Streamlined Filing Procedure

Understanding Streamlined Voluntary Disclosures

Streamlined Voluntary Disclosure is a program offered by the Internal Revenue Service (IRS) in the United States for taxpayers who have not been compliant with their US tax obligations, particularly regarding foreign financial assets and accounts. The program is designed to encourage individuals, including expatriates living abroad, to come forward voluntarily, disclose their previously undisclosed foreign assets and income, and become compliant with US tax laws.

Here’s how the Streamlined Voluntary Disclosure program works and its implications for expatriates abroad:

Eligibility

To qualify for the Streamlined program, taxpayers must meet specific eligibility criteria. For US expatriates, they must demonstrate that their non-compliance was non-willful, meaning they didn’t intentionally avoid their tax obligations. Additionally, they must certify that their failure to report foreign financial assets and pay taxes on foreign income was due to negligence, inadvertence, or mistake.

Submission Process

Taxpayers must submit several forms and documents as part of their disclosure, including amended tax returns for the previous three years, Foreign Bank Account Reports (FBARs) for the past six years, and a certification statement asserting their non-willful conduct. They are also required to pay any taxes due, along with interest and certain penalties.

Reduced Penalties

One of the significant benefits of the Streamlined program is the reduction or elimination of certain penalties. For eligible taxpayers, the IRS may waive penalties such as the FBAR penalty and the accuracy-related penalty. This can result in substantial savings compared to the penalties that may be imposed outside of the Streamlined program.

Avoiding Criminal Prosecution

Participating in the Streamlined Voluntary Disclosure program can help taxpayers avoid criminal prosecution for tax evasion or related offenses. By voluntarily disclosing their previously undisclosed foreign assets and income, taxpayers can mitigate the risk of facing severe legal consequences.

Compliance Going Forward

Upon successfully completing the Streamlined program, taxpayers are expected to remain compliant with their US tax obligations in the future. This includes reporting all foreign financial accounts and income on their tax returns and filing FBARs as required.

For expatriates living abroad, the Streamlined Voluntary Disclosure program provides an opportunity to rectify past non-compliance with US tax laws without facing excessive penalties or criminal prosecution. It allows them to come into compliance and avoid potential future issues with the IRS while ensuring they fulfill their tax obligations as US citizens or residents.

Let Us Assist You 

The Streamlined Voluntary Disclosure program represents a crucial opportunity to address past non-compliance issues without enduring excessive penalties or the threat of criminal charges. It’s a step towards peace of mind, ensuring that they meet their tax obligations as US citizens while avoiding potential future complications with the IRS. For assistance with the Streamlined Voluntary Disclosure program or any other tax-related inquiries, please contact our team of tax experts is here to guide you through the process of becoming compliant with US tax laws.