The Streamlined Procedures offer a cost-effective method of disclosing unreported for many taxpayers. The penalties are generally much lower than those required under the Offshore Disclosure Program, but there are several requirements a taxpayer must meet to qualify for the Streamlined Procedures.
You Must Have Filed Your Last Three Tax Returns
Unfiled tax returns can disqualify you from using the Streamlined Procedures. If required to file, you must have filed a return for each of the past three years.
Unfiled tax returns can also cause many other problems with the IRS. If you haven’t filed your returns, you may need to talk to a tax attorney about your options.
You Can’t Be Under Audit
Being under civil examination will also disqualify you from using the Streamlined Procedures. Even if the audit has nothing to do with foreign bank accounts, you still won’t be able to use this offshore disclosure program.
You’ll also become ineligible to use the Streamlined Procedures if the IRS is investigating you for criminal tax violations.
You Must Certify Your Conduct Was Not Willful
The issue of willfulness is critical when deciding which offshore disclosure option to use. You should consult with a tax attorney to get a professional opinion on whether your conduct could be viewed as willful by the IRS.
You Must File Amended Returns and Delinquent FBARs
You’ll need to submit the following items when you use the Streamlined Procedures:
- Three years of amended tax returns and all required information returns, such as Form 8938
- Up to six years of delinquent FBARs
- Pay all delinquent taxes with interest, along with a miscellaneous offshore penalty of five percent of the highest balance of your foreign accounts (this penalty may be waived for taxpayers living overseas)
The Streamlined Procedures may result in substantial savings when compared to paying several years of FBAR penalties. The non-willful FBAR penalty can be up to $10,000 per violation, and other penalties may also apply.
To determine whether you may qualify to use the Streamlined Compliance Procedures, contact a tax attorney to discuss your case. Get free, no-obligation tax advice from an IRS tax resolution attorney by calling Ayar Law at 800.571.7175 today.