Why is my FBAR total higher than my Form 8938 total?

The FBAR includes accounts over which you have signature authority but no financial interest, such as a company account you operate as a director, and Form 8938 excludes them. The FBAR threshold is also lower, so smaller accounts appear. Conversely, Form 8938 includes directly held foreign shares that the FBAR omits. A higher FBAR total is normal if the difference traces to these population rules and the shared accounts carry the same figures.

Should the same UK account show the same value on the FBAR and Form 8938?

For a calendar-year individual, usually yes. Both forms ask for the maximum value during the year and convert at a year-end Treasury rate, so if the same statements and rate are used the dollar figures should match. They can legitimately differ if Form 8938 relied on the conversion rate shown in the bank's annual statement, which its instructions allow. Any difference should be recorded and explained in the working papers.

Do I report ISA interest on my US return if HMRC does not tax it?

Yes. An ISA is tax-free for UK purposes, so its income does not appear on Self Assessment, but the United States does not recognise that exemption. ISA interest and dividends are taxable income on the US return, and the ISA itself is a foreign account for FBAR purposes and generally a specified foreign financial asset for Form 8938. Missing ISA income is one of the most common streamlined errors we correct.

How do I convert UK tax year bank interest certificates for a US return?

You cannot use them directly. A UK interest certificate covers 6 April to 5 April, while the US return needs January to December. The US figure should be rebuilt from monthly or quarterly statements for the calendar year and converted into dollars, commonly at the IRS yearly average rate. Rebuilding both UK and US totals from the same monthly data lets you show they describe the same income.

What should Schedule B line 7a say if I only have signature authority over a company account?

The first question on line 7a is answered Yes if at any time in the year you had a financial interest in or signature authority over a foreign account, so signature authority alone is enough. The second question is Yes if you are required to file an FBAR, which depends on the aggregate maximum value exceeding 10,000 dollars. If an FBAR is required, list the countries on line 7b.

Does the IRS compare my Form 14653 narrative with my FBARs and returns?

Streamlined returns may be examined, and an examiner reading the file sees the certification alongside the FBARs, Form 8938 and returns. If the narrative describes accounts or circumstances that the forms contradict, it invites questions about the non-wilful certification. We finalise the narrative last, after the reconciliation, and support every factual statement in it with a document from the client file.

IRS Streamlined Filing Experts: FBAR and 8938 Reconciled

IRS Streamlined Filing Experts do one thing before a streamlined package leaves the office that most self-prepared submissions skip: a line-by-line consistency review that reconciles every FBAR, every Form 8938, the Schedule B Part III answers and the interest and dividends on each return, so that the package tells one coherent story. The short answer to why this matters is that the FBAR and Form 8938 use different valuation rules and different reporting populations, so their numbers legitimately differ, and an examiner reading the package needs to be able to see why. In the packages we prepare for high-net-worth Americans in the UK, this review sits after the returns and FBARs are drafted and before Form 14653 is signed.

What does a streamlined consistency review actually check?

A streamlined consistency review is a cross-document check that confirms every foreign account and asset appears where the rules say it should, at the value the rules require, with income that matches the account statements and a narrative that matches the numbers. It asks one question: laid side by side, would anything in the package contradict anything else?

The Streamlined Filing Compliance Procedures require the three most recent years of returns and the six most recent FBARs, and the IRS states at https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures that returns submitted under the procedures may be subject to examination. That is why the review exists: the documents may later be read together by someone looking for inconsistencies.

The documents in scope are:

The six FinCEN Form 114 reports (FBARs) for the covered FBAR years, filed through the BSA E-Filing System.
Form 8938 for each of the three covered tax years where the reporting threshold is met.
Schedule B Part III on each return, including the two questions on line 7a and the country list on line 7b.
The interest, dividends and gains on each Form 1040 or 1040-X.
Form 14653, including the narrative explaining the reasons for the failures.
On the UK side, the Self Assessment returns and the bank statements behind them.

Why are the FBAR and Form 8938 values different?

The FBAR and Form 8938 values differ because the two forms come from different statutes, are administered by different bodies and use different valuation and population rules. The IRS side-by-side comparison at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements sets them out. The differences fall into three groups: how value is measured, how it is converted and which assets are reported.

FBAR maximum value. FinCEN's filing instructions, available at https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf, define the maximum value of an account as a reasonable approximation of the greatest value of currency or nonmonetary assets in the account during the calendar year. Periodic account statements may be relied on, provided they fairly reflect the maximum value. Each account is valued separately, the dollar figure is rounded up to the next whole dollar, and a negative result is entered as zero.

