Form 14653: Why It’s Important to Your Streamlined Filing
The Streamlined Filing Procedures are a great method to get caught up on delinquent taxes if you meet the requirements of the IRS amnesty program. When filing this way, there’s no set timeline for when your late tax returns and FBARs will be reviewed by the IRS – but the important thing is that you’ve submitted everything to get caught up. Here’s what you should know before you submit Form 14653.
- Form 14653 is an IRS tax form expats must file when using the Streamlined Filing Compliance Procedures program.
- Form 14653 is intended to verify that your tax delinquency was not willful, which is required to utilize the Streamlined program for getting caught up on taxes without penalties.
What is IRS Form 14653?
Form 14653 is officially known as the Certification by US Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures. Completing and submitting it is a requirement when filing using the Streamlined Filing program. The form is meant to certify that your tax delinquency was a non-willful act, which is required to utilize the Streamlined program for getting caught up on taxes without penalties.
How Do I Complete the “Narrative Statement of Facts” Portion of Form 14653?
The IRS requires taxpayers using the program to submit a ‘narrative of specific facts,’ which led to their failure to report all income, pay all taxes, and submit all required information-including FBARs. This form requires you to list the following:
- Specific reasons for past failure, whether they are favorable or not to your situation (including personal and financial background, etc.)
- Explanation of the source of funds in your foreign financial accounts (i.e., if you inherited it, opened it while living in a foreign country, opened for business reasons, etc.)
- Explanation of your contacts with the account (withdrawals, deposits, investment/management decisions, etc.)
- Complete story about the foreign financial account
- Contact information about the tax professional with whom you worked, if applicable.
- Self-certification that you’ve spent more than 330 days outside the US in at least one of the last three years if you are a US citizen or a Green Card holder.
- A list of all the days you have spent in the US during the last three years if you are not a US citizen, not a Green Card Holder, and do not currently live in the US. This is used to determine if you pass the Substantial Presence Test and are therefore treated as if you were a US citizen for tax purposes.
- If married taxpayers submitting the form jointly have different reasons for delinquency, they must list their individual reasons separately in the statement of facts.
If married taxpayers submitting the form jointly have different reasons for delinquency, they must list their individual reasons separately in the statement of facts
The purpose of this was likely to allow the IRS to scrutinize further and ensure that those using Streamlined Filing were the proper candidates for this amnesty program. While the IRS does want you to tell the complete story and list all relevant facts, they aren’t interested in reading a short novel.
Tell them how you learned about your tax non-compliance and how quickly you acted. They want facts that will help your case and any that might hurt it. Usually, a thorough page of facts is good; more than ten pages is overboard. But know that if you admit willfulness in your statement of facts, your Streamlined Program application will likely be denied.
Are the Streamlined Filing Forms and Procedures Right for Me?
If you haven’t yet filed using the Streamlined Filing Procedures but need to get caught up on delinquent taxes, this might be a great option. The Streamlined program was created as a way to help US citizens get caught up without facing penalties, as long as their failure to file was non-willful. In order to file using this program, you must:
- File three years of delinquent tax returns for which due dates have passed
- File six years of delinquent Foreign Bank Account Reports (FBARs)or which due dates have passed including extensions
FBARs are required of all US citizens with a foreign bank account(s) that held over $10,000 at any point during the filing year. If you file using the Streamlined filing forms, you will need to file the past six years of FBARs or explain why an FBAR was not required for any year(s) in the six-year period..
The IRS terminated the OVDP (Offshore Voluntary Disclosure Program) in 2018, which was another amnesty program that helped willfully noncompliant taxpayers become compliant without facing prosecution. All amnesty programs are offered at the discretion of the IRS and can be terminated at any point. Though the IRS typically gives notice before the amnesty program is terminated, your best option is to use these programs before they are no longer offered.
Have Questions About Form 14653 Instructions? We are here to help!
Our team of dedicated CPAs and IRS Enrolled Agents has particular expertise in helping US expats get caught up using the Streamlined program. Get started with us today to become compliant with your US tax obligation and learn more about IRS Form 14653!
If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.