FlagSageWhat this covers
The streamlined filing compliance procedures are an IRS program for individuals, including estates of individuals, with undisclosed foreign financial assets. The IRS says they are available only when the failure to report income, pay tax or submit information returns did not result from willful conduct, which it defines as conduct due to negligence, inadvertence or mistake, or conduct that results from a good faith misunderstanding of the law. The program has two versions, one for people living outside the United States and one for people living in it.
Check what the streamlined procedures are for
The IRS describes the procedures as a way to file amended or delinquent returns and resolve tax and penalty obligations tied to foreign financial assets. They suit people who did not know about duties such as the FBAR or Form 8938, a common situation for accidental Americans and long-term residents abroad.
Filers must certify that their conduct was non-willful. The IRS says people worried that their conduct was willful should consider the IRS Criminal Investigation Voluntary Disclosure Practice and talk to a tax professional or legal adviser. The streamlined procedures are not designed for that situation.
Check the conditions that apply to both versions
- Only individuals and estates of individuals can use them.
- You need a valid taxpayer identification number. People without a Social Security number or ITIN can take part if they include a complete ITIN application.
- The IRS must not have opened a civil examination of any of your returns, for any year.
- You must not be under criminal investigation by IRS Criminal Investigation.
- People who made earlier quiet disclosures can still use the procedures, but penalties already assessed are not abated.
- Submitting an Offshore Voluntary Disclosure Program letter on or after July 1, 2014 rules a taxpayer out of the streamlined procedures. That program closed on September 28, 2018.
Compare the foreign and domestic versions
Both versions need a non-willful certification, three years of returns and six years of FBARs. They differ on who can use them, which returns you file and the penalty.
| Point | Streamlined Foreign Offshore | Streamlined Domestic Offshore |
|---|---|---|
| Who uses it | People who meet the non-residency requirement | People who do not meet the non-residency requirement |
| Tax returns | Delinquent or amended returns for the 3 most recent years whose due date has passed, with required information returns | Amended returns (Form 1040-X) for the 3 most recent years; you must already have filed a return for each of those years |
| FBARs | Delinquent FBARs for the 6 most recent years whose due date has passed, filed electronically | Same 6-year FBAR period, filed electronically |
| Certification | Form 14653, signed original | Form 14654, signed original |
| Penalty | Not subject to failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties if the instructions are followed | Miscellaneous offshore penalty of 5% of the highest aggregate balance or value of covered foreign financial assets |
| Payment | Full tax due plus interest | Full tax due, interest and the 5% penalty |
| Marking | "Streamlined Foreign Offshore" in red at the top of the first page of each return | "Streamlined Domestic Offshore" in red at the top of each return |
Test yourself against the non-residency requirement
For US citizens and green card holders, the IRS says you meet the requirement if, in any one or more of the three most recent years whose due date has passed, you did not have a US abode and were physically outside the United States for at least 330 full days. One qualifying year is enough.
For people who are neither citizens nor green card holders, the requirement is met if, in any one of those three years, they did not meet the substantial presence test. You can check past years with the substantial presence test tool. The 330-day count is similar to the one used for the foreign earned income exclusion, so the FEIE physical presence tool can help you rebuild dates. Whether you had a US abode is a separate question to discuss with a professional.
Understand the penalty position and its limits
Under the foreign version, the IRS says people who qualify and follow the instructions are not subject to the listed penalties. The waiver does not cover penalties already assessed for those years, and it can be lost if an examination finds the original noncompliance was fraudulent or the FBAR violation was willful.
Under the domestic version, the 5% miscellaneous offshore penalty is worked out by adding the year-end balances and values of covered assets for each year in the covered tax return and FBAR periods and taking the highest year. The IRS lists the kinds of assets included, such as accounts at foreign financial institutions, foreign stock not held in an account and foreign mutual funds.
The IRS also sets out what the procedures do not give you. There is no closing agreement and the IRS does not acknowledge receipt. Returns are not automatically audited, but they can be selected under normal procedures and checked against bank and other records, and further penalties or criminal liability remain possible if the facts differ from the certification.
Put the submission together
- Prepare the three years of returns with every required information return, such as Forms 3520, 5471 and 8938.
- Sign the certification (Form 14653 or 14654) as an original and attach copies to each tax and information return, not to the FBARs.
