If it wasn’t bad enough that there are two separate reporting obligations for your foreign holdings, each having its own associated penalties, this reporting is further complicated by the fact that both of these mandated sets of reporting have some different rules, and ignorance of these rules can prove to be quite costly.
First, the structural differences: Form 8938 is part of your annually filed tax return, is filed with the IRS, and is due on your 1040s due date (including extensions), while the FBAR is filed with the Financial Crimes Enforcement Network (FinCEN), is not associated with your tax return, and is technically due on April 15th but is automatically extended to October 15th. This means if you are just learning about your filing obligations and you have already timely filed your tax return for the current year, you may still have time to accurately file an FBAR (something that you will want to do to strengthen your nonwillful certification if you are considering a streamlined disclosure).
It is more likely that you have an FBAR filing requirement than a Form 8938 requirement because Form 8938 has a significantly higher threshold ($50k USD and up depending on your filing status and U.S. residency/non-residency) and taxpayers can also be exempted from filing Form 8938 if they are below the filing thresholds for Form 1040. The requirement to file an FBAR is not impacted by the requirement to file a tax return and there are significantly lower filing thresholds($10k). Another structural difference is the magnitude of the penalties imposed for failure to file, there is a $10,000 penalty for failure to file Form 8938 or for filing a Form 8938 that is not ‘substantially complete’, while penalties for failure to file an FBAR range from $500 to 50% of the maximum value of your foreign accounts.
Second, the account and asset reporting differences: If you have a financial interest in an account, that account will need to be included on both Form 8938 and your FBAR, but if you only have signatory authority in an account, that account does not need to go on Form 8938 but still needs to go on your FBAR. For a more detailed description of signatory authority including several examples of things that qualify as signatory see this article (article coming soon). Accounts held with foreign branches of U.S. financial institutions need to be reported on FBARs and not on form 8938. Interests in foreign partnerships and corporations that are held directly, which is to say not within any type of account (shares/stock/etc), need to be reported on Form 8938 but not on the FBAR. I.e. if you own shares in a friend’s foreign corporation and physically hold the stock certificates, you must include these as an asset on Form 8938. Additionally, when you have an interest in a foreign entity, these interests are often adequately disclosed for Form 8938 purposes when you indicate that the required reporting has been done on Forms 5471, 8865, 8858, 3520, 3520-A, or 8621, but if you have any of these types of interests and they fall below the reporting thresholds for the previously mentioned forms, these must be disclosed as assets on Form 8938.
As you can see, there are more similarities than differences but ignorance of these differences could prove costly. For example, while foreign real estate is not directly reportable on the FBAR or Form 8938, if you hold that real estate within a foreign entity, the value of that real estate must be included on your 8938 else you could be staring down a $10,000 failure to file penalty for each year in which you haven’t disclosed that entity on your tax return. It is important to note that all assets that are being disclosed on Forms 5471, 8865, 8858, 3520, 3520-A, or 8621 do still count toward your Form 8938 threshold even though their disclosure on form 8938 is limited to the indication that one of the above mentioned forms is being prepared. This means that there are cases in which Form 8938 is required but FBARs are not. For example, if you are a U.S. citizen living in Costa Rica, to own real estate you will have to open a corporation to hold that real estate. This means your personal residence can ultimately create a Form 8938 filing requirement even in situations wherein the aggregate value of all of your foreign accounts is below $10,000, meaning that an 8938 is required but an FBAR is not.