Specific Steps for Applying to the IRS Streamlined Foreign Offshore Procedures

If you are a US Person and not compliant for not properly reporting foreign accounts, assets, investments, and income to the IRS, you may have learned about Streamlined Procedures.

If you live outside the US and are eligible to use the Streamlined Foreign Offshore Procedures, then you must follow the below specific steps. If you fail to properly comply with the steps, then your application will be rejected for the streamlined procedures.

• Step 1: An applicant for the streamlined foreign offshore procedures must first file all delinquent or amended tax returns for the most recent three years for which the due date has already passed. At the same time, the taxpayer must file any associated informational returns, including Forms 3520, 5471, and 8938. In addition, the applicant must file any delinquent FBAR forms for the past six years for which the FBAR filing requirement has passed.

• In order to ensure that your application under the Streamlined Foreign Offshore Procedures is accepted, it must be properly labeled as such. The IRS has stated that each page of each amended tax return submitted under these procedures is labeled with “Streamlined Foreign Offshore” written in red ink. This labeling requirement is absolutely critical to identify that your returns are being submitted under streamlined procedures. If you fail to properly label your returns in this manner, you will not be able to participate in the streamlined procedures and your returns will be processed in the usual manner.

• The third step of applying for the streamlined foreign offshore procedures requires taxpayers to sign a “Certification by U.S. Person Residing Outside of the U.S.” certifying the following: (1) that the applicant is eligible for the Streamlined Foreign Offshore Procedures; (2) that all required FBARs have now been filed; and (3) that the failure to file tax returns, report all income, pay all tax, and submit all required information returns, including FBARs, was not the result of willful conduct. Copies of this certification must be attached to each and every tax return and informational return being submitted under the streamlined procedures.

• As the next step in the streamlined procedures, the taxpayer must submit payment of all tax due as reflected on the amended tax returns filed under the process. This payment should include all applicable statutory interest associated with the late payment amounts. When submitting this tax due, include the taxpayer identification number on the check to ensure proper processing.

• A final step in complying with the streamlined domestic offshore procedures requires the taxpayer to file any delinquent FBARs for each of the most recent 6 tax years for which the FBAR due date has passed. In doing so, you must explain that you are filing the delinquent FBARs in an attempt to comply with the streamlined domestic offshore procedures. Most importantly, the FBAR filings must be made electronically under streamlined procedures. In order to indicate that these FBAR filings are made under the streamlined procedures, you must enter “Streamlined Filing Compliance Procedures” in the explanation box on the electronic filing website. 

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