IRS Streamlined Filing Services
Eligible taxpayers may use the IRS Streamlined Filing Compliance Procedures to catch up on missed U.S. tax returns, FBARs, and certain international information returns.
Generally, these procedures apply when the failure to file, report foreign financial assets, or pay tax did not result from willful conduct.
For U.S. citizens and green card holders in Canada, Streamlined Filing often includes both U.S. tax return preparation and foreign account reporting.
In addition, the process may require a review of Canadian accounts, investments, retirement plans, and prior-year filing history.
Need help reviewing Streamlined Filing eligibility?
Our process starts with the facts. Then, we identify the filing years, organize the forms, and prepare a coordinated compliance plan.
Who the Streamlined Procedures May Help
The streamlined procedures may help taxpayers who missed U.S. filings because of non-willful conduct.
However, eligibility depends on the taxpayer’s facts, filing history, residency, and conduct.
For example, this issue often affects U.S. persons in Canada who did not know they still had U.S. filing obligations while living outside the United States.
- U.S. citizens living in Canada
- Green card holders living in Canada
- Missed prior-year U.S. tax returns
- Delinquent FBAR filings
- Missed Form 8938 or other international forms
- Canadian bank or investment accounts
- Canadian mutual funds, ETFs, or PFIC issues
- A need to certify non-willful conduct
Streamlined Foreign Offshore vs. Streamlined Domestic Offshore
The IRS has one streamlined procedure for eligible taxpayers outside the United States and another for eligible taxpayers inside the United States.
As a result, the first step is usually to determine which procedure may apply.
Streamlined Foreign Offshore Procedures
These procedures generally apply to eligible taxpayers who meet the IRS non-residency requirement and certify non-willful conduct.
For many U.S. persons in Canada, this procedure is often the starting point.
Streamlined Domestic Offshore Procedures
These procedures generally apply to eligible taxpayers residing in the United States.
They may involve a miscellaneous offshore penalty. Because this page focuses on U.S. persons in Canada, the foreign offshore procedure is often more relevant.
What Must Be Filed?
A Streamlined Foreign Offshore submission usually includes several parts.
However, the exact package depends on the taxpayer’s facts, prior filings, accounts, and years involved.
Three Years of U.S. Tax Returns
Generally, the taxpayer files the most recent three years of delinquent or amended U.S. income tax returns for which the due date has passed.
Six Years of FBARs
In addition, the taxpayer generally files six years of delinquent FBARs for reportable foreign financial accounts.
Form 14653 Certification
The taxpayer must also certify that the failure to file, report income, report foreign financial assets, or pay tax resulted from non-willful conduct.
Tax and Interest Payment
Finally, the taxpayer generally submits payment for any tax due and applicable statutory interest with the streamlined package.
Non-Willfulness Is Central
The non-willfulness certification is one of the most important parts of a Streamlined Filing submission.
Non-willful conduct generally means conduct due to negligence, inadvertence, mistake, or a good faith misunderstanding of the law.
Therefore, the certification should explain the taxpayer’s facts clearly and consistently.
A short or generic explanation may not tell the full story. On the other hand, an overly broad or inaccurate explanation can create its own risks.
Common Streamlined Filing Issues
Streamlined Filing often requires more than three U.S. returns and six FBARs.
In many cases, the submission also requires review of accounts, investments, income, and missed international forms.
- Streamlined Foreign Offshore eligibility review
- Late or amended U.S. tax returns
- Six years of FBAR filings
- Form 8938 and other information return review
- Form 14653 narrative support
- Canadian TFSA, RESP, FHSA, RRSP, and investment account review
- PFIC and Form 8621 issue identification for Canadian funds
- Coordination with Canadian T3, T5, and T5008 slips
- Tax, interest, and foreign tax credit calculations
- Comparison with other possible compliance options
Related Foreign Reporting Issues
Many Streamlined Filing matters involve foreign account and asset reporting.
For U.S. persons in Canada, this often includes Canadian bank accounts, investment accounts, registered accounts, and non-U.S. investment funds.
In addition, some taxpayers may need to review Form 8938, Form 8621, Form 3520, Form 5471, or other international information returns.
Therefore, the required forms depend on the taxpayer’s assets, ownership interests, account values, and prior filings.
FBAR and Form 8938
Foreign account and asset reporting may apply even when the related income was reported.
