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Must know things about streamlined filing
When planning to move overseas, it is frequently simple to get caught in interesting and new things. Expats migrate across the globe and pick up their lives. In some scenarios, they intend to reside stateside too. To embrace the real and new of their expatriate thrill, US citizens might overlook their old duties. For example, their duty to file US taxes. For several of the estimated 9 million US expats are scattered across the globe currently, it might come as a big shock to know that they continue to have a tax-filing obligation with the IRS every year.
The United States of America is only one of the two nations that tax its citizens based on their income globally, regardless of their location. Another country that follows the same rule in Eritrea. This is quite common that expats have not submitted their tax returns in years, as they are not aware of the requirement to do so.
What might be done for expats who find themselves in this place? What if someone has not filed their taxes in ten years? Will the IRS ask for all ten years returns? Can you catch up on taxes without facing any huge charges?
If all these questions are coming to your mind and you don’t know anything about it, then IRS streamlined filing process might be the answer you are searching for.
What Is the Streamlined Filing Compliance Process?
The streamlining process was established in 2012 to encourage US expats to get caught in their delinquent taxes. This program is an alternative to the IRS’s other disclosure programs, such as the offshore voluntary disclosure program.
The streamlined filing compliance process was built to aid people who are at low risk of becoming tax compliant. The process was well-designed to be a less burdensome method to get caught up. Streamlined filing needs only a specific number of tax returns to be filed. That might be cut down on the effort and time required to catch up. The program was strict in the original incarnation, and several expats got bumped out of the low-risk class. Also, the IRS removed these limits in 2014, and they opened the program to a huge audience in an effort to aid more taxpayers in catching up on taxes.
Can Expats Use the Streamlined Filing Process?
They may use the streamlined foreign offshore process to become tax compliant while staying overseas. This program was well-designed for Americans staying outside the US to catch up on missed taxes. It also varies from the streamlined domestic offshore process that is a form of the streamlined program available to recent United States of America residents. Who Qualifies For the Streamlined Filing Procedures?
Recently, to become eligible for the streamlined program, one should:
- Show the reason for not filing in the past as they were not aware that they had to do so.
- They were physically present outside the country for at least 330 complete days during one or more of the three tax years.
- They don’t have an abode in the country for one or more of the three current tax years.
To become eligible for the streamlined program, one has to include a section 14653 or a signed treatment that certifies the fact as a part of the package that one has to send to the IRS.
What Do You Need to Do to Catch Up on Taxes?
In the OVDP, one has to submit eight years of tax returns, and the additional forms and the streamlined filing process are streamlined. To finish your streamlining process, one has to submit:
- Most six years of FBAR forms should be provided. One has to file the FBAR if the account balance of all of their non-US bank accounts is linked and higher than $10,000 at any time during the year. If a person is filing under the program, one has to file the form whether the threshold of $10,000 was met or not. These are submitted online as these are the criteria applicable for all FBAR forms.
- The most recent three years of federal tax returns. It might include filing amended returns if improper returns are filed before.
- Certification by US individual who is residing outside the US statement section 14563. The statement says that (1) you become eligible for the program and, (2) that all FBAR forms are filed,(3) that your failure to file resulted from a non-willful act.
What Forms Are Required for Streamlined Filing?
To file under the streamlined compliance process, you have to finish all the tax forms needed for every FBAR and federal filing, along with a special and unique form to certify eligibility for the program.
Tax forms needed for streamlined filing are:
- Form 14653 to certify that your previous filing was non-willful
- FinCen form 114 for six years of FBARs
- Form 1116- FTC or foreign tax credit
- Form 1040- US tax return of US individual income of your three years of federal tax returns
If you become eligible for the program and comply with all the necessary criteria for filing, you might not be subjected to failure-to-file, FBAR charges, or failure to pay.
What If You Don’t Qualify for the Streamlined Filing Procedures?
If the lack of filing was ‘willful’ means that you knew you had to file tax returns but considered not to, historically, your next best thing has been the OVDP. The program is also closed as of September 2018. Also, due to the scenario of taxpayers with foreign financial assets differ widely, the IRS might continue to provide the following options to address failures to comply with US tax return obligations:
- Delinquent international information return submission process
- Delinquent FBAR submission process
- IRS- Criminal investigation voluntary program of disclosure
If you don’t become eligible for the streamlined filing compliance process, then you may book a call with an experienced and skilled expat accountant to have them recommend the best suggestion for you.
Ready to Catch Up on your US Expat Taxes?
Our USTAXFiling.in expert expat IRS and CPAs enrolled agents are on standby. If you don’t know anything about streamlined filing, then our USTAXFiling experts are there to help you in the best possible way. Our experts are available 24*7 to discuss all the queries and resolve them within no time. We at USTAXFiling.in also discuss with clients a step-by-step streamlining process so that they know everything. We at USTAXFiling.in provide the best-streamlining filing process for all the taxpayers at an affordable cost. If you wish to get back on track with your taxes to get the peace you want, then schedule a call now with USTAXFiling.in.