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Am I Eligible for Streamlined Filing Compliance Procedures (IRS)?

Streamlined Filing Compliance Procedures - IRS Streamlined Filing(Golding & Golding)

Streamlined Filing Compliance Procedures – IRS Streamlined Filing (Krantz Attorneys)

Am I Eligible for Streamlined Filing Compliance Procedures (IRS)?

If you are out of IRS Offshore compliance for not properly or timely filing tax returns and/or filing international reporting forms for your foreign assets, accounts, investments and income, you may be in luck. The IRS has developed special streamlined procedures to assist U.S. account holder taxpayers with safely getting into offshore compliance.

Streamlined Filing Compliance Procedures

The Streamlined Filing Compliance Procedures are informally referred to as the Streamlined Program, Streamlined Procedures, or Streamlined Disclosure. The streamlined process is not as complicated as OVDI, OVDP or post-OVDP — but it is still very complicated.

There are two types of IRS Streamlined Filing Procedures:

The programs are similar, but each program has its own set of specific filing and submission requirements. 

A. Domestic Streamlined Procedures aka Streamlined Domestic Offshore Procedures

Streamlined Filing Compliance Procedures for US persons residing in the United States (or do not meet the technical “Foreign Resident Test”) is referred to as the Streamlined Domestic Offshore Procedures for U.S. Residents.

Typically, there are three (3) main eligibility requirements that a U.S. Taxpayer must meet in order to qualify and become eligible for the Streamlined Domestic Offshore Procedures.

The requirements include:

  • Non-Willful Certification Statement using IRS Form 14654;
  • Not Qualify as a Foreign Resident; and
  • Filed Timely Tax Returns

B. Foreign Streamlined Procedures aka Streamlined Foreign Offshore Procedures

Streamlined Filing Compliance Procedures for US persons residing outside the United States is referred to as the Streamlined Foreign Offshore Procedures.

Streamlined Foreign Offshore Procedures (SFOP) are a highly cost-effective method of quickly getting you into IRS (Internal Revenue Service) or DOT (Department of Treasury) compliance before it is too late! It allows individuals to come into IRS Tax and Reporting Compliance, without having to pay any penalties.

The requirements include:

  • Qualify as Non-Willful; 
  • Meet the 330-Day Foreign Residence Test/Non U.S. Person; and
  • You do not have to have filed all prior year tax returns.
International Tax Lawyers - IRS Streamlined Filing Compliance Procedures

International Tax Lawyers – IRS Streamlined Filing Compliance Procedures

IRS Streamlined Filing Compliance Procedures  – Krantz Attorneys, A PLC 

We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

Streamlined Filing Compliance Procedures IRS – Am I Eligible?

While the Streamlined Domestic and Streamlined Foreign each have their own specific requirements — both programs have one element in common.

The applicant must be non-willful.

IRS Streamlined Procedures “Non-Willful” Requirement

Generally, if a person was unaware that there was a foreign account, foreign income, or foreign asset reporting requirement, the applicant may qualify as non-willful.

Unfortunately, there is no bright-line test, and a more complex “totality of the circumstances” analysis is required.

Non-Willful vs. Lower Standards of Willfulness 

Willfulness does not mean intent.

There can be “lower” forms of willfulness, which do not require willful or intent — these additional willful standard are referred to as:

Stramlined Filing Compliance Procedure Forms - Krantz Attorneys

Stramlined Filing Compliance Procedure Forms – Krantz Attorneys

What Forms Must be Reported under Both Programs?

The following is a list of common forms which many people were never aware they had to report, but which the failure to report may lead to IRS fines and penalties:

FBAR (FinCEN 114)

The FBAR is used to report “Foreign Financial Accounts.” This includes investments funds, and certain foreign life insurance policies.

The threshold requirements are relatively simple. On any day of the year, if you aggregated (totaled) the maximum balances of all of your foreign accounts, does the total amount exceed $10,000 (USD)?

If it does, then you most likely have to file the form. The most important thing to remember is you do not need to have more than $10,000 in each account; rather, it is an annual aggregate total of the maximum balances of all the accounts.

Form 8938

This form is used to report “Specified Foreign Financial Assets.”

There are four main thresholds for individuals is as follows:.

  • Single or Filing Separate (in the U.S.): $50,000/$75,000
  • Married with a Joint Returns (In the U.S): $100,000/$150,000
  • Single or Filing Separate (Outside the U.S.): $200,000/$300,000
  • Married with a Joint Returns (Outside the U.S.): $400,000/$600,000

Form 3520

Form 3520 is filed when a person receives a Gift, Inheritance or Trust Distribution from a foreign person, business or trust. There are three (3) main different thresholds:

  • Gift from a Foreign Person: More than $100,000.
  • Gift from a Foreign Business: More than $16,076.
  • Foreign Trust: Various threshold requirements involving foreign Trusts

Form 5471

Form 5471 is filed in any year that you have ownership interest in a foreign corporation, and meet one of the threshold requirements for filling (Categories 1-5). These are general thresholds:

  • Category 1: U.S. shareholders of specified foreign corporations (SFCs) subject to the provisions of section 965.
  • Category 2: Officer or Director of a foreign corporation, with a U.S. Shareholder of at least 10% ownership.
  • Category 3: A person acquires stock (or additional stock) that bumps them up to 10% Shareholder.
  • Category 4: Control of a foreign corporation for at least 30 days during the accounting period.
  • Category 5: 10% ownership of a Controlled Foreign Corporation (CFC).

Form 8621

Form 8621 requires a complex analysis, beyond the scope of this article. It is required by any person with a PFIC (Passive Foreign Investment Company).

The analysis gets infinitely more complicated if a person has excess distributions. The failure to file the return may result in the statute of limitations remaining open indefinitely.

*There are some exceptions, exclusions, and limitations to filing.

Golding & Golding (Board Ceritfied Specialist in Tax Law)

Krantz Attorneys (Board Certified Specialist in Tax Law)

Are the Streamlined Filing Compliance Procedures Ending?

There is no knowing if the Streamlined Domestic Offshore Procedures Ending date is coming now, or later. BUT, the IRS reserves the right to end the program at any time and has indicated that the program “won’t last forever.”

Interested in the Streamlined Filing Compliance Procedures

No matter where in the world you reside, our international tax team can get you IRS offshore compliant.

Krantz Attorneys specializes in Streamlined Filing Compliance Procedures. Contact our firm today for assistance with getting compliant.

International Tax Lawyers - Krantz Attorneys, A PLC

International Tax Lawyers - Krantz Attorneys, A PLC

Krantz Attorneys: Our international tax lawyers practice exclusively in the area of IRS Offshore & Voluntary Disclosure. We represent clients in 70+ different countries. Managing Partner Ezra Krantz is a Board-Certified Tax Law Specialist Attorney (a designation earned by < 1% of attorneys nationwide.). He leads a full-service offshore disclosure & tax law firm. Ezra and his team have represented thousands of clients nationwide & worldwide in all aspects of IRS offshore & voluntary disclosure and compliance during his 20-year career as an Attorney.

Ezra holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Krantz's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.
International Tax Lawyers - Krantz Attorneys, A PLC

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