The IRS has outlined general eligibility requirements to enter into the Streamlined Filing Compliance for taxpayer who failed to report all foreign income, pay all tax, and submit all required foreign information returns including FBAR (FinCEN 114). These requirements include:
Depending on a taxpayer’s situation, they are eligible for one of two Streamline programs; the Streamlined Foreign Offshore Procedures where the taxpayer pays their tax and a 0% offshore penalty, and the Streamlined Domestic Offshore Procedures where the taxpayer pays a 5% penalty of their highest aggregate balance of foreign assets in addition to their tax. A 20% negligence penalty and interest back to the original filing dates of the returns is also due under both programs based on the amount of tax at issue on the three years of amended returns.
Streamlined Foreign Offshore Requirements (0% Penalty)
Included in this submission is Form 14653 – Certification by U.S. Person Residing Outside of the United States. The eligibility requirement includes:
Streamlined Domestic Offshore Requirements (5% Penalty)
Included in this submission is Form 14654 – Certification by U.S. Person Residing in the United States. The eligibility requirement includes: