The IRS Streamlined Filing Compliance Procedures

In June 2014 an updated IRS tax amnesty program, known as the Streamlined Program, was introduced. The purpose of the program is to bring foreign residents into compliance for reporting foreign accounts, assets, investments and income. It is a friendlier way to catch up with US taxes and become tax compliant without facing any penalties; a taxpayer who complies with the Streamlined Procedures will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties.

Filing Requirements 

U.S. taxpayers eligible to use the Streamlined Foreign Offshore Procedures must file delinquent or amended tax returns for the most recent three years for which the U.S. tax return due date has passed. Additionally, the U.S. taxpayer must file delinquent FBARs for the most recent six years for which the FBAR due date has passed. The full amount of tax and interest due must be paid with the filings.

Non-Willful Conduct 

The Streamlined Filing compliance procedures are available to taxpayers to certify that their failure to report foreign financial assets and pay all tax due did NOT result from willful conduct on their part. 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.

The taxpayer must include a Form 14653 (Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures) and include an explanation of non-willfulness.