Not tax or legal advice — FBAR and FATCA determinations depend on your specific accounts, balances throughout the year, and immigration status; confirm your filing obligations with a cross-border tax specialist rather than relying on a general guide. Check your own numbers against both thresholds with the FBAR / FATCA threshold tracker on Your Action Items, or see the methodology page for the underlying citations.