What is the streamlined procedure?
The IRS is aware of the fact that many Americans living abroad are unaware of their American tax return obligation, but due to the introduction of the FATCA legislation and the communication from the banks, many Americans are suddenly faced with this duty.
That is why the repentance program or amnesty program, Streamlined Foreign Offshore Procedure, was started. The current program has been around since 1 July 2014 and there were a number of predecessors. If one has not complied with the tax liability in the US, and the reason behind it wasn’t based on (malicious) evasion of US taxes, there is still a possibility to comply with the U.S. tax obligations without the risk of fines (provided one comes forward voluntarily and without malicious intent).
To participate in the streamlined procedure, one has to submit a tax return /1040 for the past 3 years as well as the FBAR information for the past 6 years. It should be noted that it must be years that fall outside the prescribed filing time limits (until the summer of 2017, it concerns US tax returns for the years 2013, 2014 and 2015, and for the FBAR, the years 2010 through 2015). This is accompanied by a statement in which you have to indicate to have acted in good faith, to have stayed less than 35 days in the US per tax year, as well as a description of the situation (where does the income/assets come from, why are you liable to pay tax).
The declaration and the U.S. tax returns should be sent to the IRS on paper. After submitting the returns, the IRS doesn’t send any form of confirmation, e.g. confirmation of receipt or confirmation of successful processing. The applicable IRS motto: no news is good news. Should there be correspondence, we can handle this for you.