All You Need to Know About Streamlined Filing Compliance Procedures
If you are a US expat living in the UK, you have to file US taxes every year and report the money you have in foreign banks with the help of the Foreign Bank Account Report (FBAR).
It is quite common that US and UK expats don’t know about their tax duties once they are living and working abroad, especially if they are the first ones from the family to settle in a faraway land. Many often misunderstand or overlook the tax duty and think that they have to file taxes only for the country that they now live in.
In case of honest mistakes, IRS has a history of showing leniency allowing expats to catch up on their past taxes with Streamlined Filing Compliance Procedures. Through this procedure, expatriates who were unaware of their tax obligations are able to catch up with previous years’ filings and minimise the penalties.
How to know if you qualify for Streamlined Filing Compliance Procedures?
In order to qualify for the Streamlined Filing Compliance, you need to be living outside the US for at least 330 days during any of the previous three years.
You also need to confirm and prove that you failed to file the US tax returns due to a genuine misunderstanding or lack of knowledge.
Once you qualify for the Streamlined Filing Compliance Procedures, you will have to ensure the following:
- You need to file the missed income tax returns for the previous three tax years which were delinquent.
- You then have to file an FBAR for the previous six tax years.
- Once you have filed the two, now you need to provide a complete statement of explanation in which you mention in detail the reason why you didn’t file your income tax return and FBAR.
- Now, the last and the most straightforward of all the steps, you need to pay the tax along with the interest due for the previous three tax years.
Does this overwhelm you?
Well, Streamlined Filing Compliance Procedures do require a lot of paperwork. So, it is wise to consult experts who have in-depth knowledge of how things are done.
Xerxes provides late or delinquent tax filers with reliable advice and efficient assistance in getting tax compliant with the IRS with the help of the Streamlined Program. The agents enrolled in the IRS help you identify, gauge and calculate the additional penalties and interests.
If you have lived outside of the US for at least a period of 3 years and have not filed US taxes, you can reach us for a no-obligation chat. Speak to one of our members to know your options and all that you need to do to catch up with your missed tax filings.
It is wise to note here that the Streamlined Filing Compliance Procedures is strictly for US taxpayers who have genuine reasons for overlooking their previous years’ US tax responsibilities. Only in cases where your delay or delinquency is not wilful, you can qualify for the program and catch up with your unpaid taxes.
Do you need help getting caught up with taxes? Xerxes Associates LLP work closely with US and UK expats from all different backgrounds, circumstances and occupations as well as high-net worth individuals in order to help them through the complexities of US and UK tax compliance requirements. Contact us if you have any questions or would like to chat about your requirements in a friendly, no-obligation manner.
Contact us if you have any questions or would like to chat about your requirements in a friendly, no-obligation manner.
