The Streamlined Filing Compliance Procedures offer taxpayers a less costly alternative for disclosing their unreported offshore accounts. There are several eligibility criteria. Make sure you meet all of them before using this offshore disclosure method.
Certification of Non-willfulness
Perhaps the most important requirement is that you must certify that your failure to file FBARs or report offshore income was non-willful. You shouldn’t guess about this issue—get an opinion from a tax attorney.
The Streamlined Procedures do not offer protection from criminal prosecution. If your conduct was willful, the IRS may pursue a criminal investigation and criminal FBAR penalties, which can include six-figure fines and the possibility of jail time.
Not Under Audit or Investigation
You can’t use the Streamlined Procedures if you are currently under audit. Even if the audit is totally unrelated to your foreign accounts, you don’t qualify. Likewise, you don’t qualify if you are being investigated by the IRS Criminal Investigations unit for any reason.
No Unfiled Tax Returns
As part of the Streamlined Procedures, you will be required to submit three years of amended tax returns. If you were required to file a return for one of these years but didn’t file it, you aren’t eligible for the Streamlined Procedures program.
Pay Tax Penalties
If you’ve previously made a quiet disclosure of your foreign accounts, you’ll have to pay any penalty assessment related to these disclosures. You may have been able to avoid these penalties if you used the Streamlined Procedures before making your quiet disclosure. This is one reason to always consult a tax attorney before making any type of voluntary disclosure.
Submit Amended Returns, FBARs, and Penalties
If you meet all of these conditions, you may proceed with the Streamlined Procedures. Along with your amended returns, you’ll need to submit up to six years of FBARs. You must also pay all taxes due on previously unreported foreign income and a miscellaneous offshore penalty of 5% of the highest aggregate foreign account balance during the disclosure period.
If you’re ready to make an offshore disclosure, contact a tax attorney to discuss your options.
The Gartzman Law Firm handles offshore disclosure matters and other tax resolution cases. Use our contact form to request a consultation with an Atlanta tax resolution attorney.