IRS Streamlined Foreign Offshore Procedures

Resolve Your Failure to Report Your Foreign Accounts and Foreign Assets to the IRS

Less Expense and Less Stress: IRS Streamlined Filing Compliance Procedures 

If you are a non-resident US person whose foreign account or asset noncompliance (including the failure to file FBARs, IRS Form 926, IRS Form 3520, IRS Form 3520-A, IRS Form 5471, IRS Form 8621, IRS Form 8865, or IRS Form 8938 and/or failure to pay income tax on earnings from unreported foreign assets) was non-willful, the Streamlined Foreign Offshore Procedures is a dramatically less expensive and less stressful way to resolve your US tax problems. 

To determine if you qualify for this program, confirm each of the following:

• You are a US person, defined as a US citizen, US permanent resident or were ‘substantially present’ in the US, as most US work visa holders are, and,

• In one or more of the last three tax years (for which the due date has passed), you were physically outside the borders of the US at least 330 full days, and,

• You failed to file any of the following: FinCEN Form 114 (Report of Foreign Bank and Financial Accounts, also known as the FBAR), IRS Form 926, IRS Form 3520, IRS Form 3520-A, IRS Form 5471, IRS Form 8621, IRS Form 8865, or IRS Form 8938 and/or failed to pay income tax on earnings from foreign assets, and,

• Your noncompliance of all the types recited above was always and completely non-willful in nature.

The requirements for disclosure via this program, if you qualify, are:

1. Amend the last three years of US tax returns (meaning, the last three for which the due date has passed) to report earnings from foreign assets, paying the necessary tax and interest, and,
2. Amend or delinquently file the last six years of FBARs (for which the due date has passed), and,
3. File a Form 14653 which certifies in a detailed and substantial narrative statement that all elements of your prior noncompliance were non-willful (negligent) in nature.

Only non-willful taxpayers qualify for the IRS Streamlined Program, and only an attorney can properly analyze whether you are non-willful.  A Streamlined filing compliance attorney will know what information is relevant to this determination, what the evidence means, and will analyze and write a convincing examiner-ready memorandum establishing your non-willfulness.

No matter where you reside in the world, call Streamlined Foreign Offshore Program tax attorney Andrew L. Jones now at (415) 745-1924 for a free, thorough and completely confidential consultation to determine if you are eligible to resolve your noncompliance through the Streamlined Foreign Offshore Procedures!  We are currently accepting clients around the world, which means that no matter where you are currently located, you do not need to rely on local, inexperienced tax counsel (or high-volume, low-expertise ‘expat tax services’) to address your FBAR and US tax violations.  Experience matters – working with a US tax attorney with a practice exclusively dedicated to IRS voluntary disclosure means no surprises and no learning on the job.

The IRS Streamlined Option – Formally Known as the Streamlined Foreign Offshore Procedures – Allows Non-Resident US Taxpayers to Avoid All Penalties for Failing to (a) Timely or Completely File FBARs or Forms 3520, 3520-A, 5471, 8865 or 8938 and/or (b) Report Earnings From Foreign Assets

On June 18, 2014, the IRS created a new option for non-resident US taxpayers who failed to file FBARs, Forms 3520, 3520-A, 5471, 8865 or 8938 reporting various foreign assets.  This option, called Streamlined Foreign Offshore Procedures (occasionally referred to by the acronym “SFOP” or “SFO”) allows certain US persons who (a) spent less than 35 days inside the physical borders of the US in at least one of the last three past-deadline tax years and (b) failed to report certain foreign accounts or assets to the IRS through the above-mentioned Forms, to make a voluntary disclosure without penalty.

