Streamlined Foreign Offshore Procedures – Quick Facts
IRS Streamlined Program Rules
- If you are a non-resident US taxpayer whose foreign account noncompliance (including the failure to file FBARs, Form 8938s, etc. and/or failure to pay income tax on earnings from unreported foreign assets) was non-willful, the Streamlined Foreign Offshore Procedures is a dramatically less expensive and less onerous way to resolve your US tax problems. The requirements, if you qualify, are:
Amend (or file for the first time) the last three years of US tax returns to report earnings from foreign assets, paying the necessary tax and interest
File (or amend) six years of Foreign Bank Account Reports (also know as FBAR or FinCEN Form 114)
Only non-willful taxpayers qualify for the IRS Streamlined Program, and only an attorney can properly analyze whether you are non-willful. A Streamlined filing compliance attorney will know what information is relevant to this determination, what the evidence means, and will analyze and write a convincing examiner-ready memorandum establishing your non-willfulness.
No matter where you reside in the world, call Streamlined Foreign Offshore Program tax attorney Andrew L. Jones now at (415) 745-1924 for a free, fully confidential consultation to determine if you are eligible for the program! We are currently accepting clients around the world, which means that no matter where you are currently located, you do not need to rely on local, inexperienced tax counsel (or high-volume, low-expertise ‘expat tax services’) to address your FBAR and US tax violations. Experience matters – working with a US tax attorney with a practice exclusively dedicated to IRS voluntary disclosure means no surprises and no learning on the job.
Interested in learning more about the Streamlined Filing Compliance Procedures offered by the IRS? Keep reading!
The IRS Streamlined Option – Formally Known as the Streamlined Foreign Offshore Procedures – Allows Non-Resident US Taxpayers to Avoid All Penalties for Failing to (a) Timely or Completely File FBARs or Forms 3520, 3520-A, 5471, 8865 or 8938 or (b) Report Earnings From Foreign Assets
On June 18, 2014, the IRS created a new option for non-resident US taxpayers who failed to file FBARs, Forms 3520, 3520-A, 5471, 8865 or 8938 reporting various foreign assets. This option, called Streamlined Foreign Offshore Procedures (occasionally referred to by the acronym “SFOP” or “SFO,” allows certain US persons who (a) spent less than 35 days inside the physical borders of the US in one or more of the last three past-deadline tax years and (b) failed to report certain foreign accounts or assets to the IRS through the above-mentioned Forms, to make a voluntary disclosure without penalty.
In a nutshell:
- If you failed to:
- File a Foreign Bank Account Report (FBAR) and/or,
- File a Form 3520 and/or,
- File a Form 3520-A and/or,
- File a Form 5471 and/or,
- File a Form 8865, and/or
- File a Form 8938 and/or,
- Failed to report income from foreign assets
- And your failure was non-willful, then the IRS Streamlined Program – formally known as the Streamlined Foreign Offshore Procedures – allows you to resolve your non-compliance and avoid significant civil penalties, all for zero penalty – even though other US taxpayers otherwise identical facts but with more than the 35-day limit in all three of the last years, must disclose through the Streamlined Domestic Offshore Procedures and pay a 5%-of-undeclared-assets penalty.
IRS Streamlined Program Requirements
The IRS Streamlined Offshore Reporting Program requires a taxpayer to make a voluntary disclosure of their non-compliance by:
- Filing three years of amended tax returns (the most recent three for which the due date has passed) to report undeclared income from their foreign assets
- Pay the tax that is due on those amended returns, plus statutory interest
- Submit extensive supporting documentation specific to the Streamlined program, in particular, the Certification of Non-Willfulness
Eligibility for the Streamlined Foreign Offshore Procedures Hinges on Taxpayer Willfulness
Streamlined is only available to those taxpayers whose noncompliance was ‘non-willful,’ and requires participants to thoroughly document the non-willful nature of their noncompliance through a Certification of Non-Willfulness.
Willfulness is an extremely complex legal standard but can be summarized as “an intentional violation of a known legal duty” (see Cheek v. United States).
Only a Qualified Streamlined Foreign Offshore Procedures Tax Attorney Can Properly Advise You Regarding Willfulness, And Write the Necessary Legal Argument (Certification of Non-Willfulness)
The involvement of a qualified Streamlined Procedures tax attorney is critical in all phases of the Streamlined process, including:
- Determining whether the taxpayer was willful. Willfulness is a legal standard set forth in the statutory law, and articulated in case law (court decisions). Non-attorneys (CPAs, enrolled agents or other ‘consultants’) are not qualified to make this determination.
- Writing a persuasive Certification of Non-Willfulness which anticipates and neutralizes all the IRS’ lines of attack relating to possible willfulness and ‘bad facts.’ The goal is to show the examiner that the IRS cannot establish (to the necessary standard of proof) that your failures to file International Information Returns (e.g. Forms 3520, 3520-A, 5471, 8865 or 8938) and/or pay US tax were willful. If the IRS examiner concedes that your failure was non-willful in nature, the IRS will by definition approve the Streamlined filing.
- Guiding and carrying out the collection of evidence relevant to the taxpayer’s willfulness or non-willfulness. Because willfulness is almost always determined by circumstantial evidence, a voluntary disclosure tax attorney will know the statutory law, the case law, and the current thinking at the IRS regarding what evidence indicates – or does not indicate – willfulness.
- Overseeing the proper amendment of three years’ of tax returns, which is particularly important in the case of less-common types of foreign assets including foreign retirement plans, foreign annuities, closely-held foreign business interests, etc.
- Preserving attorney-client privilege. Virtually any information provided to a non-attorney can and will – if necessary – be obtained by the IRS. Hiring and working directly with a tax attorney preserves your rights.
- Preparing all of the necessary documents in the submission, which include the amended returns, FBARs, Forms 3520, 3520-A, 5471, 8621, 8865 and 8938, and all supplementary Streamlined Disclosure documentation.
Streamlined Foreign Offshore Procedures tax attorney Andrew L. Jones is highly qualified to provide you swift, effective and fully-confidential representation for your voluntary disclosure:
- Andrew has guided dozens of clients through the collective disclosure of over $27 million in previously-unreported foreign assets; the median disclosure was $360,000 (numbers as of 1/29/2015).
- Not a single one of Andrew’s clients’ Streamlined Domestic Offshore or Streamlined Foreign Offshore filings have ever been challenged or rejected by the IRS.
- Andrew personally handles every part of the legal process of your voluntary foreign account disclosure, responds personally and rapidly to all your calls and messages, and personally supervises the accounting phase (amendment of returns) of the client engagement. Ask our competition: we think you’ll quickly learn that no other law firm offers this personal service commitment.
We are available by phone at (415) 745-1924. We answer your calls from 9 am-9 pm Pacific Standard Time, 7 days a week. After hours, please leave a voice mail providing only your name, a preferred call-back number (and time to call back) or send us an email (address provided at our contact page) and we will reply the next morning. If you’re concerned about working at a distance with a tax attorney, read more here.
Call Streamlined Foreign Offshore Program tax attorney Andrew L. Jones now at (415) 745-1924 for a free, fully confidential consultation to determine if you are eligible for this faster, simpler and less expensive option to solve your foreign account problems!