DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES [DIIRSP]
Have streamline advisory assist you with delingquent international information return submission procedures [diirsp]
Are you behind in filing international information returns, including FBARs?
Delinquent International Information Return Submission Procedures are an efficient, penalty-free way to become tax compliant.
To learn more, schedule a FREE discovery call with us today.
IF YOU OWN FOREIGN FINANCIAL ASSETS, YOU’RE REQUIRED TO:
- Report them on your tax returns
- Pay tax on foreign income, and
- File tax returns on time
The Delinquent International Information Return Submission Procedures (DIIRSP) are designed to bring you back into tax and reporting compliance if you own offshore accounts, assets, investments, and income.
Become Tax Compliant with DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION [diirsp]
As a US taxpayer, you are legally obliged to comply with laws for timely reporting, paying, and filing taxes on your worldwide assets. The US tax system is based on voluntary compliance. If you’re caught being out of compliance, there are strict penalties.
Delinquent International Information Return Submission Procedures were designed to encourage taxpayers with offshore financial assets to become tax compliant.
DIIRSP enables taxpayers to file missing international information returns, including FBARs, to disclose foreign financial assets correctly.
DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES HELP YOU
- File 1 or more missing international information returns, including FBARs,
- Avoid higher IRS penalties.
DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES [DIIRSP] PENALTIES
By using DIIRSP to get back into tax reporting compliance, you avoid:
- FBAR penalties,
- Non-compliance penalties.
There are currently no penalties for using Delinquent International Information Return Submission Procedures, provided:
- There’s no impact on your tax liability by filing the missing international information return,
- Your statement of reasonable cause for each delinquent return is accepted.
Are you eligible for the IRS DIIRSP?
ELIGIBLE FOR DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES
- You have reasonable cause to explain your failure to file international information returns
- You filed your original tax returns on time
- Unreported income won’t require substantive amendments to your original tax returns and won’t impact your tax liability
Not Eligible for DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES
- You’re unable to provide a reasonable cause statement for each delinquent international information return
- The IRS has already contacted you about delinquent returns
- You’re under audit or criminal investigation
- Unreported income results in substantive amendments to your original tax return and will impact your tax liability
Reasonable Cause
Reasonable cause means you exercised reasonable care to meet your tax obligations but were nevertheless unable to do so due to a sound excuse.
Sound excuses for failing to comply could include:
- Death,
- Illness,
- Incapacitation,
- Natural disasters.
To use DIIRSP, you must certify reasonable cause for each delinquent international information return to explain your failure to file.
The IRS will consider the facts and circumstances of your situation.
Foreign Financial Assets
Foreign financial assets refer to assets held outside the US, including:
- Bank and investment accounts maintained by a foreign financial institution,
- Stocks and securities issued outside the US,
- An interest in a foreign retirement/pension or deferred compensation plan.
Certain assets are not considered foreign financial assets by the IRS, including:
- Real estate outside the US.
FILE DELINQUENT INTERNATIONAL INFORMATION RETURNS USING DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES
INTERNATIONAL INFORMATION RETURNS
International information returns are used to summarize and disclose information about your foreign bank and financial accounts to the IRS and other government agencies.
Examples of international information returns include:
- Forms 3520, 3520-A, 5471, 5472, 8621, 8858, 8865, and 8938,
- FBARs.
If you hold foreign bank and financial accounts, you will have a requirement to file international information return forms. The specific forms you need to file depend on your circumstances.
FORM 8938 AND FBARs
There are 2 international information returns you must file as a minimum, if you hold foreign bank and financial accounts.
Form 8938:
- Must be filed if the aggregated value of foreign accounts was at or more than $50,000 (filing single)/$100,000 (filing jointly),
- Is submitted as part of your tax return to the IRS.
An FBAR:
- Must be filed if the aggregated value of all your foreign accounts at any time during the tax year was over US$10,000,
- Is submitted to FinCEN (Financial Crimes and Enforcement Network).
Do You Know Your Us Taxpayer Obligations?
Taxpayer Obligations for US Citizens
As a US citizen, you’re required to:
- Report all worldwide income,
- File tax returns on time, including international information returns such as FBARS,
- Pay taxes owing on your worldwide income.
All US citizens must file US tax returns, even if you’re living or working outside the US.
Taxpayer Obligations for Foreign Expats in the US
As a foreign expat and US resident for tax purposes, your tax obligations are the same as for US citizens. So you’re required to:
- Report all worldwide income,
- File tax returns on time, including international information returns such as FBARS,
- Pay taxes owing on your worldwide income.
Even if you’re not a resident for tax purposes, you’re still required to file US tax returns and pay US taxes. But you don’t need to report your offshore income and assets, and you’re not eligible for DIIRSP.
Resident vs Non-Resident Tax Status
You’re a US resident for tax purposes if:
- You’re a Green Card holder,
- You’re a visa holder, and you meet the substantial presence test.
Otherwise, you’re a non-resident for tax purposes.
Certain visas are exempt from the substantial presence test for a set number of years, including the J-1 visa.
Regardless of your tax resident status, you’re still required to file a US tax return.
SCOPE OF IRS DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES
If you’re eligible for DIIRSP, the program enables you to become tax compliant by:
- Filing 1 or more missing international information returns from prior years,
- Submitting a statement to establish reasonable cause for each delinquent return.
After completing DIIRSP, you’re expected to comply with the law for all future years and file all tax returns and international information returns such as FBARS according to regular US tax filing procedures.
STREAMLINED ADVISORY CAN HELP YOU GET BACK INTO TAX COMPLIANCE USING IRS DELINQUENT INTERNATIONAL INFORMATION RETURN SUBMISSION PROCEDURES.