Services I Provide:

U.S. tax preparation and tax planning services for:

• U.S. Citizens and Permanent Residents living overseas
  
  
• U.S. Citizens and Permanent Residents living in the U.S.
  
  
• Foreign Nationals living in the U.S.

Pre-departure tax consultations for Americans moving overseas

Preparation of prior year U.S. individual returns

Preparation of amended U.S. individual returns

Review of individual tax returns prepared elsewhere

 

Streamlined Program Expanded to Include U.S. Residents

On 6/18/14, the Internal Revenue Service (IRS) announced changes to its existing Streamlined program and also expanded the program to include taxpayers residing in the U.S. 

Under the terms of the initial Streamlined program, which was effective 9/1/12, a U.S. taxpayer living abroad (foreign resident) was able to become tax compliant provided they filed delinquent federal tax returns with the appropriate related information returns (e.g. Form 3520 or 5471) for three tax years along with delinquent FBAR forms for the past six years. By meeting these criteria, the IRS would not assess any penalties against the taxpayer. A participating taxpayer needed to have maintained foreign residence for at least three consecutive tax years and been delinquent on their U.S. income tax filings for each of those years. The IRS also required that the taxpayer be of low compliance risk, which included having $1,500 or less in tax due for each of the three years and including a completed “risk” questionnaire with the submission.

Effective 6/18/14, the participating foreign resident no longer needs to be considered of low compliance risk and the $1,500 and risk questionnaire requirements are no longer required. The taxpayer, however, needs to comply with all other requirements of the previous Streamlined program and also include a signed certification stating that:1) they failed to report income from one or more foreign financial assets during the three year period, 2) they have met all the requirements to participate in the new Streamlined program, 3) all required FBAR forms have now been filed, and 4) their prior inability to timely or accurately report all income, pay all tax and file all information returns, including FBARs, was not willful in nature.

A foreign resident taxpayer is now also able to file amended tax returns for the three year period, as opposed to just initially filed tax returns, under the Streamlined program.

The IRS has also expanded the Streamlined program to allow a U.S. taxpayer living in the U.S. (domestic resident) to become tax compliant. Most of the same requirements for a foreign resident also apply for a domestic resident wishing to participate in the Streamlined program. There are, however, three main differences between the two programs. The three year foreign residence requirement does not apply to a domestic resident. In addition, only amended returns are accepted for a domestic resident. Lastly, a miscellaneous offshore penalty of 5% applies to a domestic resident. The 5% penalty is calculated on the highest aggregate value of the taxpayer’s unreported foreign financial assets during the three year period. The taxpayer’s signed certification must also state that the miscellaneous offshore penalty is accurate.

If you are interested in participating in either of the Streamlined programs discussed above, I would be happy to assist you. Please e-mail me at kevin [at] kevinsnydercpa [dot] com or call me at (510) 407-7058 to determine if you qualify or to get started today.