New Streamlined Procedures
The IRS has listened to ACA, the Taxpayer Advocate and tax professionals and included our suggestions and recommendations in their new Streamlined Foreign Offshore Procedures program (SFOP). The program emphasizes simplicity over complexity and allows individuals to come into compliance without being subject to typical tax penalties (failure-to-file, failure-to-pay, accuracy-related, etc.). This is a great step forward and shows that the IRS is aware that the community of Americans overseas are not criminal tax evaders. This is in great part due to ACA’s efforts in Washington, DC, the Voice of Americans Overseas working to bring about positive change for Americans overseas. See our ACA press release here.
The streamlined filing compliance procedures, announced as of June 2014, are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. The streamlined procedures are designed to provide to taxpayers in such situations (1) a streamlined procedure for filing amended or delinquent returns and (2) terms for resolving their tax and penalty obligations. These procedures will be available for an indefinite period until otherwise announced.
The streamlined filing procedures that were first offered on September 1, 2012 have been expanded and modified to accommodate a broader group of U.S. taxpayers. Major changes to the streamlined procedures include: (1) extension of eligibility to U.S. taxpayers residing in the United States, (2) elimination of the $1,500 tax threshold, and (3) elimination of the risk assessment process associated with the streamlined filing compliance procedure announced in 2012. More info about this on the IRS website.