If you have not received a tax notice from the IRS or Department of the Treasury but did not report all of your foreign source / worldwide income, we can help you avoid significant tax liability and penalties.
Who can take advantage?
The streamlined filing compliance procedures are available taxpayers who acted non-willfully and failed to report foreign financial accounts or assets and pay all tax on income generated by those assets. The program applies to taxpayers who live in the U.S. or abroad.
How to file?
To file under the streamlined program, the individual must file three years of back tax returns. If they have already filed returns, they need to amend for any income not reported or informational returns not included. The individual must also file six years of back foreign bank account reports. They will also need to complete and sign a streamlined certificate.
Benefits of filing under the streamlined program?
The main benefits in addition to becoming compliant with U.S. tax and informational filings is a waiver of late filing penalties, underpayment penalties, accuracy-related penalties, information return penalties, and FBAR penalties. If accepted into the program, the IRS will close any years prior to the three years filed under the program even if you would have had a filing requirement. This effectively allows you to get out of paying any tax owed prior to the three year window. You will only pay tax on the three year’s returns and any interest on the amounts. For those individuals who have lived in the U.S. during the 3 year window, there will be a potential offshore penalty.
When to file?
There is no set expiration date for the streamlined program; however, the IRS has the right to revoke the program at any time. Anyone who qualifies should definitely consider filing under the program as soon as possible.
What if I don’t file?
If you are caught by the IRS you could face penalties of up to 27.5% on the balance of your foreign financial accounts or assets. You will have all open tax years examined which could go back indefinitely and owe tax, interest, and penalties. You may even face jail time and possible criminal penalties if fraud was involved.
Please reach out to us today for a free consultation to see if you qualify for one of these filing programs.