The Streamlined Filing Procedures are a lifeline to many an expat who finds themselves behind on their taxes. Want to find out more about this amazing program? Read on to find out the top five things expats should know.
#1: Who Do The Streamlined Filing Procedures Help?
The Streamlined Filing Procedures are an amnesty program created by the IRS to help delinquent taxpayers get caught up on their taxes. However, if you are a year or less behind on your expat taxes, filing as soon as possible is typically your best option. The Streamlined Filing Procedures were created for those who are significantly behind. However, they only are available to taxpayers who were not aware that they had a filing obligation, or as the IRS labels it, “non-willful.” If you were aware you had a filing obligation and did not file, you are unfortunately ineligible for the Streamlined Filing Procedures.
#2: What Do I Need To File?
Becoming compliant using the Streamlined Filing Procedures is relatively simple, especially compared with the other options available to expats! To get caught up, you’ll file only the last three years of delinquent expat tax returns, as well as six years of Foreign Bank Account Reporting (FBAR) forms.
And, you’ll want to find out if your tax home is in a foreign country, which can help determine your eligibility for the Foreign Earned Income Exclusion!
#3: Are Other IRS Amnesty Programs Available?
Yes, there are! If you were aware of your filing obligations, you could use the Offshore Voluntary Disclosure Program (OVDP). This program will not be penalty-free, however; stiff penalties are associated with the OVDP. The benefit of using this program is that it protects taxpayers from prosecution. If you think you might need to go that route, do so soon, because the IRS announced that the program will end September 28, 2018.
#4: Are the Streamlined Filing Procedures Available Indefinitely?
At this point, the IRS has not identified an end date for the program. But, since the OVDP is closing, it is very likely that the Streamlined Filing Procedures will not be available forever, either.
#5: What Should I Do Next?
Getting started is your best move. The sooner you file, the less chance you have of the IRS noticing and taking action – at which point you would no longer to be able to come forward voluntarily. And if you need to use the OVDP, you definitely need to get started immediately, before the program closes. Either way, if you owe more than $51,000 in taxes, your passport is at risk of being revoked if you already have one or denied if you plan to apply. Due to the passport risk, expats face extreme consequences for overdue taxes, so getting caught up as soon as possible is doubly important!
Questions About Getting Caught up on Your Expat Taxes?
Get started with Greenback today, and you will be surprised how simple we can make your journey to tax compliance.