In a nutshell, if you: 

• Failed to file a FinCEN Form 114 (Report of Foreign Bank and Financial Accounts, also known as the FBAR) and/or,
• Failed to file the Form 926 (‘Return by a U.S. Transferor of Property to a Foreign Corporation’), and/or,
• Failed to file a Form 3520 (‘Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts and Inheritances’) and/or,
• Failed to file a Form 3520-A (‘Annual Information Return of Foreign Trust With a U.S. Owner’) and/or,
• Failed to file a Form 5471 (‘Information Return of U.S. Persons With Respect To Certain Foreign Corporations’) and/or,
• Failed to file a Form 8621 (‘Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund’), and/or,
• Failed to file a Form 8865 (‘Return of U.S. Persons With Respect to Certain Foreign Partnerships’) and/or,
• Failed to file a Form 8938 (‘Statement of Specified Foreign Financial Assets’) and/or,
• Failed to report on your income tax return (Form 1040) the income from one or more foreign financial accounts or assets…

and your failure was non-willful, then the IRS Streamlined Program – formally known as the Streamlined Foreign Offshore Procedures – allows you to resolve your non-compliance and avoid significant civil penalties, all for zero penalty – even though other US taxpayers otherwise identical facts but with more than the 35-day limit in all three of the last years, must disclose through the Streamlined Domestic Offshore Procedures and pay a 5%-of-undeclared-assets penalty. 

IRS Streamlined Program Requirements 

The IRS Streamlined Offshore Reporting Program requires a taxpayer to make a voluntary disclosure of their non-compliance by: 

• Filing three years of amended tax returns (the most recent three for which the due date has passed) to report undeclared income from their foreign assets
• File six years of delinquent or amended FBARs (the most recent six for which the due date has passed)
• Pay the tax that is due on those amended returns, plus statutory interest

• Submit extensive supporting documentation specific to the Streamlined program via the Form 14653, which contains your Certification of Non-Willfulness.  

This Certification, which takes the form of a narrative statement, must accomplish the difficult task of proving through affirmative evidence that you did not know and were not willfully blind to your obligations (in other words, that you were not ‘willful’).  The fact that you must essentially prove a negative makes qualifying for this disclosure option particularly challenging.

Disclosing Via the Streamlined Foreign Offshore Procedures Is Hugely Less Expensive Than Disclosing Via the IRS Voluntary Disclosure Practice

Compare the above Streamlined program terms to the following terms of the IRS’ Voluntary Disclosure Practice (which replaced the now-closed IRS OVDP):

• Delinquently file or amend the last six years of tax returns (for which the due date has passed), and,
• Pay a penalty equal to 50% of the highest ‘FBAR value’ reached in one of those last six tax years (‘FBAR value’ being the sum of the intra-year maximum values of each foreign account as should have been reported on the FBAR, but was not, and measured on the ‘violation date’), and, 
• Pay all tax due as calculated on those six delinquent or amended tax returns, and,
• Pay all statutory interest due on the tax-due balances calculated on those six delinquent or amended tax returns, and,
• Pay a civil fraud penalty equal to 75% of the unpaid tax for the tax year (among the six amended or filed as instructed above) with the highest tax due, and,
• Potentially pay that same 75% civil fraud penalty for additional years among the last six “based on facts and circumstances of the case,” and,
• Potentially pay international information return penalties of $10,000 per year for each Form that was not filed at all or not complete or correct.

Note that there is significant complexity in applying all the VDP rules recited above, and in particular, in defining the 50% willfulness ‘penalty base.’  For this reason, consultation with a FBAR tax attorney is in our view absolutely necessary.

Additionally, the IRS Voluntary Disclosure Practice is filled with provisions that give the IRS ‘wiggle room’ to impose more, and harsher, penalties.  Despite willingly disclosing one’s noncompliance to the IRS via a program which extracts exorbitant financial penalties, you (the disclosing US taxpayer) receives in return little to no guaranteed protection – only vague commitments of a fair outcome.  Accordingly, international tax attorney Andrew L. Jones views the IRS Voluntary Disclosure Practice as only appropriate and advisable for a small subset of the total noncompliant taxpayer population: either

• Individuals who cannot accept any risk of IRS examination or rejection from the Streamlined Foreign Offshore Procedures and are willing to pay the enormous penalties of the Voluntary Disclosure Practice to minimize, to the greatest degree possible, the risk of examination or rejection from the Streamlined program
• Individuals with extreme negative factual histories (clearly reflecting intentional noncompliance with a known obligation) where evidence of that intentional noncompliance and that knowledge of the obligation is readily obtainable by the US authorities.  

