The Internal Revenue Service announced major changes in its offshore voluntary compliance programs, providing new…
Happy Birthday Streamlined Filing Compliance Procedure!
The Streamlined Filing Compliance Procedure (SFCP) was “born” two years old. Two years ago the IRS publicly announced the SFCP, which has been used by many non-compliant US taxpayers with the disclosure of foreign assets. SFCP has two sub-programs: one for US residents (Streamlined Domestic Offshore Procedures or “SDOP”) and one for non-US residents (Streamlined Foreign Offshore Procedures or “SFOP”). Each program has its own set of specific procedures and eligibility requirements.
The SFCP was designed for taxpayers whose failure to disclose their offshore accounts was “non-willful,” due to a lack of understanding or knowledge of reporting requirements for U.S. persons. Unlike the larger exhaustive Offshore Voluntary Disclosure Program (“OVDP”), the SFCP requires that the taxpayer comprehensively asserts that their non-compliance was not willful. Taxpayers are only required to file tax returns for the previous 3 years and FBAR’s for the previous 6 years.
In our firm’s experience, we have seen great interest and increased participation by taxpayers in the SFCP program. Taxpayers who have failed to comply with their US tax filing and information reporting obligations should be aware of and seek appropriate advice regarding which disclosure program to pursue.