IRS amnesty program
This procedure is a friendlier and less costly approach to bring non-compliant Americans back into the tax filing system. The streamlined filing compliance procedures (“streamlined procedures”) are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. The streamlined procedures are designed to provide taxpayers in such situations with
- a streamlined procedure for filing amended or delinquent returns, and
- terms for resolving their tax and penalty procedure for filing amended or delinquent returns, and
- terms for resolving their tax and penalty obligations.
The streamlined procedures that were first offered on September 1, 2012 have been expanded and modified to accommodate a broader group of U.S. taxpayers. Major changes to the streamlined procedures include:
- extension of eligibility to U.S. taxpayers residing in the United States
- elimination of the $1,500 tax threshold, and
- elimination of the risk assessment process associated with the streamlined filing compliance procedure announced in 2012.
The modified streamlined procedures are designed only for individual taxpayers, including estates of individual taxpayers. The streamlined procedures are available to both U.S. individual taxpayers residing outside the United States and U.S. individual taxpayers residing in the United States. Descriptions of the specific eligibility requirements for the streamlined procedures for both non-U.S. residents (the "Streamlined Foreign Offshore Procedures") and U.S. residents ("Streamlined Domestic Offshore Procedures").
Streamlined Foreign Offshore Procedures
The Streamlined Foreign Offshore Procedures (SFOP) is the IRS offshore compliance program for non-U.S. residents — such as expats and accidental Americans.
The purpose of the program is to bring foreign residents into compliance for reporting foreign accounts, assets, investments and income. For the past few years, the Internal Revenue Service has been taking an aggressive approach to foreign accounts compliance. When a person has unreported offshore accounts, they may become subject to various IRS offshore penalties, such as FBAR penalties.
Benefits of the Streamlined Foreign Procedures
The Streamlined Foreign Offshore Procedures offer Taxpayers a complete penalty waiver. U.S. Taxpayers who qualify as foreign residents may benefit greatly from the Streamlined Foreign Offshore Procedures. It allows expats and non-residents to get into IRS tax compliance, without worrying about offshore penalties
Eligibility for Streamlined Foreign Offshore
In addition to having to meet the general eligibility criteria, individual U.S. taxpayers, or estates of individual U.S. taxpayers, seeking to use the Streamlined Foreign Offshore Procedures described in this section must:
- meet the applicable non-residency requirement described below (for joint return filers, both spouses must meet the applicable non-residency requirement described below) and
As provided by the IRS: “Individual U.S. citizens or lawful permanent residents, or estates of U.S. citizens or lawful permanent residents, meet the applicable non-residency requirement if, in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days. “
- have failed to report the income and file tax return was non-willful conduct. Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.
How to Submit to Streamlined Foreign Offshore Procedures
- most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed:
- 6-Years of FBAR Filing
- Complete and sign a statement on the Certification by U.S. Person Residing Outside of the U.S.(Form 14653) certifying:
- that you are eligible for the Streamlined Foreign Offshore Procedures;
- that all required FBARs have now been filed (see instruction 8 below); and
- that the failure to file tax returns, report all income, pay all tax, and submit all required information returns, including FBARs, resulted from non-willful conduct.
The documents listed above, together with the payments described above, must be sent in paper form (electronic submissions will not be accepted) to:
Internal Revenue Service
3651 South I-H 35
Stop 6063 AUSC
Attn: Streamlined Foreign Offshore
Austin, TX 78741 U.S.A