Form 8938 Foreign Asset Reporting

Form 8938, formally the Statement of Specified Foreign Financial Assets, is one of the most misunderstood filings in the US international tax system. The misunderstanding is almost always in one direction: a non-resident forms a Wyoming LLC, reads online that owning a US company creates "foreign reporting" duties, and assumes Form 8938 is one of them. It is not. Form 8938 is a US-person obligation under Internal Revenue Code Section 6038D. If you are a non-resident alien who lives outside the United States and owns a Wyoming LLC, you do not file it, and your LLC's US bank account does not appear on it because that account is a US asset, not a foreign one. This guide explains exactly why, where the line sits, what you do file instead, and the narrow circumstances under which Form 8938 could ever touch you.

What Form 8938 actually is

Form 8938 is an information return attached to a US income tax return. It reports "specified foreign financial assets" held by certain US taxpayers when the total value of those assets crosses a dollar threshold. The form was created by the Foreign Account Tax Compliance Act (FATCA) in 2010 and is codified in IRC Section 6038D. Its purpose is to give the IRS visibility into offshore accounts, foreign brokerage holdings, foreign business interests, and similar assets that a US person might otherwise leave undeclared.

The key word in the form's title is "foreign," and the key concept in the statute is "specified person." Form 8938 only requires reporting from a defined class of taxpayers, and it only requires reporting of assets that are foreign relative to the United States. Both conditions matter. A US person with no foreign assets files nothing. A non-US person, no matter how many foreign assets they hold, also files nothing on Form 8938, because they are outside the class of people the statute reaches.

Because Form 8938 attaches to an income tax return, the filing mechanics are tied to that return. A US person who files a Form 1040 attaches Form 8938 to it when thresholds are met. A non-resident who is not a US person does not file Form 1040 in the ordinary course (they may file Form 1040-NR if they have US-source income), and Form 8938 is simply not part of the 1040-NR ecosystem. This structural fact is the cleanest way to remember the rule: the form rides on a return you are not required to file.

Who counts as a "specified person"

The statute limits Form 8938 to "specified individuals" and, since later regulations, certain "specified domestic entities." The specified-individual category is the one that matters for almost everyone reading this, and it includes a short, well-defined list of people.

• US citizens, regardless of where in the world they live.
• Lawful permanent residents (green card holders) for any part of the tax year.
• Individuals who meet the substantial presence test and are therefore US tax residents.
• Certain individuals who elect to be treated as US residents, and bona fide residents of US territories such as Puerto Rico, Guam, or the US Virgin Islands.

Every category turns on US tax status, not on what you own. Owning a Wyoming LLC does not appear anywhere on that list, and for good reason: forming or owning a US company has no effect whatsoever on your personal tax residency. You become a US person by being a citizen, by holding a green card, or by spending enough days physically present in the United States to satisfy the substantial presence test. None of those things happen automatically when you register an LLC in Cheyenne from abroad.

A non-resident alien — someone who is neither a citizen, nor a green card holder, nor substantially present — is by definition not a specified individual. That is the population that this guide is written for, and it is the population that does not file Form 8938.

Why non-resident Wyoming LLC owners are outside the rule

There are two independent reasons a typical non-resident LLC owner has no Form 8938 obligation, and it is worth understanding both, because each closes off a different misconception.

The first reason is status. As covered above, Form 8938 only reaches specified persons. A non-resident alien is not one. This alone ends the inquiry for most readers: even if a non-resident held a vault of foreign assets, the form would still not apply, because the form never asks non-residents anything.

The second reason addresses the asset itself, and it matters because some owners wrongly fear that the LLC's bank account might be reportable. A Wyoming LLC is a United States entity. Its bank account — whether at a fintech such as Mercury, Relay, or Wise that sits on a US partner bank, or at a chartered US bank — is a US-located account. From the perspective of US tax law, a US account is not a foreign financial asset. So even in the hypothetical where the owner were a US person, the LLC's domestic account would not be a "foreign" asset to report on Form 8938. The asset's location and the person's status both point away from the form.

It helps to separate the two questions cleanly. The question "am I a US person?" governs whether you file the form at all. The question "is this asset foreign?" governs whether a specific holding goes on the form once you are filing it. For a non-resident with a US LLC and a US account, the answer to the first question is no and the answer to the second question is also no, so the form is doubly inapplicable.

