Penalty Free Program for Overseas Americans Delinquent on Tax Returns
Current years are 2020-2022 (Tax Returns) + 2017-2022 FBARs
To be eligible for the program It doesn’t matter what your income level is or how long you haven’t filed — this program allows you to start with a clean slate with amnesty from penalties. The increased scope of this program has opened the door to come into compliance without fear of penalties.
The regular price for Streamlined Procedure services if purchased separately:
|3 Years of Federal Tax Returns
|400 * 3 = $1,200
|6 Years of FBARs
|75 * 6 = $450
|Analysis of situation and applicability for the program
|Preparation of the IRS Certification by U.S. Person Residing Outside of the U.S statement for the Streamlined Procedure costs
|Preparation of the IRS Certification by U.S. Person Residing in the U.S statement for the Streamlined Procedure costs
|Streamlined Domestic Offshore Program (SDOP) Analysis
Same percent discount applies if your income is over $100,000 — the package then costs $1,500.
If your bank requires proof of US tax compliance, we can also prepare and mail them the U.S. Paid Preparer Certification and Notification. This service costs $150.
Do NOT contact the IRS in any sort of pre-emptive move. In the very odd case that they get in contact with you, let them know that you are working on compliance with us. Our usual turnaround is generally faster than any deadline they'll impose on you, anyway.
The best first contact to make is a completed tax return.
The problem lies on the IRS side. The current form http://www.irs.gov/pub/irs-pdf/f14438.pdf is intended to be opened in the latest version of Adobe Reader (you can't view it inside your browser).
In many cases not meeting all conditions for the Streamlined Foreign Offshore Procedure (i.e. having been previously contacted by the IRS) - is not a reason not to apply. There is no downside to applying for the Streamlined Foreign Offshore Procedure. If your application is rejected you will not be granted a waiver of penalties. However, you still can establish the Statute of Limitations. And - you do not give up the opportunity to get waiver of penalties if the IRS determines the facts presented on the Certification Letter satisfactory to prove the non-voluntary nature of tax delinquency.
If you happen to have factors that cross out any chance to be accepted into the program (i.e. not meeting the non-residency qualification test) - then we will help you file outside of the procedure under the same scope of filing years. As opposed to the Streamlined Procedure you will not automatically get amnesty from FBAR penalties - however, in most cases IRS does no apply penalties as long as you file voluntarily and provided full disclosure of your financial situation.
In a word - Yes.
The $1,500 per year tax limit is no longer a risk factor.
Processing of Streamlined Procedure submission normally takes between 90 to 120 days. You may, however, experience delays due to the IRS perennial high backlog.
You can check the status of your IRS tax account online: http://www.irs.gov/Individuals/Order-a-Transcript.
Most state tax departments also offer this option. For example, if you filed a NY state return you can create an account at http://www.tax.ny.gov/online and check your account status there.
For more info - see help.taxesforexpats.com
IRS no longer sends the Streamlined Program acceptance letters (they have done so in the past). So the best news you can have is not hearing anything from them.
If IRS needs additional documentation, the request will arrive approximately within 2 months after your filing.
IRS has two programs for taxpayers who are currently non-compliant with tax returns and FBARs - Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Procedure (SP). Most attorneys will recommend the OVDP while tax practitioners to favor the SP. We believe that most clients are significantly better served by the Streamlined Procedure.
OVDP - which does require a lawyer's assistance, means a huge expense for the client. It involves filing 8 years of tax returns, paying tax and penalties due for all years, paying FBAR civil penalties, and paying lawyer fees for OVDP assistance. In other words - it's a much better deal for the attorney involved than the client.
Streamlined Procedure, on the other hand, only involved filing 3 years of returns and 6 years of FBARs. Most importantly - the fees are automatically waived. The cost involved is also significantly cheaper (attorney cost alone for OVDP starts at $10,000 - on top of the tax preparation fees).
The only occasion where OVDP is preferred, is when the IRS has already started a civil investigation. In such case OVDP serves to keep the consequent penalties at bay.
The US treasury requires that US Citizens/GC Holders remain current and compliant with FBAR requirements for the last 6 years. Your filing option depends on whether you had non-reported interest from foreign bank accounts and whether you are subject to additional reporting requirements.
If you are at least a 10% shareholder in a foreign corporation, you have a requirement to file 5471. Failure to do so can carry very stiff penalties. https://www.taxesforexpats.com/we-help/small-business-owners.html
Pricing - in addition to fee for form 5471 (see below)
At TFX we have been preparing expat returns for over 25 years and have clients in 175 countries. Complex as they may be, someone needs to understand them, and filing US tax returns for Americans all over the world is all we do, day in and day out - rain or shine.
We built an innovative tax preparation system that enables us to provide different tax-related services to our clients no matter where they live.