Streamlined Foreign Offshore Procedures: The IRS Amnesty for Expats

What the programme is

The Streamlined Foreign Offshore Procedures are the IRS's standing route back into the system for taxpayers abroad whose non-compliance was non-wilful. In exchange for a defined catch-up package and a signed certification, the IRS waives the penalties that would otherwise apply — failure-to-file, failure-to-pay, accuracy-related, FBAR and information-return penalties. You pay the tax and interest the returns actually show; for the offshore variant of the programme there is no miscellaneous penalty at all.

It is not a negotiation and not a disclosure of last resort. It is a published procedure with published terms, used by thousands of ordinary expats — typically people who simply never knew the US taxes its citizens abroad.

Who qualifies

Two gates matter.

Non-wilfulness. Your failure to file, report income or submit FBARs must have been due to negligence, inadvertence or mistake, or a good-faith misunderstanding of the law. The honest "I had no idea" of most long-term expats fits comfortably. Deliberate concealment does not — and certifying non-wilfulness falsely creates a bigger problem than the one being solved.

The non-residency test. For US citizens and Green Card holders, in at least one of the three most recent tax years you must have had no US abode and have been physically outside the United States for at least 330 full days. Most people genuinely settled abroad pass without difficulty; recent returnees and heavy US travellers need to check the day counts before assuming anything.

There is also a gatekeeping condition that defines the programme's urgency: it is unavailable once the IRS has opened an examination of any year, and disqualification cannot be undone. More on that below.

What you actually file

The package has three parts:

1. Three years of tax returns — the most recent three years for which the deadline has passed, filed late or amended, with all required information returns (Form 8938, Form 5471, Form 3520 and the rest) attached.
2. Six years of FBARs — filed electronically with FinCEN, flagged as streamlined submissions.
3. Form 14653 — the Certification by U.S. Person Residing Outside of the United States, in which you certify eligibility and non-wilfulness and, crucially, tell the story: how the non-compliance happened, in your own specific facts.

The Form 14653 narrative is the heart of the submission. A thin or generic statement invites questions; a clear, truthful account of how an ordinary life abroad produced the gap is what the programme was built for. This is where experienced drafting matters most.

What it costs — and what it saves

Under the procedures, the IRS waives failure-to-file and failure-to-pay penalties, accuracy-related penalties, information-return penalties and FBAR penalties for the covered years. What remains is any tax and interest shown on the three returns. Because most UK-resident Americans are covered by foreign tax credits or the foreign earned income exclusion, the returns frequently show little or no US tax — making the true cost of coming clean mostly the preparation itself.

Compare the alternative: FBAR penalties alone can run to five figures per year even for non-wilful conduct, and information-return penalties stack on top. The programme trades an open-ended risk for a known, usually modest, cost.

Before the IRS contacts you — the deadline nobody announces

The streamlined procedures have no closing date, but they close for you the moment the IRS opens a civil examination of any of your years — and FATCA means the IRS increasingly finds expats first, through bank reporting rather than anything you file. A programme with no deadline can still be lost overnight.

That is the practical advice hiding in the rules: eligibility is a wasting asset. If you know you are behind and non-wilful, the streamlined route is at its cheapest and most certain right now, while the choice of when to come forward is still yours.

What the process feels like in practice

A typical streamlined engagement runs in a predictable arc. Gathering comes first — three years of income records from both countries, and account statements deep enough to reconstruct six years of maximum balances for the FBARs. Preparation follows: the returns with their credits, exclusions and information forms, the FBAR filings, and the Form 14653 narrative drafted around your actual history. Then everything is submitted as one coordinated package, returns to the IRS's streamlined unit and FBARs electronically to FinCEN. The IRS does not send a certificate of absolution — a processed submission that attracts no follow-up is the normal good outcome, and most participants simply carry on filing normally from the next year. The whole exercise usually takes weeks, not months, once the records are in hand.