Form 8938 maximum value. The Form 8938 instructions at https://www.irs.gov/instructions/i8938 also ask for the maximum value of each specified foreign financial asset during the tax year, and they also allow reliance on periodic statements unless you know or have reason to know, based on readily accessible information, that the statements do not reflect a reasonable estimate of the maximum value. For an asset that is not a financial account, such as directly held foreign shares, the instructions allow the value on the last day of the tax year to be used unless you know or have reason to know that it does not reasonably reflect the maximum.

Year-end value on Form 8938. The year-end figure matters on Form 8938 but never on the FBAR, because the Form 8938 threshold is tested both on the last day of the tax year and at any time during it. For an unmarried taxpayer living abroad the instructions set the threshold at more than 200,000 dollars on the last day of the tax year or more than 300,000 dollars at any time; for a married couple filing jointly abroad it is more than 400,000 dollars or more than 600,000 dollars. The FBAR threshold, by contrast, is an aggregate maximum value above 10,000 dollars at any time in the calendar year.

How do the currency conversion rules differ between FBAR and Form 8938?

For the FBAR, FinCEN's instructions say to convert each account's maximum value using the Treasury rate for the last day of the calendar year, and if no Treasury rate is available, to use another verifiable rate and give its source. For Form 8938, the instructions call for the U.S. Treasury Bureau of the Fiscal Service rate on the last day of the tax year, even if the asset was sold before that date. Form 8938 adds a concession the FBAR does not have: you may rely on the conversion rate shown in a financial account statement issued at least annually by the institution. If no Treasury rate exists, another publicly available rate may be used and must be disclosed.

The Bureau of the Fiscal Service publishes the rates quarterly at https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange for this purpose. One practical trap: the Treasury table expresses rates as units of foreign currency per one US dollar. A sterling balance is therefore divided by the published rate, not multiplied. We have reviewed self-prepared FBARs where every value was distorted because the preparer multiplied. For a calendar-year individual the two conversion dates coincide, so a gap usually comes from Form 8938 using a bank statement rate, or from inconsistent rate sources; the review records the rate used for each account on each form.

Income on the return follows yet another convention. Interest and dividends are translated into dollars for the return, and many preparers use the IRS yearly average rates at https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates for this. That means the dollar income on Schedule B will never tie arithmetically to a year-end-rate balance, and the worksheet must hold sterling figures alongside the dollar figures.

Which accounts go on the FBAR but not on Form 8938, and the reverse?

The two forms report overlapping but different populations, and a mismatch in the count of accounts is often legitimate. The IRS comparison chart gives the clearest examples:

Signature authority only: an account over which you have signature authority but no financial interest, such as a company account you can operate as a director, is reported on the FBAR (in the signature authority part of the form) but not on Form 8938.
Directly held foreign shares: stock issued by a foreign corporation and held directly, for example in certificated form rather than through a brokerage account, is reported on Form 8938 but not on the FBAR, because it is not a financial account.
Other non-account assets: the Form 8938 instructions also list a capital or profits interest in a foreign partnership and a note or bond issued by a foreign person.
Foreign mutual funds and pooled funds: the comparison chart shows these as reportable on both forms.
Assets already reported on certain other forms: Form 8938 Part IV lets you count, rather than repeat, assets reported on Forms 5471, 8621, 8865 and certain other information returns. We cover this duplicative reporting exception in a separate post; here the point is that an FBAR account may legitimately be absent from the Form 8938 detail parts.

The Form 8938 instructions are explicit that filing Form 8938 does not relieve anyone of the obligation to file the FBAR. The reverse is equally true. Each form is complete only by its own rules, and the review checks each one against its own population before comparing them with each other.

What should Schedule B Part III say in a streamlined package?

Schedule B Part III is simple and frequently wrong. The instructions at https://www.irs.gov/instructions/i1040sb ask two questions on line 7a. The first is whether, at any time during the year, you had a financial interest in or signature authority over a financial account in a foreign country; this is answered Yes even if no FBAR is required. The second is whether you are required to file FinCEN Form 114, which is Yes only if the aggregate value of foreign accounts exceeded 10,000 dollars at any time in the year. If an FBAR is required, line 7b asks for the names of the foreign countries.

The consistency rules are straightforward, which is why errors stand out:

If an FBAR was filed for a year, the second question on line 7a for that tax year must be Yes, and line 7b must name the United Kingdom and every other country in which a reported account is located.
If a client has only signature authority over a company account, the first question is still Yes. Answering No because the money is not theirs is a common error.
The original returns being amended under the procedures will often show No on line 7a. The 1040-X versions must correct this; leaving the original answer in place creates a direct contradiction with the FBARs filed the same week.
Schedule B must be filed whenever there are foreign accounts, even if interest and dividends are below the usual threshold for attaching the schedule.