FBAR and Form 8938 have different filing systems, definitions, and thresholds.
PFIC and Form 8621
Canadian mutual funds, ETFs, high-interest savings ETFs, and other pooled investments may create PFIC and Form 8621 reporting issues.
Therefore, these investments should be reviewed early in the process.
Will I Owe Tax, Penalties, or Interest?
A streamlined submission may result in U.S. tax and interest if the late or amended returns show tax due.
However, the result depends on income, deductions, foreign tax credits, exchange rates, and other facts.
For many U.S. persons in Canada, Canadian tax paid may reduce or eliminate U.S. tax through foreign tax credits.
Nevertheless, the calculations still need careful preparation.
In some cases, the Streamlined Foreign Offshore Procedures may provide penalty relief. Even so, the IRS can still review the submission.
What Happens After Submission?
Generally, the streamlined process does not result in a closing agreement or formal acceptance letter from the IRS.
Instead, the taxpayer usually submits the package and later monitors IRS account activity.
The IRS may process the returns, request more information, assess tax or interest, or select the submission for review. For that reason, the filing package should be organized and internally consistent.
How We Help
US Taxes Toronto helps U.S. citizens, green card holders, and other U.S. persons in Canada review Streamlined Filing issues and organize a practical compliance plan.
Depending on the engagement, assistance may include:
- Streamlined Filing eligibility review
- Required filing year identification
- Late or amended U.S. return preparation
- FBAR filing preparation
- Form 8938 and other foreign reporting form review
- PFIC and Form 8621 issue review
- Foreign tax credit calculations
- Supporting record organization
- Form 14653 narrative drafting
- Comparison of Streamlined Filing with other compliance options
What Happens Next
Streamlined Filing situations vary widely. Therefore, the first step is to understand your filing history, residency, accounts, income, and why the filings were missed.
Initial review
- Review of your U.S. filing history and residency facts
- Identification of missed returns, FBARs, and information forms
- Streamlined eligibility and non-willfulness review
- Initial review of PFIC, Form 8938, or Canadian reporting issues
Next steps
- Explanation of which filings may be required
- Preparation of returns, FBARs, and supporting schedules
- Organization of the Form 14653 certification narrative
- Review of the submission process before filing
Frequently Asked Questions
Is Streamlined Filing available to everyone?
No. Taxpayers must meet IRS eligibility requirements, including the non-willfulness certification. In addition, the correct procedure depends on whether the taxpayer resides inside or outside the United States.
How many years are filed under the Streamlined Foreign Offshore Procedures?
Generally, the procedure requires three years of U.S. income tax returns and six years of FBARs. However, the exact package depends on the taxpayer’s facts and years involved.
What is Form 14653?
Form 14653 is the certification form for U.S. persons residing outside the United States who use the Streamlined Foreign Offshore Procedures. It includes the non-willfulness certification.
Do I need to include Canadian accounts on FBARs?
Possibly. For U.S. persons, Canadian financial accounts are generally foreign financial accounts. Therefore, account values and ownership should be reviewed.
What if I own Canadian mutual funds or ETFs?
Canadian mutual funds, ETFs, and similar pooled investments may create PFIC and Form 8621 issues. Therefore, these investments should be reviewed before filing.
Will the IRS send an acceptance letter?
Generally, the IRS does not issue a formal closing agreement or acceptance letter. As a result, taxpayers usually monitor processing and account activity after filing.
Official IRS Resources
For official IRS guidance, you can also review the following resources:
- IRS Streamlined Filing Compliance Procedures
- IRS Streamlined Foreign Offshore Procedures
- IRS Form 14653 information
- IRS Delinquent FBAR Submission Procedures
- IRS Delinquent International Information Return Submission Procedures
Need Help With IRS Streamlined Filing?
If you are a U.S. citizen, green card holder, or other U.S. person in Canada with missed U.S. returns, FBARs, or foreign reporting forms, consider reviewing your compliance options before filing.
Our firm can help evaluate the facts, identify the required filings, organize the records, and prepare a clear Streamlined Filing compliance plan.
Disclaimer: This page provides general information only. It does not constitute legal, tax, accounting, investment, or financial advice.
Streamlined Filing eligibility and reporting obligations depend on the specific facts, residency status, filing history, income, accounts, assets, foreign reporting forms, prior conduct, and applicable law. Therefore, obtain advice based on your own circumstances before taking action.