You are an expat and may have heard about the Offshore Streamlined Procedures Amnesty Program. Do you really know what it is? Or are you shuffling your way around it and hoping it doesn’t involve you.
The Offshore Streamlined Procedures help the IRS is a way for Americans living abroad who haven’t been filing their U.S. taxes to catch up without facing penalties.
All American citizens are required to file a U.S. tax return every year. Expat taxes can be tricky. Filing deadlines and requirements are different. And if you have foreign accounts that you haven’t reported, offshore penalties can stack up, causing a big headache for overseas Americans.
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If you haven’t been filing your U.S. taxes from abroad, or you have offshore accounts that you accidentally forgot to repore, the Offshore Streamlined Procedures can be a great way to get caught up.
How To Qualify
Before you can qualify, you must prove that you weren’t filing due to non-willful conduct. Non-willful conduct means you didn’t know or understand the rules – you were not aware that you needed to report your earnings or account information.
As part of the Offshore Streamlined Procedures, you will have to explain why your conduct was non-willful.
The IRS also requires that you have a Taxpayer Identification Number or TIN. This number is usually your Social Security number. Without it, the IRS can not process your request.
Submitting The Forms
To qualify for the Offshore Streamlined Procedures Amnesty Program you must submit your last three years of U.S. tax returns.
You can also claim exemptions that mean most people don’t end up owing back taxes.
You may also be required to submit three years’ worth of international information returns and six years of FBAR filings.
Hire A Tax Professional
Once submitted and approved, you will be clear of any penalties for not filing. This program will require you to follow all taxpayer rules and laws for the future. Once you are aware of what is required of you, you can not be non-willful again in the future.
To be sure you get it right, hire a tax specialist to assist you. Your tax specialist will know all the forms to fill out and how to minimise your tax bill and avoid penalties.