Streamlined Filing Procedures for Americans Abroad

Do Americans Abroad Still Have to File U.S. Taxes?

Generally, yes. U.S. citizens are generally subject to U.S. tax reporting on their worldwide income even when they live abroad.

This can include:

Foreign wages and self-employment income
Interest and dividends
Rental income
Investment income
Foreign pensions
Business income

You may not necessarily owe U.S. tax. The Foreign Tax Credit and Foreign Earned Income Exclusion may reduce U.S. tax depending on your circumstances.

However, owing no tax doesn't necessarily eliminate your filing requirements.

What Are the Streamlined Foreign Offshore Procedures?

The program is designed for certain taxpayers living abroad whose failure to report income, foreign financial assets, or required international filings resulted from non-willful conduct.

The IRS generally defines non-willful conduct as conduct resulting from negligence, inadvertence, mistake, or a good-faith misunderstanding of the law.

Qualifying taxpayers generally submit:

3 years of U.S. tax returns
6 years of delinquent FBARs
Required international tax forms
Form 14653 and a non-willfulness certification
Payment of applicable U.S. tax and interest

Eligible taxpayers who properly complete the Streamlined Foreign Offshore Procedures generally aren't subject to certain failure-to-file, failure-to-pay, accuracy-related, information-return, and FBAR penalties for the covered submission.

What If You Haven't Filed U.S. Taxes in 5 or 10 Years?

Don't assume you need to file every missing year before determining which compliance procedure applies.

The Streamlined Foreign Offshore Procedures generally cover three years of tax returns and six years of FBARs, but individual circumstances can change what's required.

Taxpayers with long filing gaps, foreign companies, investments, pensions, trusts, or other complex assets should have their situation reviewed before submitting delinquent returns.

Do You Need to File an FBAR?

Americans abroad may need to file an FBAR (FinCEN Form 114) if the aggregate value of their foreign financial accounts exceeded $10,000 at any point during the year.

Foreign accounts can include certain:

Bank accounts
Savings accounts
Investment accounts
Joint accounts
Foreign retirement or pension accounts

FBAR is separate from your federal income tax return.

What If You Own a Foreign Business or Investments?

International reporting can become more complicated if you own a foreign company, partnership, investment account, mutual fund, ETF, rental property, or other foreign assets.

Additional filings may include Form 8938, Form 5471, Form 8858, Form 8865, or Form 8621, depending on your circumstances.

That's why a Streamlined filing should involve more than simply preparing three Forms 1040.

Who Qualifies for Streamlined Filing?

Eligibility depends on several factors, including your residency history and whether the prior noncompliance was genuinely non-willful.

The Streamlined procedures aren't appropriate for every taxpayer. If there is a concern that prior conduct may have been willful, professional legal and tax advice should be obtained before making a submission.

Behind on U.S. Taxes Abroad? Valoria Can Help

Valoria Tax helps Americans abroad get back into U.S. tax compliance.

Our international tax services include:

Streamlined Foreign Offshore Procedures
Delinquent U.S. tax returns
FBAR and FATCA reporting
Foreign Tax Credit analysis
Foreign business reporting
Foreign investment reporting
Expat tax preparation
Cross-border tax planning

If you've been living overseas and haven't filed U.S. taxes for several years, we can review your filing history, foreign accounts, income, and assets to determine the appropriate path forward.

Schedule a consultation with Valoria Tax to discuss your U.S. expat tax filing requirements.

Behind on U.S. Taxes Abroad? The IRS Streamlined Filing Procedures Explained

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