How it works
U.S. residents who non-willfully failed to report foreign income or accounts file three years of amended returns, six years of FBARs, and Form 14654 certifying non-willfulness and computing a 5 percent miscellaneous offshore penalty on the highest year-end aggregate balance of the unreported accounts during the six-year period. Original returns must already have been filed; the program amends them. Taxpayers under examination are not eligible.
Why it matters
The certification is a sworn statement. If the facts look willful, the streamlined procedures are the wrong program and the Voluntary Disclosure Practice is the right one; choosing wrong can convert a fixable problem into evidence.
Example
A U.S. resident inherited a foreign account in 2019 and never reported it, believing inheritances were not taxable. The highest year-end balance was 300,000 dollars. Through the domestic procedures she pays tax on the unreported interest, files six FBARs, and a 15,000 dollar penalty, avoiding non-willful FBAR penalties that could exceed 90,000 dollars.
Related: Streamlined Foreign, Form 14654, willfulness. Read more: streamlined domestic offshore procedures.