What you file instead: Form 5472

Non-residents sometimes assume that "no Form 8938" means "no US filing at all." That is not correct, and conflating the two is a costly mistake. The real compliance obligation for a foreign-owned single-member Wyoming LLC is Form 5472, attached to a pro forma Form 1120, filed annually with the IRS. Form 5472 has nothing to do with foreign assets — it reports reportable transactions between the LLC and its foreign owner or other related parties, such as capital contributions, distributions, loans, and amounts paid between the owner and the company.

This is a different filing, with a different purpose, a different agency relationship, and a very different penalty profile. A foreign-owned single-member LLC is treated as a disregarded entity, and the Form 5472 plus pro forma 1120 package is the price of that treatment. The penalty for failing to file Form 5472 is $25,000 under IRC Section 6038A — a flat, automatic penalty that does not depend on whether any tax was owed. The deadline is generally April 15, and it can be extended to October 15 by filing Form 7004 before the original due date.

The table below contrasts the three filings non-residents most often confuse, so you can see at a glance which one is actually yours.

The practical takeaway: the form you must not forget is Form 5472, and the form you can stop worrying about is Form 8938.

Form 8938 versus FBAR — close cousins, not twins

Form 8938 is frequently confused with the FBAR, FinCEN Form 114, because both involve foreign holdings of US persons. They are genuinely different filings, and the distinctions matter if you ever do become a US person.

FBAR is a Bank Secrecy Act filing administered by FinCEN, not a tax form, even though it sits in the same general territory. It requires US persons to report foreign bank and financial accounts when the aggregate value of those accounts exceeds $10,000 at any point during the year. It is filed electronically and separately from the income tax return, and its threshold is a single low number regardless of filing status.

Form 8938, by contrast, is a tax-return attachment administered by the IRS. Its thresholds are higher and they vary by filing status and by whether the taxpayer lives in the US or abroad. It also reaches a broader set of assets — not just accounts, but foreign stock held outside an account, interests in foreign entities, foreign partnership interests, and certain foreign financial instruments. A US person can end up filing both forms, just one, or neither, depending on what they hold and how much it is worth. The crucial point for non-residents is that both are US-person filings. If Form 8938 does not apply to you because you are not a US person, FBAR does not apply for the same reason.

The thresholds — and why they only matter if your status changes

The Form 8938 thresholds are only ever reached by people who are already specified persons, so a non-resident never needs them. But because some Wyoming LLC owners do eventually relocate to the United States, it is worth knowing where the lines sit, so that a future move does not catch you unprepared.

• A single taxpayer living in the United States must report if specified foreign financial assets exceed $50,000 on the last day of the year or $75,000 at any time during the year.
• A married couple filing jointly and living in the United States uses doubled figures: $100,000 at year-end or $150,000 at any point during the year.
• US persons living abroad get substantially higher thresholds. A single filer abroad reports above $200,000 year-end or $300,000 anytime; a married couple filing jointly abroad reports above $400,000 year-end or $600,000 anytime.

Notice two features of these numbers. First, they are about foreign assets, so even after you become a US person, your US LLC's US bank account never counts toward them. Second, the "living abroad" thresholds are much more generous, which reflects the fact that a US citizen genuinely resident in another country will ordinarily hold local accounts as a matter of daily life. The thresholds are a reason to track your foreign holdings carefully in the year of a move, not a reason for a current non-resident to do anything at all.

A worked example

Consider a founder based in São Paulo who forms a Wyoming LLC to sell software subscriptions to customers worldwide. She owns the LLC alone, so it is a foreign-owned single-member disregarded entity. She opens a Mercury account for the business, keeps a personal Brazilian bank account, holds a Brazilian brokerage account worth the equivalent of about $90,000, and owns a stake in a small Brazilian consultancy.

While she remains a Brazilian resident and a non-US person, her Form 8938 obligation is zero. She is not a specified individual, so the form never asks her anything, and none of her assets are tested against any threshold. Her Brazilian brokerage and her consultancy stake are foreign assets, but the form that would report them simply does not apply to a non-resident. Her Mercury account is a US account, so it would not be a foreign asset even if she were a US person. What she does owe the IRS is Form 5472 with a pro forma 1120 each year, reporting items such as the capital she put into the LLC and the distributions she takes out — by April 15, extendable to October 15 with Form 7004.

