What is the IRS Streamlined Procedure?
The official program name is the IRS Streamlined Offshore Filing Procedure or IRS Streamlined Procedure. It’s commonly known as the IRS Streamlined Tax “Amnesty” program because, in reality, that’s what it is… an Amnesty program to help US citizens and Green Card holders catch up on their US tax returns without the fear of fines and penalties. It is a temporary program. Originally there were three Amnesty programs, but now only Foreign Offshore Filing Procedure remains. The IRS will not tell us when it’s going to end, because they don’t want lots of people waiting until the last minute to use the program.
It’s for American citizens that didn’t know they had to file U.S. tax returns each year, and have therefore fallen behind. Some more than 30 years!
Start now here…
My tax returns are up to date but I have not filed FBARs for all my non-US accounts, what should I do?
The filing options will depend on whether or not you have reported the interest from these bank accounts on the tax returns that you’ve already filed.
If you have reported the interest on your filed tax returns, you should file the FBARs using the Delinquent FBAR Submission Procedure.
If you haven’t included interest from these non-US accounts, you should file amended tax returns through the Streamlined Foreign Offshore Procedure along with 6 years of Foreign Bank Account Reports.
What’s the process and tax amnesty timeline?
How to file streamlined filing compliance procedures:
We start by asking you to complete our IRS Streamlined Questionnaire
You’ll be contacted by our Client Services Team. They will confirm the fee if we haven’t already done so.
We’ll assess your information and let you know what documents to provide.
Upload your documents, then sit back and leave the hard work to us. Your Streamlined tax return package will be ready in approximately 20-25 working days. Complex returns can take longer.
Can a married couple file under the IRS Amnesty Program together?
Yes, married couples can file for a joint Streamlined procedure, provided that they file together and the spouse has a valid Social Security Number or ITIN. The standard fee will apply whether there are one or two people on the tax return. We don’t charge any additional fee to add a spouse to a tax return.
Also, if you have dependent children, check if you’re eligible
for the Child Tax Credit Refund.
Can I still use the streamlined tax amnesty if I’m planning to move back or have already moved back to the US?
If you have lived abroad for at least one year out of the last three years, you can use the Streamlined Offshore Filing Procedure. If you haven’t been living abroad, you can use the Streamlined Domestic Filing Procedure. This is a separate program and some of the benefits are different compared to the Offshore Streamlined program.
I haven’t filed my tax returns for more than 10 years, will that be a problem?
No. Should you choose to go through the Streamlined Procedure, how long you haven’t filed will not be an issue; the IRS will no longer pay attention to neglected tax returns prior to 2017 as long as you promise to file each year going forward.
We will prepare and file your 2017, 2018 and 2019 US tax returns and your non-US bank account reports for the last 6 years (FBARs).
My tax returns are filed, but I did not file a 5471 for my foreign corporation, what should I do?
Many Americans living abroad don’t realize the complications that occur once they open a Limited Company. As far as the IRS is concerned, you’re now a “Foreign Corporation Owner”. IRS Tax Form 5471 is complicated, there’s no other word for it, and we highly recommend this is prepared by an IRS licensed tax professional.
Under the protection of the Streamlined Amnesty program, we’ll refile your returns, including the correct IRS Forms for your Company or Partnership.
We’ll assess your company for Transition Tax and GILTI Tax compliance.
Read more about 5471.
How does the IRS Streamlined Procedure work?
There are three main parts;
- Your last 3 years of tax returns
- 6 years of Foreign Bank Account Reports (FBARs)
- Streamlined Certification.
Currently, we’re filing 2017, 2018 and 2019 federal tax returns. This will change to tax years 2018, 2019 and 2020 in April 2021, should the IRS allow the temporary program to continue into the next tax year.
Along with the 3 years of tax returns, we’re filing FBARs for 2013 through to 2019.
The Streamlined Certification is basically a letter to the IRS explaining why you haven’t been filing. Many people worry about this part the most, and some tax firms leave clients to deal with this part on their own! Not at Expat Tax Online… our clients simply tell us in their own words and we take care of the rest.
What reasons are acceptable?
The most common is simply “I didn’t know” and if that’s the truth, it’s good enough.
It is complicated, but all the hard work is done on our side, it really isn’t difficult for you at all.
By using this amnesty program, you can forget about previous years, the IRS promises not to look back any further than 2017 as long as you promise to keep filing each year going forward. On top of that, the IRS promises no fines and no penalties!
Why can’t I just simply file my overdue tax returns?
Filing your US taxes late or failing to report FBARs can subject you to many penalties. The main 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, you only have to file the last 3 years of tax returns, even if you haven’t filed for 20 years! Once you’ve completed the program, you’ll be completely tax compliant with the IRS.
Simple tax situations can create big penalties!
Too many people think that if they don’t owe the IRS any tax, there wouldn’t be any penalties anyway… so what’s the point?
Here’s an example… Michelle works as a Teacher in the United Kingdom earning £38,000 per year. Michelle’s employer contributes £1,500 every year to her UK pension. Michelle also decides to add a further £2,000 per year to her pension, because that reduces her UK tax and it’s a smart way to save for retirement.
After 10 years of working in the UK, Michelle discovers she should have been filing US tax returns. She decides to go it alone and simply file the last 3 years of tax returns herself.
A few months after filing, Michelle receives 3 penalties from the IRS at $10,000 each.
Michelle did the right thing in terms of filing IRS Tax Forms 3520 and 3520-A for her pension contributions. The filing deadline for Form 3520-A is March 15 each year. Michelle filed them late. The late filing penalty is $10,000.
If Michelle had used the IRS Streamlined Procedures… she wouldn’t have received any penalties.
This is just one example and there are many more.
How do I qualify?
The program was originally intended for individual taxpayers who were considered to be “low risk” or had minimal returns to be filed. This excluded a lot of expats which, in turn, did not resolve the problem at hand. Fortunately, the IRS expanded its scope in 2014, paving way for more taxpayers to have access to the said program.
✔ Are a US Taxpayer, residing outside the United States
✔ Are working as an employee or self-employed
✔ Own a company outside of the United States
✔ Have any non-US financial accounts, such as bank account in your local country
✔ Weren’t aware that you needed to file US Taxes while abroad in the first place
Then, the Streamlined Tax Amnesty Program is for you!
Join the 48,000 American Expats who have benefited from this program!
✔ No penalties or late-filing fees
✔ File for only 3-years’ of overdue tax returns
✔ Team up with Expat Tax Online with our 100% acceptance rate
See our related IRS Streamlined Procedure blogs:
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