Streamlined Foreign Offshore Procedure
Learn more about Our IRS Streamlined Filing Services
The Internal Revenue Service has a number of amnesty programs available for filers that are not up to date and complaint with their annual tax filings. The amnesty program discussed below is referred to as the IRS streamlined foreign offshore procedure / filing and this is available for US taxpayers that reside outside the United States.
- You need to have been physically outside of the US for at least 330 days during one or more of the past 3 years (for which your tax filings are past due), and you cannot maintain a US abode.
- You need to have failed to report the income from a foreign financial asset and pay tax as required by US law, and you may have failed to file an FBAR (FinCEN Form 114) with respect to a foreign financial account, and such failures resulted from non-willful conduct.
- You need to have a valid Social Security Number.
- The IRS cannot have initiated a civil exam of your tax returns for any taxable year.
- If you have previously filed delinquent or amended returns, you must pay previous penalty assessments.
- The preparation and filing of 3 years of your most recent past due US federal income tax returns (1040 filings).
- The preparation and submission of 6 years of past due FBAR filings (Foreign Bank and Financial Account filings).
- The completion and signing of a certification statement (Form 14653). This certification has a number of components which include certifying that the failure to file was non willful, as well as a section where you need to provide the detailed reasons / explanation why you have failed to file up until this point.
You may owe taxes as a result of these filings. Each individual’s situation is different and depending on your income level and income types, you may have a net tax obligation to the IRS. If you live in Canada you will however be eligible to claim foreign tax credits for applicable tax paid to Canada and this will significantly reduce – and in many cases eliminate – any additional tax owed to the IRS.
Returns submitted under the Streamlined Foreign Offshore Procedures will not automatically be subject to an IRS audit. However these returns may be selected for audit under the existing audit selection processes applicable to any U. S. tax return. These returns may also be subject to verification procedures in that the accuracy and completeness of submissions may be checked against information received from banks, financial advisors, and other sources. Thus, returns submitted under the streamlined procedures may be subject to IRS examination, additional civil penalties, and even criminal liability, if appropriate.
After a taxpayer has completed the streamlined procedures, he or she will be expected to comply with U.S. law for all future years and file returns and FBAR’s according to regular filing procedures.
Tax returns submitted under the Streamlined Foreign Offshore Procedures will be processed like any other return submitted to the IRS. Consequently, receipt of the returns will not be acknowledged by the IRS and the streamlined filing process will not culminate in the signing of a closing agreement with the IRS.
How Can US Taxes Toronto Help?
We can assist with the preparation of your Foreign Offshore Streamlined Tax Filing. Our team provides hands on ongoing support throughout this process, so that preparing and completing your tax filing is convenient and easy. If you would like to get more information on how we can help please reach out to us via our contact page.
Disclaimer
All information provided on this IRS Streamlined Filing page is for educational purposes only. This information should not be relied upon in making decisions and we make no representation that the information provided is current / up to date or accurate.