You opened a Bancolombia account because you needed somewhere for your salary to land and because nobody in Colombia takes a US debit card at the notaría. Nobody mentioned that the account triggers a US federal filing obligation, separate from your tax return, with a five-figure penalty attached.
A missed FBAR is a common compliance failure among Americans in Colombia, and the good news is that it is usually a paperwork problem rather than a tax problem. The FBAR does not tax anything. It just has to be filed.
Figures verified 9 September 2026.
What is the FBAR and when do I have to file it?
FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. You file it if you are a US person with a financial interest in, or signature authority over, foreign financial accounts whose aggregate value exceeds $10,000 at any point during the calendar year.
Read that threshold slowly, because three words in it do most of the damage:
- Aggregate. Not per account. Every account you touch is summed.
- At any point. Not a year-end test. If the total crossed $10,000 for one afternoon in July and was back to $600 by December, you file.
- Exceeds. $10,000.01 is over the line.
“US person” means citizens, residents, and also corporations, partnerships, LLCs, trusts and estates. Dual Colombian-American citizens are US persons. Green card holders living permanently in Medellín are US persons.
How fast does $10,000 actually happen?
Faster than most people expect, because the test is an aggregate high-water mark.
| Account | Peak balance during the year |
|---|---|
| Bancolombia cuenta de ahorros | $4,200 |
| Davivienda cuenta corriente used for rent and administración | $1,800 |
| A CDT opened when you sold something | $3,000 |
| Comisionista de bolsa brokerage account | $2,500 |
| Aggregate | $11,500 — FBAR required |
Now add the case that catches business owners. You are the representante legal of a Colombian SAS and you can sign on the company’s account. Signature authority alone triggers the filing requirement, even though not one peso in that account belongs to you. The company account goes into your aggregate.
What counts as a reportable account: savings and checking accounts and time deposits — cuentas de ahorro, cuentas corrientes, CDTs; securities and brokerage accounts; commodity futures and options accounts; insurance or annuity policies with a cash value; mutual funds and similar pooled funds; and certain foreign retirement accounts.
What is excluded: foreign hedge funds and private equity funds, correspondent accounts, governmental-entity accounts, accounts at certain international financial institutions, US military banking facilities, and certain IRAs and qualified plans. A foreign account holding virtual currency is not currently reportable on the FBAR, though FinCEN has said it intends to amend the regulations — treat that as a moving target rather than a settled answer.
When is it due, and where does it go?
The FBAR is not filed with your tax return. It goes to FinCEN, electronically, through the BSA E-Filing System. It is not attached to Form 1040, it is not covered by Form 4868, and your accountant does not file it automatically unless you have specifically asked them to.
The deadline is 15 April, with an automatic extension to 15 October. No request, no form, nothing to file to get the extension. Keep records for five years from the 15 April due date.
What are the penalties if I didn’t file?
Under 31 CFR 1010.821, with amounts effective 17 January 2025:
| Violation | Civil penalty |
|---|---|
| Non-willful | $16,536 |
| Willful | The greater of $165,353 or 50% of the account balance |
Criminal penalties exist as well: a false filing can carry up to $10,000 and five years; failure to file can carry up to $250,000 and five years, rising to $500,000 and ten years where certain other laws are also violated.
Following Bittner v. United States, the Internal Revenue Manual now applies the non-willful penalty on a per-violation basis while the willful penalty applies per account. These figures are inflation-adjusted periodically, so confirm the current table before relying on a number.
Before that ruins your week: if you simply did not know, there is a defined route back. The Streamlined Foreign Offshore Procedures exist for exactly this, and for people genuinely living abroad the offshore penalty is zero. See streamlined procedures for Americans in Colombia. Do not “quietly” file six years of back FBARs on your own and hope — that closes off the good options.
How is Form 8938 different?
Form 8938 is the FATCA reporting form. It attaches to your Form 1040 and covers “specified foreign financial assets,” a broader category than bank accounts. The thresholds are much higher — and much higher again if you actually live abroad, which most readers of this page do.
Thresholds if you live abroad:
| Filing status | Value on last day of tax year | or at any time during the year |
|---|---|---|
| Unmarried | over $200,000 | over $300,000 |
| Married filing jointly | over $400,000 | over $600,000 |
| Married filing separately | over $200,000 | over $300,000 |
Thresholds if you live in the US (relevant if you own Colombian assets but have not moved):
| Filing status | Value on last day of tax year | or at any time during the year |
|---|---|---|
| Unmarried | over $50,000 | over $75,000 |
| Married filing jointly | over $100,000 | over $150,000 |
| Married filing separately | over $50,000 | over $75,000 |
Side by side:
| Form 8938 | FBAR (FinCEN 114) | |
|---|---|---|
| Filed with | IRS, attached to Form 1040 | FinCEN, separately via BSA E-Filing |
| Threshold | $50,000–$600,000 by status and residence | $10,000 aggregate, any time |
| Deadline | Return due date, including extensions | 15 April, automatic extension to 15 October |
| Signature authority alone | Generally not reportable | Reportable |
| Scope | Broader — foreign stock or securities held outside an account, interests in foreign entities, foreign partnership interests, certain foreign contracts | Foreign financial accounts |
| Penalty | Up to $10,000, plus $10,000 per 30 days after IRS notice, maximum $60,000; plus a 40% accuracy penalty on understatements attributable to undisclosed assets; 6-year statute of limitations where over $5,000 of income from an omitted foreign asset is left off | $16,536 non-willful / greater of $165,353 or 50% of balance, willful |
Neither form replaces the other. They overlap, and where they overlap you file both. Most Americans in Colombia with an ordinary Bancolombia account file the FBAR only. Form 8938 typically starts to bite when a portfolio grows, or when a Colombian SAS shareholding — an interest in a foreign entity — pushes the total over the line. That same shareholding usually brings Form 5471 with it.
