If you are a U.S. resident taxpayer who filed income tax returns but failed to report foreign bank accounts, foreign investments, or foreign income, you may be eligible for the IRS Streamlined Domestic Offshore Procedures (SDOP). This program is one of two options available under the IRS Streamlined Filing Compliance Procedures and is designed specifically for taxpayers whose failure to disclose was non-willful — meaning it resulted from negligence, inadvertence, or a good-faith misunderstanding of the reporting requirements rather than a deliberate attempt to evade taxes. Through SDOP, eligible taxpayers can come into full compliance with the IRS while facing a significantly reduced penalty — a single miscellaneous offshore penalty equal to just 5% of the highest aggregate balance of undisclosed foreign financial assets — rather than the far harsher penalties that can apply under a standard IRS examination.
Navigating the SDOP process requires careful legal guidance. Applicants must certify their non-willful conduct using Form 14654 (Certification by U.S. Person Residing in the United States), file amended returns for the most recent three tax years, and submit delinquent FBARs (FinCEN Form 114) for the most recent six years. Each certification must be thorough and precise, as an incomplete or poorly supported submission can result in rejection from the program and potential referral to a full IRS examination or even criminal investigation. A qualified tax attorney can help you assess your eligibility, prepare the necessary documentation, and craft a strong non-willful certification narrative that accurately reflects your circumstances.
Patel Law Offices is one of the most experienced firms in the country when it comes to IRS offshore and voluntary disclosure matters. Led by Mr. Patel, a Board Certified Tax Law Attorney and graduate of Georgetown and NYU School of Law, our legal team has advised and prepared hundreds of Streamlined cases with the IRS. We represent clients nationwide and globally, and have counseled over 1,000 clients in voluntary disclosure matters. If you have undisclosed foreign accounts or assets and need help coming into compliance, contact Patel Law Offices to schedule a strategy session and learn how SDOP may help resolve your situation.