Now change one fact: in a later year she moves to the United States, obtains the right immigration status, and passes the substantial presence test, becoming a US tax resident. From that year forward, she is a specified individual. Her Brazilian brokerage account (about $90,000) and her Brazilian consultancy interest are foreign assets, and as a single US resident her year-end threshold is $50,000, so she would now report them on Form 8938. Her Brazilian bank account, depending on its balance, may also push her over the $10,000 FBAR line, triggering FinCEN Form 114. But her Wyoming LLC's US Mercury account still does not appear on Form 8938, because it remains a US asset. The move changed her status, not the character of her US account.

Common mistakes

The errors around Form 8938 are predictable, and avoiding them is mostly a matter of keeping the status question and the asset question separate. The most damaging mistakes tend to cluster in a few areas.

• Assuming LLC ownership makes you a US person. It does not. Tax residency is determined by citizenship, green card status, or the substantial presence test — never by owning a US company. This is the single most common false belief, and it leads people to file forms they do not owe.
• Treating the LLC's US bank account as a foreign asset. A Wyoming LLC's Mercury, Relay, Wise, or chartered-bank account is US-located. It is not foreign, and it does not belong on Form 8938 under any circumstance, even for a US-person owner.
• Confusing "no Form 8938" with "no filing at all." A non-resident with a single-member LLC still owes Form 5472 and the pro forma 1120, with a $25,000 penalty for non-filing. Skipping that because you correctly concluded Form 8938 does not apply is an expensive non sequitur.
• Filing Form 8938 defensively "just in case." A non-resident has no return to attach it to and no obligation to file it. Filing unnecessary forms creates confusion and can invite questions you did not need to answer.
• Conflating Form 8938 and FBAR as identical. They have different agencies, thresholds, and asset definitions. A US person may owe one, both, or neither; lumping them together causes both over- and under-reporting.

Edge cases worth knowing

A handful of situations sit near the boundary and deserve specific attention, because the simple rule ("non-residents do not file") has a few wrinkles in the year a status changes or where the ownership structure is unusual.

The first is the dual-status year — the calendar year in which you move to or from the United States. In a year where you are a non-resident for part of the year and a US resident for part of the year, Form 8938 generally applies only to the portion of the year you were a specified person, and the analysis can become genuinely intricate. If you expect a move, the filing for that transition year is one to plan with a CPA rather than handle by rule of thumb.

The second is the multi-member LLC. A foreign-owned multi-member Wyoming LLC is taxed as a partnership, not a disregarded entity, so its US filing world is different: Form 1065 with K-1s, due March 15, plus the Section 1446 withholding and Form 8805 mechanics where effectively connected income is involved, and a Form 1040-NR for each foreign partner with US-source income. None of that is Form 8938 either, but it is a reminder that "what do I file?" depends heavily on whether the LLC is single- or multi-member.

The third is the specified-domestic-entity rule. FATCA regulations extended Form 8938 reporting to certain US entities that are closely held by specified individuals and that are formed or used to hold foreign assets. This rule is aimed at US persons trying to bury foreign holdings inside a domestic shell; it is not a back door that pulls a genuine non-resident's LLC into Form 8938, because the entity rule still depends on US-person ownership. If your LLC is owned by a non-resident, this provision does not reach it. The fourth wrinkle is timing of the substantial presence test: it counts physical days across a three-year weighted formula, so a non-resident who spends long stretches in the US — extended visits, a slow relocation — should track days carefully, because crossing that line is exactly what flips Form 8938 on. When any of these edge cases is in play, confirm the specifics with a qualified US international tax advisor rather than relying on the general rule.

The bottom line for non-residents

If you live outside the United States and are not a US citizen or green card holder, Form 8938 is not your form. Your status places you outside the class of people the statute reaches, and your Wyoming LLC's US bank account is not a foreign asset in any event. What you actually owe is Form 5472 with a pro forma 1120 for a single-member LLC, on time, every year, to avoid the $25,000 penalty. Keep the two ideas separate — Form 8938 is about US persons and their foreign assets; Form 5472 is about your US LLC and its related-party transactions — and the compliance picture becomes clear. Revisit the question only if your personal residency ever changes, and get tailored advice for the year it does.

If you have not yet formed your company, you can set up a Wyoming LLC with us for $397, all-inclusive — registered agent, filing, and EIN handling included — so the structure is in place before you ever need to think about which of these forms applies to you. For a non-resident, that gives you a clean US entity, a clear path to a business bank account, and the right filing posture from day one.