If you’re behind in filing taxes with the IRS, you may be eligible to catch up using Streamlined Filing Procedures. Streamlined is intended for taxpayers that acted non-willfully and do not have criminal exposure or exposure to civil fraud penalties and willful FBAR penalties.
Streamlined Filing Procedures were updated in 2014 to create Streamlined Foreign Offshore (SFO) and Streamlined Domestic Offshore (SDO). The eligibility requirements for SFO:
- US Individuals and estates only
- Failed to report Foreign Financial Assets and pay all tax due in respect of those assets
- Able to certify failures are related to non-willful conduct
- Not currently under IRS examination
- Have a valid Taxpayer Identification Number (ITIN/SSN)
NOTE: If you do not have an ITIN, you may submit an application for ITIN along with the required tax returns. For more information on how to apply for ITIN, contact ITIN4U.com
Streamlined Foreign Offshore requirements:
- Meet non-residency requirement
must not have US abode AND
physically outside the U.S. for at least 330 full days in a calendar year in ONE of the last 3 years in your streamline submission period.
IF married filing jointly, both taxpayers must meet the non-residency requirement.
- You can be a non-filer. If you have not filed US Federal tax return, you can catch up and come into compliance with the IRS.
- You may also amend previously filed US Federal tax returns
Non-Willful conduct is defined as: “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.”
Must provide a Non-Willful Certification:
- Provide 3 most recent tax years for which the deadline has passed
- Provide 6 most recent FBAR
- Acknowledge possibility of examination
- Expected future compliance for ALL Future filing years
When writing your SFO explaination of non-willful compliance, provide specific reasons
Benefits of SFO
SFO taxpayers are not subject to any penalties
- No accuracy penalty
- No delinquency penalty
- No miscellaneous Offshore penalty
If you would like to discuss how to come into compliance with the IRS and file using Streamlined Filing Compliance, please get in touch.