Streamlined Filing and Everything You Need To Know

Get Back On Track

Living abroad is an exciting adventure for Americans who decide to pack up their things and travel the world. Some don’t even plan to live in the United States again. However, some expats don’t realize that they need to file US taxes even after several years abroad. Luckily, the IRS has solutions, such as, the Streamlined Filing Compliance Procedures, if you do find yourself in a predicament. The new adventures ahead of you are exciting but its important to make sure you are up to date on your old responsibilities.

The United States is one of two countries that employ a citizen-based taxation system. This means that they tax their citizens based on their worldwide income. The U.S State Department estimates that there are 9 million expats across the world. The likelihood of an expat not filing their US taxes simply because they did not know are pretty high. Don’t be afraid if this is you, the IRS Streamlined Filing Procedures is exactly what you are looking for and we will go over together what it is and how you can get back on track.

It is important to note there are two differing Streamlined Filing Procedures. There are

  1. Streamlined Foreign Offshore Procedures – This is the program you need if you need an American expat that is living offshore and needs to catch up on their tax reports.
  2. Streamlined Domestic Offshore Procedures – This program is available to current United States residents.

Do You Qualify?

To qualify for the Streamlined program you must meet these requirements:

  • You have lived in a foreign country for at least 330 days in that last three years and have not maintained a U.S. abode.
  • Honestly show that the reason for not filing was because of a misunderstanding.

Steps If You Qualify

  1. File an income tax for the last three delinquent tax years
  2. File an FBAR for the last six years
  3. Write and complete a statement (“Certification by U.S. Person Residing Outside of the U.S” statement or Form 14653) explaining why your tax returns and FBAR were not filed.
  4. Pay tax and interest that was due for the last three years.

Forms You Need

There will be forms you need to complete in order to be able to file under the Streamlined Compliance Procedures. If you qualify for this procedure you will need to complete each form for every FBAR and federal filing.

  • Form 1040 – US Individual Income Tax Return for your three years of federal tax returns
  • FinCen Form 114 – for your six years of FBARs
  • Form 14653 – to certify that your prior lack of filing was non-willful

Other common expat tax forms that may be required for your federal tax returns include:

  • Form 2555 – Foreign Earned Income Exclusion (FEIE)
  • Form 1116 – Foreign Tax Credit (FTC)
  • Form 8938 – Statement of Specified Foreign Assets (required per FATCA legislation)
  • Form 8833 – Treaty-Based Return Position Disclosure
  • Form 5471 – Information Return of US Persons With Respect to Certain Foreign Corporation
  • Form 8865 – Return of US Persons with Respect to Certain Foreign Partnerships
  • Form 8621 – Information Return by a Shareholder of a Passive Foreign Investment Company (PFIC)
  • Form 3520/3520A – Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts/Annual Information Return of Foreign Trust with a US Owner

How Can You Prepare

Organizing and Preparing all your needed documents is potentially overwhelming especially considering you are required to file returns for the last 3 years and FBARS for the last 6 years.

We highly recommend choosing Ameritax to help you prepare for your next Streamlined Filing Procedure. We will ensure that you are at peace of mind while you save time, money and the risk of an audit do to a lack of accuracy in your filing.

Don’t Worry About Penalties

Once you have completed filing under the Streamlined Filing Procedure the IRS will waive any late filing or late payment fees. Further you will also not be subject to failure-to-file, failure-to-pay and/or FBAR penalties.

Contact us today to get the help you need!

We are experienced tax associates who have years of experience who desire to help you understand and find the best solution for you. Don’t hesitate to call!