Simplifying Your Path Back Into IRS Compliance
Realizing you have unintentionally failed to report foreign income or disclose foreign financial accounts can be a stressful discovery. We guide you through every step of the IRS Streamlined Filing Compliance Procedures, helping you prepare the necessary amended tax returns, delinquent FBARs, and the crucial non-willful certification statement.

IRS Streamlined Filing Procedures
For US expats and green card holders abroad, US tax obligations are a fact of life. Citizenship-based taxation means you must file US tax returns and report foreign financial accounts, regardless of where you live. Many US expats are unaware of these rules and fall into non-compliance unintentionally. If you've discovered past filing oversights, the IRS Streamlined Procedures offer a crucial lifeline an amnesty-like program to get back on track without facing severe penalties.
What Are the IRS Streamlined Procedures?
The IRS Streamlined Procedures offer a simplified pathway for US expats to correct past failures in reporting foreign income and financial accounts. The program is specifically for individuals whose conduct was non-willful—a term that covers negligence, inadvertence, mistakes, or genuine confusion about US tax law, as opposed to deliberate tax evasion. Understanding IRS Streamlined Procedures is essential for achieving FBAR compliance and non-willful tax compliance.
Unlike the now-closed Offshore Voluntary Disclosure Program (OVDP), which imposed much higher penalties, the IRS Streamlined Procedures provide significantly reduced or completely waived penalties. For eligible taxpayers, it eliminates failure-to-file, failure-to-pay, accuracy-related, and information return penalties. Critically, the formidable penalties for failing to file Foreign Bank Account Reports (FBARs) are also waived for most participants under IRS Streamlined Procedures.
Streamlined Foreign Offshore Procedures vs. Streamlined Domestic Offshore Procedures
The IRS offers two distinct streamlined programs based on your residency status. The Streamlined Foreign Offshore Procedures (SFOP) are for US expats residing abroad, while the Streamlined Domestic Offshore Procedures (SDOP) are for those residing in the United States. Understanding the difference between Streamlined Foreign Offshore Procedures and Streamlined Domestic Offshore Procedures is key to selecting the right path for FBAR compliance and non-willful tax compliance.
Aspect | Streamlined Foreign Offshore Procedures (SFOP) | Streamlined Domestic Offshore Procedures (SDOP) |
---|---|---|
Eligible Taxpayer | US person residing outside the US (must meet non-residency test) | US person residing inside the US |
Offshore Penalty | 0% (No penalty) | 5% of the highest aggregate value of unreported foreign financial assets |
Tax Return Filing | Can file original delinquent returns (if never filed) or amended returns | Must file amended returns (Form 1040-X) only; prior returns must be filed |
Key Requirement | Certify non-residency status and non-willful conduct | Certify non-willful conduct |
Certification Form | Form 14653, Certification by US Person Residing Outside of the US | Form 14654, Certification by US Person Residing in the US |
Primary Benefit | Penalty-free path to correct tax and FBAR filings | Significant reduction in penalties for correcting undisclosed foreign assets |
Submission Checklist for IRS Streamlined Procedures
Accuracy is paramount when using IRS Streamlined Procedures. All streamlined filings must be submitted on paper, as electronic filing is not an option for these procedures.
For Streamlined Foreign Offshore Procedures (SFOP) Submissions:
- Three Years of Tax Returns: File delinquent or amended Form 1040s for the last three years whose due date has passed. For a submission in mid-2025, this covers tax years 2022, 2023, and 2024.
- Six Years of FBARs: File delinquent electronically via the BSA E-Filing System. Select "Other" for the late reason and write "Streamlined Filing Compliance Procedures."
- Non-Willful Certification: Complete and sign Form 14653. Attach a copy to each tax return.
- Marking and Mailing: Write "Streamlined Foreign Offshore" in red ink on top of each return and mail the package to the designated IRS address in Austin, TX.
For Streamlined Domestic Offshore Procedures (SDOP) Submissions:
- Three Years of Amended Tax Returns: File Form 1040-X for the last three years to correct past filings.
- Six Years of FBARs: File delinquent FinCEN Forms 114 electronically, same as for SFOP.
- Certification and Penalty Calculation: Complete and sign Form 14654, which includes the 5% offshore penalty calculation.
- Payment: Include a check for all back taxes, interest, and the 5% penalty.
- Marking and Mailing: Write "Streamlined Domestic Offshore" in red ink on top of each return and mail the package to the designated IRS address in Charlotte, NC.
Crafting a Compelling Non-Willful Narrative for IRS Streamlined Procedures
Your statement on Form 14653 or 14654 is the most critical part of your IRS Streamlined Procedures submission. A vague or unconvincing narrative is the primary reason for rejection. Your story must be honest, specific, and credible to demonstrate non-willful tax compliance.
- Be Factual and Specific: Detail your personal and financial background. Explain why you were unaware of your obligations, citing your ties to the US (or lack thereof), reliance on incorrect advice, or the complexities of tax law.
- Explain Your Actions: Describe the "trigger event" that made you aware of your filing requirements and the steps you took to become compliant with FBAR compliance.
- Maintain a Good-Faith Tone: Focus on your honest mistakes and misunderstandings. The narrative should clearly demonstrate that your actions were negligent, not willful, aligning with IRS Streamlined Procedures guidelines.
Risks, Penalties, and Alternatives to IRS Streamlined Procedures
While the IRS Streamlined Procedures are an excellent program for non-willful tax compliance, it is not without risk. Your submission can be selected for audit. If the IRS determines your conduct was willful, your case can be moved to a full examination, where all applicable penalties could be applied. If you are ineligible for the IRS Streamlined Procedures, alternatives exist, including the Delinquent FBAR/Information Return Submission Procedures or the IRS Voluntary Disclosure Practice for willful cases.
Take Action: Achieve Tax Compliance with IRS Streamlined Procedures Today
The IRS Streamlined Procedures provide a powerful opportunity for US expats to resolve past tax issues efficiently, including Streamlined Foreign Offshore Procedures and Streamlined Domestic Offshore Procedures. Navigating the IRS Streamlined Procedures requires deep expertise. At American Expa CPA, our specialists manage the entire process, ensuring a complete and compelling submission. Avoid the risks of a quiet disclosure or a rejected application. Schedule your free US expat tax consultation today and reclaim your peace of mind.
Disclaimer: The information in this page is provided for general reference only and should not be considered professional tax advice. Before making any decisions or taking action based on this information, you should seek appropriate professional guidance. While efforts have been made to ensure accuracy and completeness, no guarantee is provided, and we accept no responsibility or liability for any outcomes resulting from reliance on the information provided on this page.