Will the IRS actually find out about my Colombian account?
Yes, and this is not a scare tactic.
The United States and Colombia have a FATCA intergovernmental agreement — Model 1, signed 20 May 2015, in force since 27 August 2015. Under a Model 1 IGA, Colombian financial institutions identify their US-person account holders and report the account data to DIAN, which exchanges it with the IRS.
That is why your bank asked for your W-9, your US passport, or a self-certification of tax residence when you opened the account. It is also why the data flows whether or not you file. Separately, the 2014 Tax Information Exchange Agreement lets the two administrations request taxpayer information directly.
The structural unfairness is worth naming: because there is no US–Colombia income tax treaty, Americans in Colombia get the full information-reporting relationship and none of the treaty reliefs — no reduced withholding, no tie-breaker, no totalization. Reporting without benefits. It is what it is, and the answer is to comply cheaply rather than expensively.
What about Colombian investment funds?
Here is where reporting stops being clerical and starts having a tax cost.
If you hold a Colombian fondo de inversión colectiva or fondo de capital privado, the account itself is FBAR-reportable and may be reportable on Form 8938. The bigger question is how the fund is classified for US tax purposes, and it does not have one universal answer.
- A pooled vehicle that is a foreign corporation for US purposes and meets either PFIC test — 75% or more of gross income passive, or 50% or more of assets producing passive income — is a PFIC. A fund holding TES, bonds, CDTs and equities will normally meet those tests comfortably. The default §1291 regime is punitive: gains and excess distributions are allocated back over the holding period, taxed at the highest ordinary rate in effect for those years, and charged interest for the deferral. The QEF election requires a PFIC Annual Information Statement that Colombian administradoras do not issue, and the mark-to-market election is only available for marketable stock. The reporting form is 8621, one per fund.
- But many Colombian FICs and fondos de capital privado are structured as patrimonios autónomos — segregated asset pools administered by a fiduciaria or comisionista. A structure like that may be better characterised as a foreign trust, pointing to Forms 3520 and 3520-A rather than Form 8621. The same is true of fiducias mercantiles.
So the correct form may be 8621, or 3520/3520-A, or both, depending on the fund’s actual documents. This requires an entity-classification analysis fund by fund, and it should be done by a professional before you invest rather than after. Do not accept a blanket answer in either direction.
Failure to file a required Form 8621 can keep the assessment period open for the entire return under §6501(c)(8) — in practice, the year never closes.
A fifteen-minute task, or a fixable problem
The FBAR threshold is low, it is an aggregate, and it is measured at your highest point in the year, so most Americans living in Colombia meet it without noticing. Form 8938 has much higher thresholds for people abroad and usually only appears once a SAS shareholding or a real portfolio enters the picture. The FATCA agreement means the data is already moving regardless of what you file.
If you are current, this is a fifteen-minute annual task. If you are not, it is a fixable problem with a defined process — and the worst version of it is the one where you try to fix it quietly on your own.
Frequently asked questions
Do I file an FBAR if I never had more than $10,000 in any single account? Probably yes. The test is the aggregate of all your foreign accounts at their highest point during the year, not the balance of any one account.
Does a Colombian account belonging to my company count? If you have signature authority over it, yes — the FBAR reports accounts you can sign on even when you have no financial interest in the money. This routinely catches Americans who are the representante legal of a Colombian SAS.
I filed my tax return. Does that cover the FBAR? No. The FBAR goes to FinCEN through the BSA E-Filing System, separately from your return, and is not covered by a Form 4868 extension. It has its own automatic extension to 15 October.
Do I have to file both the FBAR and Form 8938? If you meet both thresholds, yes — one does not substitute for the other. Most people abroad meet only the FBAR threshold.
Is my fondo de inversión colectiva a PFIC? Usually a Colombian collective fund is treated as a PFIC, but the classification depends on the fund’s structure. Where the vehicle is a patrimonio autónomo it may instead be a foreign trust, pointing to Forms 3520/3520-A. Have the fund’s documents reviewed before assuming which form applies.
If you have Colombian accounts and no FBARs on file, that is a solvable problem. The Colombian Accountant works with Americans in Colombia on both sides of the filing — including bringing people back into compliance without drama. Get in touch.
This article is general information, not tax or legal advice. Figures were verified on 9 September 2026 and change frequently — the FBAR penalty amounts in particular are adjusted periodically, and Colombian tax law changed materially between December 2025 and September 2026. Confirm current figures and your own circumstances with a qualified professional before acting.