- Mark each return in red as the instructions describe and mail the paper package to the IRS address in Austin, Texas listed for that version. The IRS says it does not accept these submissions electronically.
- File the six FBARs electronically through FinCEN's BSA E-Filing System, choose "Other" as the reason for late filing and enter "Streamlined Filing Compliance Procedures".
- Pay the tax and interest, and for the domestic version the 5% penalty, with the submission.
Compare the other ways to catch up
Not everyone behind on foreign reporting needs the streamlined procedures. The IRS describes simpler routes when there is no unreported income, and a separate route when conduct may have been willful.
| Situation | Route the IRS describes | What it says about penalties |
|---|---|---|
| Late FBARs only, and the IRS has not contacted you and you are not under examination or investigation | File the late FBARs through BSA E-Filing as soon as possible, following FinCEN's instructions and explaining the reason for the delay | Filing late is a violation and penalties depend on facts and circumstances |
| Late international information returns, not under examination or investigation and not contacted | Delinquent international information return submission procedures: most forms go with an amended return, Forms 3520 and 3520-A follow their own instructions, with an optional reasonable cause statement | Penalties may still be assessed; for Forms 3520 and 3520-A the IRS considers the statement before assessing |
| Unreported foreign income and non-willful conduct | Streamlined foreign or domestic offshore procedures | As described above |
| Conduct that may have been willful | IRS Criminal Investigation Voluntary Disclosure Practice, with legal advice | Set by that practice, not by the streamlined terms |
Common misconceptions
Questions to take to a professional
- Can I honestly certify that my failures were due to negligence, inadvertence, mistake or a good faith misunderstanding of the law?
- In which of the last three years did I have no US abode and at least 330 full days outside the United States?
- Which information returns, such as Forms 3520, 5471 or 8938, should have been filed for those years?
- If only FBARs are late and all income was reported, is a simple late FBAR filing enough?
- For the domestic version, which assets enter the 5% penalty base and in which year was the total highest?
- Has the IRS already contacted me or opened an examination for any year, and does that rule out these procedures?
- What filing duties will I have in future years once I am caught up?
Questions people ask
What is the streamlined filing compliance procedure?
It is an IRS program for individuals with undisclosed foreign financial assets whose failures were non-willful. You file three years of returns and six years of FBARs, certify non-willful conduct and pay tax and interest. The domestic version adds a 5% penalty.
Who qualifies for the streamlined foreign offshore procedures?
US citizens and green card holders who, in any one of the three most recent years whose due date has passed, had no US abode and were outside the United States for at least 330 full days. Others qualify if they did not meet the substantial presence test in one of those years. All filers must also certify non-willful conduct.
Is there a penalty under the streamlined foreign offshore procedures?
The IRS says qualifying filers who follow the instructions are not subject to failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties. Penalties already assessed are not abated, and the waiver can be lost if fraud or willful FBAR violations are found.
How many years of FBARs do I file under streamlined?
Six. The IRS asks for delinquent FBARs for the six most recent years whose FBAR due date has passed, filed electronically through BSA E-Filing.
Can I file streamlined electronically?
The tax returns and certification go on paper to the Austin, Texas address the IRS lists for each version. The FBARs are filed electronically with FinCEN.
What if I only missed FBARs and reported all my income?
The IRS FBAR page says that if you have not been contacted and are not under examination or investigation, you should file late FBARs as soon as possible and explain the delay. Penalties depend on facts and circumstances.
Where this guide stops. A qualified US tax professional, such as an enrolled agent, a certified public accountant or a tax attorney, prepares the returns, FBARs and certification and judges whether the conduct can honestly be described as non-willful. Where conduct may have been willful, a tax attorney is the usual first call. FlagSage does not prepare filings, judge willfulness or choose a procedure for you.
Sources
- Streamlined filing compliance proceduresOfficial guidance
- U.S. taxpayers residing outside the United States (Streamlined Foreign Offshore Procedures)Official guidance
- U.S. taxpayers residing in the United States (Streamlined Domestic Offshore Procedures)Official guidance
- Delinquent international information return submission proceduresOfficial guidance
- Report of Foreign Bank and Financial Accounts (FBAR)Official guidance
- IRS Criminal Investigation Voluntary Disclosure PracticeOfficial guidance
Related
- Countries covered
- United States
- Sources
- 6 sources listed above
- Tax year
- Current rules as checked
- Review
- Not professionally reviewed
Sources checked November 9, 2026