The Streamlined Foreign Offshore Procedure, also known as the Streamlined Tax Amnesty program, is an initiative by the IRS designed to help US citizens living abroad, including those unintentionally considered US taxpayers, fix past errors in filing US tax returns and FBARs without facing penalties.
In general, the reason why the Streamlined Tax Amnesty Program is so popular is that it absolves you from any fees and penalties related to late filings and payments. Also, even if you haven’t filed for 20 years, you’ll only have to file the last 3 years of your tax returns. Once you’re finished with the program, you’ll be completely tax compliant with the IRS.
Who is eligible for the Streamlined Procedure?
Eligibility for the Streamlined Procedure is specifically designed for US taxpayers residing outside the United States who have failed to file tax returns, FBARs, or both, due to non-wilful actions.
To qualify, you:
are a US Taxpayer, residing outside the United States
are working as an employee or self-employed
have any foreign bank accounts outside of the US, such as a bank account in your local country
weren’t aware that you needed to file US Taxes while abroad in the first place
How does the Streamlined Procedure work?
Participants need to file the last three years of tax returns and six years of FBARs to comply with the program’s requirements. They must also complete an offshore certification form, explaining their reasons for previous non-compliance and affirming their commitment to follow US tax laws going forward.
The process involves submitting these documents via mail, with tax returns needing to be signed in ink, although FBARs can be filed electronically.
What are the benefits of the Streamlined Procedure program?
The primary benefit of the Streamlined Procedure is the waiver of penalties usually imposed for late payment of taxes and failure to file FBARs.
This protection is only available if the taxpayer meets all the eligibility and filing requirements correctly.
Step-by-Step guide to filing under the Streamlined Procedure
Document Collection: Gather all necessary documents for the last three years of U.S. tax returns and six years of FBARs. This includes records of all overseas financial accounts and related income.
Certification of Non-willfulness: Complete the required certification form that states your failure to file was due to non-willful reasons.
Professional Assistance: Consulting with a licensed tax professional is highly advisable. These experts can ensure that all forms are correctly filled out and that the filing complies with IRS requirements.
Submission: Tax returns must be mailed to the IRS with original signatures. While FBARs are submitted electronically.
Is it normal to feel intimidated when filing for the Streamlined Procedure?
Yes, it is. It is usually because you’ll encounter trouble understanding the eligibility criteria. However, even if you’ve gotten past that and you’re still not confident in filing, you can get a tax professional for support.
They can look over your submission and ensure that everything is in order, helping you fix mistakes and possible major oversights you might have missed.
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