Streamlined Filing Compliance Procedures Explained
Who qualifies, the foreign and domestic versions, what you file, and the non-willful certification
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
The streamlined filing compliance procedures let U.S. taxpayers whose failure to file returns, report foreign income, or file FBARs was non-willful catch up with reduced or no penalties. The foreign offshore version, for people living abroad, has no penalty: three years of returns, six years of FBARs, and a certification.
On this page
The two versions
| Streamlined foreign offshore | Streamlined domestic offshore | |
|---|---|---|
| Who | Lived outside the U.S. (no U.S. abode and at least 330 full days abroad; for non-citizens without a green card, not meeting the substantial presence test) in at least one of the last three years — both spouses on a joint return | U.S. residents who filed the last three years' returns but omitted income from foreign assets (often with missing FBARs or forms) |
| File | Three years of returns (amended or original), six years of FBARs, Form 14653 certification | Three years of amended returns, six years of FBARs, Form 14654 |
| Penalty | None | 5 percent of the highest aggregate year-end value of the unreported foreign financial assets across the six FBAR years and three return years |
| Tax and interest | Paid with the returns | Paid with the returns |
Requirements
A valid taxpayer identification number (a Social Security number for citizens and resident aliens; an ITIN — or a complete ITIN application sent with the submission — for those not eligible for one), non-willful conduct — negligence, inadvertence, mistake, or a good-faith misunderstanding — certified under penalty of perjury with a narrative, and no IRS civil examination of any year (or criminal investigation) already underway. Information returns (Forms 5471, 3520, 8621, 8938) are included with the delinquent or amended returns, and a compliant submission carries no information return or FBAR penalties — none at all in the foreign version, only the 5 percent penalty in the domestic version — though penalties already assessed aren't abated.
When it's not the right path
Willful failures belong in the IRS Criminal Investigation Voluntary Disclosure Practice. People with no unreported income and only missing information returns can use the delinquent international information return submission procedures (penalties may still be assessed; reasonable-cause statements are considered). Missing FBARs alone are filed late through BSA E-Filing with an explanation — the IRS no longer publishes its former delinquent FBAR submission procedures.
Frequently asked questions
What is the streamlined foreign offshore procedure?
A catch-up program for non-willful U.S. taxpayers living abroad: three years of returns, six years of FBARs, a certification, and no penalty.
Do I qualify if I live in Canada?
Usually — if you lived outside the U.S. in at least one of the last three years and your failure was non-willful.
What does non-willful mean?
Negligence, inadvertence, mistake, or a good-faith misunderstanding of the requirements.
Is there a penalty?
None for the foreign version; 5 percent of the highest foreign asset balance for the domestic version.
Official sources
The IRS explains: “The streamlined filing compliance procedures (“streamlined procedures”) describe below are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part.” — Internal Revenue Service, Streamlined filing compliance procedures, https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle streamlined foreign and domestic offshore submissions, non-willful certifications, and delinquent information return filings. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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