IRS Amnesty Programs

The IRS have introduced 2 voluntary disclosure programs which allow the opportunity for US Citizens and Green Card holders living outside the USA to become tax compliant with minimum (or possibly zero) penalty implications.

Streamlined Filing Compliance Procedure

This would be the route for the majority of individuals contacting us. The IRS streamlined filing compliance procedure provides the opportunity for those who qualify, to enter an IRS sanctioned procedure, which could result in no penalties being assessed. The IRS program which began on 1stJuly 2014, is broadly available to all taxpayers provided they have not been the subject of civil/criminal investigation by the IRS and they can prove that their actions or omissions were non-wilful.
In general, the procedure would involve the filing of 3 years US Tax Returns (1040) ad additional forms and also the filing of 6 years FBAR Filing (The disclosure of the taxpayers’ bank balances outside the USA)

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Offshore Voluntary Disclosure Program

Where taxpayers are not clear whether their omissions are non-wilful there is also the Offshore Voluntary Disclosure Program (OVDP) to as an alternative to the above scheme.
The OVDP was also modified as of 1 July 2014 to bring it up to date and offer criminal protection to those who have or may have been wilful in their omissions to file returns or report foreign income and assets.
This program involves the submission of eight years of tax returns, information returns and FBARs, a 20% accuracy penalty on any tax due, late payment interest and fines.
For these reasons the Streamlined Option would be the first choice for most taxpayers intending to become tax compliant.
We have already assisted many US Expat taxpayers through these programs with successful outcomes

 

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