Delinquent International Information Return Submission Procedures
Updated: May 15th, 2017
The Delinquent Internatio
New developments in U.S expat taxes – Delinquent international information return submission procedures
What is the delinquent international information return submission procedures?
A modified version of the Offshore Voluntary Program (OVDP), FAQ 18 procedures, which allows certain taxpayers to file amended returns to include previously omitted delinquent foreign information returns such as 3520, 3520-A, 5471, 5472, 8398, 926 or 8621. The program is an alternative to OVDP and Streamlined Filling Compliance Procedures (“Streamlined”).
How is this procedure different than FAQ 18?
While FAQ18 required that the taxpayer be fully compliant (other than with regards to the missing foreign information returns), these return submission procedures do not require that the taxpayer be fully compliant. This means that even if the taxpayer failed to include income, related to the foreign information return, and even if the taxpayer owes tax on that income, he is not precluded from using the return submission procedures.
Who should file delinquent information returns using the return submission procedures?
If you don’t need to use the OVDP or Streamline program, but:
You have not filed one or more required international information returns.
You have reasonable cause for not timely filling the information returns/
You are not under civil examination or a criminal investigation by the IRS, and you have not already been contacted by the IRS about the delinquent information returns.
What needs to be included in the Delinquent International Information Return Submission Procedures package?
1. An amended tax return with all delinquent foreign information returns attached (except 3520 and 3520-A which are separately filed)
2. A statement establishing reasonable cause for the failure to file. As part of the reasonable cause statement, taxpayers must also certify that any entity for which the information returns are being filed was not engaged in tax evasion.
What are the benefits of using Delinquent International Information Return Submission?
Assuming that the IRS accepts the reasonable cause argument, there will be zero penalties assessed on the late-filled foreign information returns (in general, penalties for failing to file these types of returns can be as much as 10,000$ per year, per return)
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