How do account-level interest and dividends tie to the income on the return?

This is the part of the review where the work of IRS Streamlined Filing Experts is most visible. Every account on the FBAR and every asset on Form 8938 is a potential source of income. The review builds a schedule, account by account, of interest, dividends and gains in the original currency, and then confirms that each item appears on the return in dollars. Form 8938 Part III asks for the income from the reported assets and the form or schedule where it was reported, which gives an examiner a ready-made cross-reference. If Part III shows foreign interest but Schedule B does not, the inconsistency is printed on the face of the return.

Three patterns cause most gaps. First, interest on small or dormant UK accounts, on the FBAR but missing from the return. Second, interest and dividends inside an ISA, which are free of UK tax and therefore never appear on Self Assessment, but which are taxable for US purposes and must be on the US return. Third, dividends reinvested automatically on a platform, which never reach the bank account and are missed when returns are prepared from bank statements.

Direction matters: working from the return back to the accounts only finds income already reported. The review runs from the FBAR and Form 8938 forward to the return, which finds what is missing.

How do the UK figures reconcile with HMRC Self Assessment?

For Americans resident in the UK, the same income is usually reported to both HMRC and the IRS. The figures describe the same income but will rarely be the same numbers, and the review documents why.

The first reason is the tax year. The UK tax year runs from 6 April to 5 April; the US tax year for an individual is the calendar year. A bank interest certificate or annual tax statement covers the UK year, so it cannot be dropped straight into a US return. The US figure has to be rebuilt from monthly or quarterly statements covering January to December. We rebuild both the US and UK totals from the same monthly data, so they can be shown to agree.

The second reason is scope. GOV.UK explains at https://www.gov.uk/apply-tax-free-interest-on-savings/how-you-pay-tax-on-savings-interest that banks and building societies tell HMRC how much interest they paid after the tax year ends, that people already filing Self Assessment report savings interest on the return, and that Self Assessment is required where savings interest exceeds 10,000 pounds. ISA income, by contrast, does not appear on Self Assessment at all. So the UK figure will be lower than the US figure wherever ISAs are held, and that difference should be expected, not corrected.

The third reason is allocation: joint account interest may be divided between spouses differently on each side, so the review notes the split used. Where the client files Self Assessment, the guidance at https://www.gov.uk/self-assessment-tax-returns sets out what must be reported, and the interest banks have reported to HMRC is a useful independent check that no UK account is missing from the FBAR.

What does Form 14653 need to say about the numbers?

For taxpayers outside the United States, the Streamlined Foreign Offshore Procedures page at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states requires a signed Form 14653 certifying eligibility, that all required FBARs have now been filed, and that the failures resulted from non-wilful conduct. The certification includes a narrative explaining the reasons for the failures. The Streamlined Foreign Offshore Procedures carry no miscellaneous offshore penalty; that 5 percent penalty applies only under the Streamlined Domestic Offshore Procedures.

The narrative makes factual claims that can be tested against the numbers. If it says the client held a single UK current account and a modest savings account, the FBARs should not show a platform account with a six-figure maximum value. If it says the client did not know foreign accounts were reportable, the original returns should not show a Yes on Schedule B line 7a for those years. We read the narrative against the worksheet sentence by sentence and finalise it last, because a narrative drafted before the reconciliation is finished is the most common source of contradictions.

What does an examiner see when the figures conflict?

An examiner sees the documents together. Unexplained conflicts suggest a package assembled without care, which matters because the procedures rest on a non-wilful certification and complete, accurate returns. Conflicts that invite questions include an account on the FBAR with no corresponding income anywhere on the return; Form 8938 totals that exceed the FBAR aggregate without any directly held assets to explain it; Schedule B answers that contradict the FBARs; country lists on line 7b that omit a country where an FBAR account sits; and a narrative that describes a simpler financial life than the forms show. The review finds the explanation before the IRS asks, or corrects the form if there is none.

Where do the late FBAR route and the six-year and three-year windows fit?

Scope is set before the review begins, and we cover it in a separate post. FBARs are due on 15 April following the calendar year, with an automatic extension to 15 October, as https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar explains. When an FBAR is filed after that extended date, FinCEN's instructions require a reason for late filing; under the streamlined procedures the IRS instructs filers to select Other and enter Streamlined Filing Compliance Procedures.

The IRS withdrew its Delinquent FBAR Submission Procedures page around 1 July 2026, so late FBARs go through the BSA E-Filing System with a reason for late filing, or through the streamlined procedures. For the review, the key point is that the six FBAR years and three return years do not fully overlap: the earliest FBAR years have no matching return, so their account lists are checked against statements instead.