Eligibility for the Streamlined Foreign Offshore Procedures Hinges on Taxpayer Willfulness 

Streamlined is only available to those taxpayers whose noncompliance was ‘non-willful,’ and requires participants to thoroughly document the non-willful nature of their noncompliance through a Certification of Non-Willfulness. 

Willfulness in the FBAR context is an extremely complex legal standard but can be summarized as either an intentional violation of a known FBAR filing obligation duty or a reckless violation of the FBAR obligation.  As noted above, to make an effective argument of non-willfulness to the IRS requires you (through the taxpayer’s IRS voluntary disclosure attorney) to prove a negative by proving that you did not know any of your foreign asset reporting or tax obligations and were not ‘willfully blind’ or reckless to those obligations.  This is a challenging task best handled by an attorney with a strong record of experience and success with this program.

Call IRS Voluntary Disclosure tax attorney Andrew L. Jones now at (415) 745-1924 for a free, fully confidential consultation to determine if you are eligible to solve your foreign account problems through the Streamlined Procedures!

Only a Qualified Streamlined Foreign Offshore Procedures Tax Attorney Can Properly Advise You Regarding Willfulness, And Write the Necessary Legal Argument (Certification of Non-Willfulness)

Experienced Streamlined Foreign Offshore Procedures tax attorney Andrew L. Jones can guide you through all phases of disclosure via the Streamlined Procedures, including:

• Guiding and carrying out the collection of evidence relevant to your willfulness or non-willfulness.  Since willfulness is almost always determined by circumstantial evidence, a voluntary disclosure tax attorney will know the statutory law, the case law, and the current thinking at the IRS regarding what evidence indicates – or does not indicate – willfulness.
• Determining whether your errors and omissions were willful.  Willfulness is a legal standard set forth in the statutory law, and articulated in case law (court decisions).  Non-attorneys (CPAs, enrolled agents or other ‘consultants’) are not qualified to make this determination.
• Writing a persuasive Certification of Non-Willfulness which anticipates and neutralizes all the IRS’ lines of attack relating to possible willfulness and your ‘bad facts.’  The goal is to show the reviewing IRS Revenue Agent that the Service cannot establish (to the necessary standard of proof) that your failures to file an FBAR (FinCEN Form 114) and/or any international information return (e.g. Forms 926, 3520, 3520-A, 5471, 8865 or 8938) and/or pay US tax were willful.

• Knowing what foreign assets are subject to the penalty, at what valuation, and in what years during the six-year look-back period.  Huge sums of money are at stake in these questions and the determinations require an experienced guide.
• Producing a complete and accurate amendment (or delinquent filing) of (a) up to the three prior years’ tax returns, including Forms 926, 3520, 3520-A, 5471, 8621, 8865 and 8938 and (b) up to six years of FBARs, and all supplementary Streamlined Disclosure documentation.

This task, while often overlooked during discussions of foreign asset penalties and analysis of reasonable cause versus negligence, is just as critical as the reasonable cause statement.  Indeed, a disclosure consisting of amended returns and/or delinquent foreign asset filings is arguably incomplete and thus invalid if the IRS Forms are not correctly filled out.  Such tax and informational filing preparation requires high skill, particularly where the filer owns less-common types of foreign assets including foreign retirement plans, foreign life insurance policies, foreign annuities, closely-held foreign business interests, etc.

• Preserving attorney-client privilege.  Virtually any information provided to a non-attorney can and will – if necessary – be obtained by the IRS.  Hiring and working directly with a tax attorney preserves your rights.

