FILING UNDER THE STREAMLINED FOREIGN OFFSHORE PROCEDURES

If you have lived outside the United States in recent years and determine that you have failed to comply with FATCA and foreign income reporting requirements, you may be able to rectify these issues without incurring penalties for non-compliance.  

In order to qualify for the Streamlined Foreign Offshore Procedures (“SFOP”), you must be able to demonstrate that your non-compliance was not willful (i.e. not on purpose).  Additionally, if you are a US citizen or green card holder, you must be able to show that you lived outside of the United States for at least 330 full days for at least one of the three preceding tax years.  If you are not a US citizen or permanent resident, you meet the non-residency requirement if for any of the 3 preceding tax years, you do not meet the substantial presence test applicable to resident aliens.  

If you meet these requirements, you can achieve a waiver of the 5% penalty typically applicable under the Streamlined Domestic Offshore Procedures (“SDOP”).  Note, that unlike the SDOP, it is not a requirement that you have filed all tax returns timely in order to qualify under the SFOP.  

The process for filing under SFOP involves preparing amended tax returns for the previous 3 years and FBARs (Fincen 114) for the previous 6 years. You calculate any increase in tax that was owed on the unreported foreign income.  Additionally, you must file any omitted forms related to foreign assets and income such as 5471, 8858, 8865, 8621, 3520, 3520-A, etc.  Unlike SDOP, you are not required to calculate a 5% penalty based on the highest year-end balances during the lookback period.    

SFOP provides a good option for taxpayers who, again, were not willful in their non-compliance and were living outside of the United States very recently.  Our experienced Offshore Disclosure specialists can help you determine whether SFOP is the best option for you given your circumstances.  Additionally, through our close association with Lanphier LLP, a full service CPA firm of which Dennis Lanphier is also a partner, we are also able to assist you with preparing the applicable tax returns necessary to complete this disclosure process.

Contact our firm today to discuss your Offshore Disclosure issues and how we can assist you.