What does a reconciliation worksheet look like?

The worksheet we use is a single table per client, built before any form is finalised. Set out as a list, its columns are:

Account or asset, institution, country, ownership (sole, joint or signature only) and the forms on which it is reported.
For each FBAR year: maximum value in original currency, source statement, Treasury rate and rounded dollar figure.
For each Form 8938 year: maximum value, rate source, dollar figure and the year-end value for the threshold test.
For each tax year: interest, dividends and gains in original currency and dollars, and where each appears on the return.
For each UK tax year: the Self Assessment or PAYE figure, its source, and a note reconciling it to the US calendar-year figure.
Schedule B line 7a answers and line 7b countries for each year, and each Form 14653 statement that relies on the account.
An exceptions column explaining, in one sentence, every legitimate difference between the FBAR and Form 8938 figures.

Worked illustration: reconciling a London-based investment banker's package

The following is an illustration with assumed figures, not a real client. Assume a single US citizen living in London, an investment banker who also sits as a director of a small UK company. Assume a Treasury reporting rate on 31 December of 0.80 pounds per dollar, so that one pound converts to 1.25 dollars at year end, and assume a yearly average rate of 1.27 dollars per pound for income. Both rates are assumptions for illustration only.

The client holds a UK current account with a maximum balance in the year of 42,000 pounds and a year-end balance of 18,000 pounds; a cash ISA holding 20,400 pounds throughout; a stocks and shares ISA on a UK platform with a maximum of 150,000 pounds and a year-end value of 140,000 pounds; UK-listed shares held directly in certificated form worth 60,000 pounds at year end; and signature authority, but no financial interest, over the company's operating account, which reached a maximum of 300,000 pounds.

On the FBAR, the current account is 52,500 dollars, the cash ISA 25,500 dollars, the platform ISA 187,500 dollars and the company account 375,000 dollars in the signature authority part. The certificated shares do not appear. The FBAR aggregate is 640,500 dollars.

On Form 8938, the company account does not appear, because signature authority alone is not reportable there, but the certificated shares do, at 75,000 dollars using their year-end value because nothing suggests a materially higher value during the year. The Form 8938 maximum-value total is 52,500 plus 25,500 plus 187,500 plus 75,000, which is 340,500 dollars. The year-end total is 22,500 plus 25,500 plus 175,000 plus 75,000, which is 298,000 dollars, comfortably above the 200,000 dollar year-end threshold for a single filer abroad, so the form is required.

The two totals differ by 300,000 dollars, and the worksheet explains the difference completely: add 375,000 dollars for the signature authority account on the FBAR and subtract 75,000 dollars for the directly held shares on Form 8938. Every account on both forms carries the same dollar figure, because the same statements and year-end rate were used.

For income, assume 300 pounds of current account interest, 800 pounds of cash ISA interest, 3,000 pounds of dividends inside the platform ISA and 2,400 pounds of dividends on the certificated shares. At the assumed average rate, the US return shows 1,397 dollars of foreign interest and 6,858 dollars of foreign dividends, and Form 8938 Part III points to Schedule B for both. Schedule B line 7a is Yes to both questions, and line 7b names the United Kingdom. On the UK side, only the 300 pounds of current account interest and the 2,400 pounds of dividends appear on Self Assessment, apportioned to the relevant UK tax years from the monthly statements; the ISA income is absent by design, and the worksheet says so.

Finally, the Form 14653 narrative mentions every account on the worksheet, including the company signature authority, and nothing it describes is absent from the forms.

What are the most common failure modes?

Across the streamlined files we prepare and the self-prepared packages we are asked to review before submission, the same problems recur:

Year-end balances entered on the FBAR instead of maximum values.
Multiplying by the Treasury rate instead of dividing.
Using different rate sources on the FBAR and Form 8938 for the same account without recording why.
Omitting signature-authority accounts from the FBAR because the client does not own the money.
Leaving directly held foreign shares off Form 8938 because they are not on the FBAR.
ISA interest and dividends missing from the US return because they were absent from Self Assessment.
US income built from UK tax-year certificates instead of calendar-year statements.
Schedule B line 7a left as No on the amended returns.
A Form 14653 narrative drafted before the numbers were final.

Why work with IRS Streamlined Filing Experts on the reconciliation?

The forms in a streamlined package follow different rules and will never produce identical numbers. The skill is not in making the figures match; it is in making every difference explainable by a rule and documented in the file. That is the work IRS Streamlined Filing Experts carry out in a consistency review. If you are preparing a streamlined submission and want the FBARs, Form 8938, Schedule B and your HMRC figures reconciled before anything is filed, our team handles the full preparation and compliance process end to end.