Streamlined filers may qualify for thousands in Covid-19 refunds when back filing for 2020 and 2021. Taxpayers with US Citizen children may also qualify for tax refunds. You may actually come with a refund even after paying preparation fees!
Many US expats are surprised to find out they may have US taxes abroad and they still encounter the IRS overseas. American expat tax services are difficult to find in foreign countries. Nevertheless, US expat tax filing is mandatory even if you are paying foreign taxes abroad. Independence Expat Tax offers US expat tax advice and US tax help for expats wanting to file US taxes abroad.
The IRS streamlined program simply requires you to file 3 years of delinquent tax returns and 6 years of foreign bank account reports (FBARs) instead of having to file potentially decades of tax returns that went unfiled while living abroad.
With the foreign earned income exclusion and foreign tax credit, we find many Americans living abroad owe nothing to the IRS even though they may still need to file a tax return. Many of our clients find that they owe zero US taxes because of the foreign-earned income exclusion and foreign tax credits.
To successfully submit this Streamlined Offshore Disclosure Program to the IRS, you should work with an experienced Certified Public Accountant who has a track record of dealing with these types of situations.
Eligibility for Streamlined Procedures
Streamlined Filing Compliance Procedures are for US citizen taxpayers and permanent residents who neglected to file tax returns and/or foreign bank account reports (FBARs). The requirements for the program include:
The expat taxpayer failed to file required tax returns for the most recent 3 years or failed to file required international informational returns (forms 5471, 8938, 8621, 3520, etc.).
US expats must file 6 years of the most recent Foreign Bank Account Report (FBAR).
Expat taxpayers certify that failure to file was NON-willful; essentially, they were not fully aware of the filing requirements.
You must have been abroad for 330 days in at least ONE of the three years you will present to the IRS.
Qualified taxpayers that comply with all the requirements for Streamlined Foreign Offshore Procedures will NOT have penalties that would typically be associated with failing to file tax returns and FBARs. If for some reason there is an amount due, there would be a small amount of interest associated but, IRS interest rates are VERY low in comparison to typical credit cards or other types of loans. If you don’t end up owing any tax, you don’t even need to worry about any interest!
If you are not aware you needed to file US income taxes while living abroad the Streamlines Procedure for US expats is helpful to get you caught up while avoiding penalties.
Why Work with a Certified Public Accountant (CPA) on your streamlined procedure?
These facts are truly the differentiating factor for CPAs!
IRS Streamlined Offshore Returns with Ease