Streamlined Foreign Offshore Procedures tax attorney Andrew L. Jones is highly qualified to provide you swift, effective and fully-confidential representation for your voluntary disclosure:

• He has guided hundreds of clients through the collective disclosure of over $300 million in previously-unreported foreign assets (statistics as of September 2024).  Andrew has advised clients with undisclosed or hidden foreign bank accounts and financial assets ranging in value from $150,000 to eight figures.
• Not a single one of Andrew’s clients’ Streamlined Domestic Offshore Procedures or Streamlined Foreign Offshore Procedures filings have ever been challenged or rejected by the IRS.
• Andrew earned his J.D. and LL.M. in Taxation, with distinction, from Loyola Law School, Los Angeles, and has since 2009 limited his work as a tax attorney solely to international taxation and foreign account reporting controversies, compliance and planning.
• A substantial number of Andrew’s clients have successfully disclosed foreign asset noncompliance through the Delinquent International Information Return Submission Procedures and/or the Delinquent FBAR Submission Procedures.  Where fact-appropriate and acceptable in risk profile, Andrew has aggressively deployed reasonable cause arguments, winning zero-penalty results in virtually every instance.  This is a record of vigorous and effective advocacy which stands in sharp contrast to the risk-avoidant mindset of numerous other international asset disclosure attorneys whose solution for every instance of noncompliance – regardless of the facts – is to disclose via the Streamlined Procedures, leaving their innocent clients to pay an unnecessary penalty.

• Andrew will be your sole point of contact in your voluntary disclosure, from your first call and email to your last.  He responds personally to all your calls and messages, personally supervises the accounting phase (amendment of returns and/or FBARs) of your engagement and personally writes every word of your narrative statement (the Certification of Non-Willfulness for asset disclosures via the Streamlined Foreign Offshore Procedures, and the reasonable cause statement for asset disclosures via the Delinquent International Information Return Submission Procedures). 

Ask our competition whether they do the same: we think you’ll quickly learn that no other law firm offers this personal service commitment.

• Andrew has assisted taxpayers with undisclosed foreign accounts in countries around the globe, including (as examples) the United Kingdom, Switzerland, Germany, France, China, Malaysia, Philippines, Japan and dozens and dozens of other countries.  His clients have included those with large private wealth management accounts in Switzerland’s most notorious banks – banks that were or are under active US criminal investigation and banks that employed account managers indicted criminally by the US.  He has also worked with clients who owed tens or hundreds of thousands of dollars in unpaid US tax.
• Andrew’s clients have had a wide variety of additional factors complicating their offshore voluntary disclosures, including:
  • The spouse who opened the foreign account is now deceased.
  • Clients who received their accounts via a foreign inheritance (an inheritance event which may also be reportable on the Form 3520 if sufficient in value)
  • Clients who survived the Holocaust or who have other personal or familial-origin reasons, not related to avoidance of US tax, for owning accounts in traditional tax, privacy or secrecy havens like Switzerland.
  • Clients who did not know of their obligation to report their accounts on the FBAR, or had a good-faith misunderstanding of the FBAR filing requirement and/or US taxation of foreign bank account earnings.
  • Elderly clients and their adult children/caretakers.
  • Clients with signature authority over (but no beneficial interest) in hidden foreign bank accounts or with interest in foreign corporations, trusts or partnerships that controlled undisclosed foreign bank accounts.
  • Clients who are US permanent residents (resident aliens) and are anticipating or are already in the process of acquiring US citizenship at time of discovering the issue of undisclosed foreign accounts.
  • Foreign account disclosure clients who are divorced, separated, and estranged from spouses.
  • Clients who at the same time as pressure or investigation by the US Department of Justice of their original custodial bank, moved their account to another bank in the same or another jurisdiction (and may have even done this multiple times)
  • Clients with unreported or misreported foreign retirement arrangements such as pensions, annuities and/or life insurance policies
  • Clients who were mis-advised by prior preparers and can only establish their reasons for substantial tax and/or informational noncompliance through documentation (and often, an affidavit from) that former preparer

We are available by phone at (415) 745-1924. We answer your calls from 8 am-9 pm Pacific Time, 7 days a week.  After hours, please leave a voice mail providing only your name, a preferred call-back number (and time to call back) or send us an email (address provided at our contact page) and we will reply the next morning. If you’re concerned about working at a distance with a tax attorney, read more here. 

Call Streamlined Foreign Offshore Program tax attorney Andrew L. Jones now at (415) 745-1924 for a free, fully confidential consultation to determine if you are eligible for this faster, simpler and less expensive option to solve your foreign account problems!