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 delinquent FBARs (Foreign Bank Account Report)
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 OVDP Streamlined Option – Formally Known as the Streamlined Foreign Offshore Procedures – Allows Non-Resident US Taxpayers to Disclose Their Undeclared Foreign Accounts for Zero Penalty
On June 18, 2014, the IRS created a new option for non-resident US taxpayers who failed to file FBARs, Form 8938s, or other international asset reporting forms. This option, called Streamlined Foreign Offshore Procedures (occasionally referred to by the acronym “SFOP” or “SFP,” allows non-resident US taxpayer who failed to declare their foreign accounts to the IRS, to make a voluntary disclosure without penalty.
In a nutshell:
- If you failed to:
- File a Foreign Bank Account Report (FBAR),
- File a Form 8938,
- File a Form 3520,
- File a Form 5471, etc., 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 – allow you to resolve your non-compliance and avoid significant civil penalties, all for a much lower cost than a full Offshore Voluntary Disclosure Program submission.
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
Streamlined Foreign Offshore Procedures Are Hugely Less Expensive Than Disclosing Via the Offshore Voluntary Disclosure Program
Compare the above Streamlined costs to the costs for participation in the IRS OVDP program, which requires that you:
- Amend the last eight years of tax returns, and
- Pay a penalty equal to 20% of the unpaid tax over that period, and
- Pay a penalty of up to 25% of the unpaid tax over that period, and
- Statutory interest due on the unpaid tax over that period, and finally
- Pay a penalty equal to 27.5% of the highest composite balance of undisclosed assets at any one time in the last eight years.
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 resolve 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 OVDP Tax Attorney Can Properly Advise You Regarding Willfulness, And Write the Necessary Legal Argument (Certification of Non-Willfulness)
The involvement of a qualified OVDP 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 has no chance of showing (to the necessary standard of proof) that your failures to report and/or pay US tax were willful. If the IRS examiner concedes that your failure was non-willful in nature, the IRS must 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 retirement plans, annuities, closely-held business interests, etc.
- Preserving attorney-client privilege. Any information provided to a non-attorney can and will – if necessary – be obtained by the IRS. Hiring a tax attorney preserves your rights.
- Preparing all of the necessary documents in the submission, which include the amended returns, FBARs, Form 8938s, and all supplementary Streamlined Disclosure documentation.
Streamlined Foreign Offshore Procedures tax attorney Andrew L. Jones is highly qualified to provide you swift, confident and effective representation for your voluntary disclosure:
- He 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).
- None of his clients’ Streamlined filings have yet been challenged or rejected by the IRS, and he has a 100% success rate on Transition relief petitions to reduce pre-June 30, 2014 OVDP participants’ penalties from 27.5% to the non-willful 5% penalty rate.
- He personally handles every part of the legal process of your voluntary disclosure, responds personally to all your calls, and personally supervises the accounting phase (amendment of returns) of the client engagement. Experience is key, and The Law Offices of Andrew L. Jones will not hand your voluntary disclosure case to a new graduate to learn on your dime.
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!