Skip
Navigation

Subscriptions

IRS
Guidewire

IRS
Newswire

QuickAlerts

e-News for
Tax Professionals

IRS Tax
Tips

More

Language

Español

中文

한국어

TiếngViệt

Pусский

Information
For...

Individuals

Businesses

Charities &
Non-Profits

Government
Entities

Tax
Professionals

Retirement
Plans

Tax
Exempt Bonds

Text
Search
Advanced

Filing

Payments

Refunds

Credits &
Deductions

News & Events

Forms & Pubs

Help & Resources

for Tax Pros

Like

Share Print

Instructions for New Streamlined Filing Compliance Procedures for
Non-Resident, Non-Filer U.S. Taxpayers

On June 26, 2012, the IRS announced
new streamlined filing compliance procedures for non-resident U.S. taxpayers to
go into effect on September 1, 2012. These procedures are being implemented in
recognition that some U.S. taxpayers living abroad have failed to timely file
U.S. federal income tax returns or Reports of Foreign Bank and Financial
Accounts (FBARs), Form TD F 90-22.1, but have recently become aware of their
filing obligations and now seek to come into compliance with the law. These new
procedures are for non-residents including, but not limited to, dual citizens
who have not filed U.S. income tax and information returns.

Description of the New Streamlined Procedure

This streamlined procedure is designed for taxpayers that present a low
compliance risk. All submissions will be reviewed, but, as discussed below, the
intensity of review will vary according to the level of compliance risk
presented by the submission. For those taxpayers presenting low compliance risk,
the review will be expedited and the IRS will not assert penalties or pursue
follow-up actions. Submissions that present higher compliance risk are not
eligible for the streamlined processing procedures and will be subject to a more
thorough review and possibly a full examination, which in some cases may include
more than three years, in a manner similar to opting out of the Offshore
Voluntary Disclosure Program.

Taxpayers utilizing this procedure will be required to file delinquent tax
returns, with appropriate related information returns (e.g. Form 3520 or 5471),
for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for
the past six years. Payment for the tax and interest, if applicable, must be
remitted along with delinquent tax returns. For a summary of information about
federal income tax return and FBAR filing requirements and potential penalties,
see IRS
Fact Sheet FS-2011-13. (December 2011).

In addition, retroactive relief for failure to timely elect income deferral
on certain retirement and savings plans where deferral is permitted by relevant
treaty is available through this process. The proper deferral elections with
respect to such arrangements must be made with the submission. See instructions
below.

Eligibility

This procedure is available for non-resident U.S. taxpayers who have resided
outside of the U.S. since January 1, 2009 and who have not filed a U.S. tax
return during the same period. These taxpayers must present a low level of
compliance risk as described below

Amended returns submitted through this program will be treated as high risk
returns and subject to examination, except for those filed for the sole purpose
of submitting late-filed Forms 8891 to seek relief for failure to timely elect
deferral of income from certain retirement or savings plans where deferral is
permitted by relevant treaty. It should be noted that this relief is also
available under the Offshore Voluntary Disclosure Program. See below for the
information required to be submitted with such requests. (If you need to file an
amended return to correct previously reported or unreported income, deductions,
credits, tax etc, you should not use this streamlined procedure. Depending on
your circumstances, you may want to consider participating in the Offshore
Voluntary Disclosure Program.)

All tax returns submitted under this procedure must have a valid Taxpayer
Identification Number (TIN). For U.S. citizens, a TIN is a Social Security
Number (SSN). For individuals that are not eligible for an SSN, an Individual
Taxpayer Identification Number (ITIN) is a valid TIN. Tax returns filed without
a valid SSN or ITIN will not be processed. For those who are ineligible for an
SSN, but who do not have an ITIN, a submission may be made through this program
if accompanied by a complete ITIN application. For information on obtaining an
SSN, see www.ssa.gov. For information on obtaining an ITIN, see the ITIN
page.

Compliance Risk Determination

The IRS will determine the level of compliance risk presented by the
submission based on information provided on the returns filed and based on
additional information provided in response to a Questionnaire required as part
of the submission. Low risk will be predicated on simple returns with little or
no U.S. tax due. Absent any high risk factors, if the submitted returns and
application show less than $1,500 in tax due in each of the years, they will be
treated as low risk and processed in a streamlined manner.

The risk level may rise if any of the following are present:

If any of the returns submitted through this program claim a refund;

If there is material economic activity in the United States;

If the taxpayer has not declared all of his/her income in his/her country
of residence;

If the taxpayer is under audit or investigation by the IRS;

If FBAR penalties have been previously assessed against the taxpayer or if
the taxpayer has previously received an FBAR warning letter;

If the taxpayer has a financial interest or authority over a financial
account(s) located outside his/her country of residence;

If the taxpayer has a financial interest in an entity or entities located
outside his/her country of residence;

If there is U.S. source income; or

If there are indications of sophisticated tax planning or avoidance.

