IRS Streamlined Program – New IRS Instructions for Amending a Streamlined Submission
Recently, the IRS updated its Frequently Asked Questions and Answers page for the IRS Streamlined Program to include a new section on amending Streamlined submissions. Since the inception of the IRS Streamlined Program, there has been some uncertainty as to how taxpayers should proceed if they realize, after the fact, that they have made a mistake on a Streamlined submission.
This new guidance is a welcome development for U.S. expats as it both shows a recognition by the IRS that taxpayers living abroad may be prone to mistakes in their Streamlined submissions, which often include complex international tax items, and it delineates specific procedures for cleaning up and refilling the submission without negative repercussions. Like a regular return, amendments to a Streamlined submission must be made prior to an IRS examination of the submitted forms.
THE IRS STREAMLINED PROGRAM
In recent years, the IRS has made it clear to taxpayers that it is more interested in disclosure than in punishing late filers or non-filers. In 2014, the IRS expanded its more lenient program, the IRS Streamlined Program (also known as the “Streamlined Procedures”), allowing taxpayers to participate if they can explain in a written statement how their delinquency was not intentional. This lenient approach has allowed tens of thousands of delinquent taxpayers to successfully enter its tax amnesty programs.
Under the Streamlined Procedures, non-willfully delinquent taxpayers can catch up on their taxes potentially without incurring any penalties. Participants are required to file only 3 years of tax returns and 6 years of FBARs.
AMENDING A STREAMLINED SUBMISSION
On its amended FAQ page, the IRS states that in order to amend a Streamlined submission, a taxpayer can do the following:
1. Correct the error by providing the IRS with an amended return, FBAR, or Form 14653 (the Streamlined certification form), depending on where the error lies.
2. On the top of the certification form, write “amended” in red ink, and on the top of the first page of each corrected amended tax return write “Amended Streamlined Foreign Offshore” in red ink. If the taxpayer made a mistake in filing FBARs with FinCEN, he or she must efile amended FBARs with FinCEN.
3. Explain all facts and circumstances concerning the error in the original Streamlined submission.
4. While not clearly stated, it should be presumed that if extra tax is found to be owed due to the submission error, an additional payment to the IRS should be included in the amended submission.
HOW WE CAN HELP
If you are an expat considering the IRS Streamlined Program, then it is critically important that you understand the requirements and relief available under your specific circumstances. Our expat professionals have helped many clients understand and participate in the IRS Streamlined Program, both under the foreign and domestic offshore programs. We are available to help discuss your options and guide you through each step of the program.
Joshua Ashman, CPA is a U.S. trained and licensed tax accountant and co-founder of Expat Tax Professionals LLC. Joshua specializes in the areas of international taxation and expat taxation. Joshua has extensive experience with international compliance and expat tax returns and the issues that typically arise, such as reporting related to foreign pension schemes, Passive Foreign Investment Companies (PFICs), FATCA and Form 8938, FBAR reporting, foreign trust reporting on Form 3520 and reporting related to ownership of foreign corporations (Form 5471). Joshua can be reached at email@example.com
Ephraim Moss, Esq. is a U.S.-trained and licensed international tax attorney and co-founder of Expat Tax Professionals LLC. Ephraim specializes in expat taxation and regularly assists U.S. expats with their U.S. tax planning and compliance matters. In addition, Ephraim advises those who are non-compliant with navigating the complex web of U.S. tax compliance through the various disclosure amnesty programs currently offered by the IRS. Ephraim can be reached at firstname.lastname@example.org
By Ephraim Moss, Esq. & Joshua Ashman, CPA