STREAMLINED FOREIGN
OFFSHORE PROCEDURES
Get compliant with your tax obligations if you’re a US citizen living abroad and own foreign accounts, assets, investments, and income.
Have you failed to report or pay tax on income from foreign financial assets?
Have you lived outside the US for at least 330 days during one or more of the last 3 years?
Streamlined Foreign Offshore Procedures are an efficient, penalty-free way to become tax compliant.
To learn more, schedule a FREE consult 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 IRS Streamlined Foreign Offshore Procedures (SFOP) are designed to bring you back into tax and reporting compliance if you own offshore accounts, assets, investments, and income.
Become Tax Compliant with Streamlined FOREIGN Offshore
Streamlined Procedures were created by the IRS in 2012 to encourage taxpayers with offshore financial assets to become tax compliant.
They’re a tax amnesty program for amending and filing missing tax returns to enable correct reporting and paying tax on foreign financial assets. 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. The IRS Streamlined Foreign Offshore Procedures (SFOP) are for taxpayers living abroad. They’re designed to bring you back into tax and reporting compliance if you own offshore accounts, assets, investments, and income.
Streamlined foreign Offshore Procedures Help You
- File amended or missing tax returns together with required information returns for up to 3 years so that you can correctly report foreign financial assets
- Settle your outstanding tax obligations (plus any interest accrued) on income from foreign financial assets arising from filing amended or delinquent returns,
- File FBARs previously missing, for up to 6 years,
- Get amnesty from higher IRS penalties.
STREAMLINED FOREIGN OFFSHORE PROCEDURES PENALTIES
By using SFOP to get back into tax and reporting compliance, you get the benefit of amnesty from:
- FBAR penalties,
- Failure to file penalties,
- Accuracy-related penalties.
Currently there’s no penalty for using SFOP.
Are you eligible for the IRS Streamlined FOREIGN Offshore Procedures?
Eligible for Streamlined Foreign Offshore Procedures
- Your failure to report and/or pay tax on foreign financial assets is due to non-willful conduct
- You lived outside the US for at least 330 days during one or more of the last 3 years
- You’re an individual taxpayer
Not Eligible for Streamlined FOREIGN Offshore Procedures
- You’re unable or unwilling to certify your failure to report and/or pay tax on foreign financial assets is due to non-willful conduct
- You haven’t lived outside the US for at least 330 days during one or more of the last 3 years
- You’re filing taxes for a business
- You’re under audit or criminal investigation
- You failed to report income and/or pay tax on US financial assets only
Non-willful Conduct
Non-willful conduct is conduct resulting from:
- Negligence,
- Inadvertence,
- A mistake, or
- A good faith misunderstanding of the requirements of the law.
To use SFOP, you must certify your failure to report all income, pay all taxes, and submit all required information returns, including FBARs, was due to non-willful conduct.
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 AMENDED AND DELINQUENT TAX RETURNS USING STREAMLINED FOREIGN OFFSHORE PROCEDURES
Amended Tax Returns
Streamlined Foreign Offshore Procedures allow you to amend tax returns already filed for the last 3 years if you:
- Failed to report foreign financial assets,
- Incorrectly reported foreign financial assets.
To file amended returns using SFOP, you must be able to certify non-willful conduct for the errors and omissions.
Delinquent Tax Returns
Streamlined Foreign Offshore Procedures allow you to submit the following returns:
- Original tax returns, together with required information returns, missing for up to 3 years,
- FBARs missing for up to 6 years.
To file delinquent returns using SFOP, you must be able to certify non-willful conduct for your failure to file.
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 SFOP.
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 STREAMLINED Foreign OFFSHORE PROCEDURES
If you’re eligible for SFOP, the program enables you to become tax compliant by:
- Filing amended tax returns and international information returns for the last 3 years.
- Filing delinquent FBARs for the last 6 years
After completing the streamlined offshore foreign procedures, you’re expected to comply with the law for all future years and file returns according to regular US tax filing procedures.
STREAMLINED ADVISORY CAN HELP YOU GET BACK INTO TAX COMPLIANCE USING IRS STREAMLINED FOREIGN OFFSHORE PROCEDURES.