For additional information about what information will be requested to
evaluate risk, please see the Questionnaire.

Instructions for Using This Procedure

Taxpayers wishing to use these streamlined procedures must:

Submit complete and accurate delinquent tax returns, with appropriate
related information returns, for the last three years for which a U.S. tax
return is due.

Please note that all delinquent information returns being filed under
this procedure should be sent to the address below with the rest of the
submission.

Include at the top of the first page of each tax return "Streamlined" to
indicate that the returns are being submitted under this procedure. This is
very important to ensure that your returns get processed through these
procedures.

Submit payment of all tax due and owing as reflected on the returns and
statutory interest due and owing.

For returns determined to be high risk, failure to file and failure to
pay penalties may be imposed in accordance with U.S. federal tax laws and
FBAR penalties may be imposed in accordance with U.S. law.  Reasonable
cause statements may be requested during review or examination of the
returns determined to be high risk. For a summary of information about
federal income tax return and FBAR filing requirements and potential
penalties, see IRS
Fact Sheet FS-2011-13 (December 2011).

Submit complete and accurate delinquent FBARs for the last six years for
which an FBAR is due.

Please note that all delinquent FBARs being filed under this procedure
should be sent to the address below with the rest of the submission and not
to the Detroit address where timely filed FBARs are submitted.

Submit a complete, accurate, and signed Questionnaire.

If the taxpayer must apply for an ITIN in order to file delinquent returns
under this procedure, the application and other documents required for
applying for an ITIN must be attached to the the required forms, information,
and documentation required under this streamlined procedure. See the ITIN
page for more.

Any taxpayer seeking relief for failure to timely elect deferral of income
from certain retirement or savings plans where deferral is permitted by
relevant treaty will be required to submit:

a statement requesting an extension of time to make an election to defer
income tax and identifying the pertinent treaty provision;

for relevant Canadian plans, a Form 8891 for each tax year and each plan
and a description of the type of plan covered by the submission; and

a dated statement signed by the taxpayer under penalties of perjury
describing:

the events that led to the failure to make the election,

the events that led to the discovery of the failure, and

if the taxpayer relied on a professional advisor, the nature of the
advisor’s engagement and responsibilities.

This program has been established for non-resident non-filers. Generally
amended returns will not be accepted in this program. The only amended returns
accepted through this program are those being filed for the sole purpose of
submitting late-filed Forms 8891 to seek relief for failure to timely elect
deferral of income from certain retirement or savings plans where deferral is
permitted by relevant treaty. Non-resident taxpayers who have previously filed
returns but wish to request deferral provisions will be required to submit:

an amended return reflecting no adjustments to income deductions, or
credits; and

all documents required in item 7 above.

The documents listed above must be sent to:

Internal Revenue
Service
3651 South I-H 35
Stop 6063 AUSC
Attn:
Streamlined
Austin, TX 78741

Other Considerations

Taxpayers who are concerned about the risk of criminal prosecution should be
advised that this new procedure does not provide protection from criminal
prosecution if the IRS and Department of Justice determine that the taxpayer's
particular circumstances warrant such prosecution. Taxpayers concerned about
criminal prosecution because of their particular circumstances should be aware
of and consult their legal advisers about the Offshore Voluntary Disclosure
Program (OVDP), announced on January 9, 2012, which offers another means by
which taxpayers with undisclosed offshore accounts may become compliant. For
additional information go to the OVDP
page. It should be noted, however, that once a taxpayer makes a submission
under the new procedure described in this document, OVDP is no longer available.
It should also be noted that taxpayers who are ineligible to use OVDP are also
ineligible to participate in this procedure.

Page Last Reviewed or Updated: 31-Aug-2012

Resolve an Issue

Appealing
a Tax Dispute

Responding
to a Notice

Taxpayer Advocate
Service

Disaster
Relief

Learn About IRS

Commissioner

Organization

Compliance &
Enforcement

Tax Stats, Facts & Figures

IRS.gov
Information

Contact Your
Local IRS Office

Contact Us

More ...

Work at IRS

Careers

Job Postings

Equal
Employment Opportunity

Contracting Opportunities

Get Important Info

Tax Fraud & Abuse

Privacy Policy

Reporting Phishing

Identity Theft

No FEAR Act

Freedom of
Information Act

Accessibility

Visit Other Sites

Español

中文

한국어

Pусский

TiếngViệt

Help
Improve IRS Search

U.S. Treasury

USA.gov

Whitehouse.gov

Treasury Inspector General for Tax
Administration