Whether living in the U.S. or abroad, U.S. citizens, permanent residents and Expats are required to file a U.S. income tax return to report world-wide income. Furthermore, the value of and information on non-U.S. financial assets must be reported. Failure to pay U.S. income tax liabilities and file the proper forms may result in civil and/or criminal penalties.
While reporting of non-U.S. income and assets is not a new requirement, it is one area in which many taxpayers, especially Expats, lack knowledge and compliance. To enforce the reporting of this information by U.S. taxpayers, the U.S. works bilaterally with over 100 countries to identify financial assets and accounts held in those countries by U.S. taxpayers, essentially leaving no country in which to shelter money from tax and reporting.
The IRS offers several programs for U.S. taxpayers to voluntarily come into compliance with income tax, Foreign Bank Account Reports (FBARs) and foreign disclosure reporting. Through these programs, the potentially harsh penalties related to incomplete or non-filings are reduced. If you were a nonresident alien who became a U.S. resident in the last six (6) years, these programs may benefit you, as well.
What voluntary compliance programs are available?
There is a program for U.S. resident taxpayers (Streamlined Domestic Procedures) and one for non-resident U.S. taxpayers (Streamlined Foreign Procedures) for taxpayers who need to become compliant with their U.S. income tax filings.
Key provisions of the Streamlined Procedures
There are other programs for U.S. taxpayers who are compliant with U.S. income tax filings but who have not filed the FBAR, foreign financial disclosures and/or information returns.
Key provisions of the Delinquent FBAR & International Information Submission Procedures
Key provisions of the Relief Procedures for U.S. citizens who expatriate after March 18, 2010
The Non-Willful or Reasonable Cause Statement
With regard to determining non-willful conduct or reasonable cause, Kerkering Barberio’s position is that the taxpayer needs an experienced attorney who specializes in IRS compliance such as these programs to guide this part of the process. We can refer you to attorneys with this experience. The attorney and our International Tax Group will work together to assist you throughout the engagement.
Whether the filing is for the Expat living abroad or the U.S citizen or permanent resident living in the U.S., the voluntary compliance filings are complex and require a knowledgeable tax professional. Each taxpayer situation is unique and needs to be reviewed on its own. Doing this requires well-versed professionals. Our International Tax Group at Kerkering, Barberio & Co. has been assisting taxpayers with offshore compliance filings for more than a decade. If you have questions on the Streamlined Program or reporting of non-U.S. income and financial assets, please contact Phoebe Trumpler at or call us at 941-365-4617.