The IRS announced changes to its Streamlined Procedures (Volutary Disclosure) program, which allows US expats to catchup on delinquent tax filings. The IRS recognizes that many US expats are not aware of their filing obligations, and have not submitted their tax returns or FBARs (Foreign Bank Account Report) while living abroad. The Streamlined Procedures program is an attractive opportunity for US expats to get caught up with their tax returns and avoid penalties.

IRS Streamlined Procedures

The program requirements include: (1) the past 3 years of tax returns, regardless of how many years of non-filings; (2) up to 6 years of FBARs (Foreign Bank Account Report), as applicable; and (3) certification form.

The IRS has eliminated certain criteria, which had prevented thousands of expats from qualifying for the program. Previously, an individual was disqualified from the program if he or she had more than $1,500 in tax liability per year. Also disqualified were expats with a foreign bank account or business interest outside of their country of residence.

At the same time, the IRS has made more stringent the Offshore Voluntary Disclosure Program, which also allows US expats to catchup on delinquent tax filings (but with penalties). Generally speaking, this program is targeted at individuals who have substantial assets abroad, and have hidden their assets in a willful manner.

For general information on US expat taxation, please read: US Taxes for Americans Living Abroad – Ultimate Guide.