Streamlined Filing Procedures
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Amended or Delinquent Tax Returns – Streamlined Filing Compliance Procedures
The streamlined filing compliance procedures (“streamlined procedures”) described below are available to taxpayers who certify that their failure to report foreign financial assets and pay all tax due in respect of those assets was non-willful. The procedures are designed to provide taxpayers in such situations with (i) a streamlined method for filing amended or delinquent returns and (ii) terms for resolving their tax and penalty obligations.
Originally offered on September 1, 2012, the streamlined procedures were expanded and modified in 2014 to accommodate a broader group of U.S. taxpayers, including certain U.S. residents, and to eliminate the former $1,500 tax-due threshold and the prior risk-assessment questionnaire. The streamlined procedures are separate from the now-closed Offshore Voluntary Disclosure Program (OVDP), which ended on September 28, 2018.
Quick scope (what you typically submit)
- 3 years of amended or delinquent federal income tax returns (with all required information returns and schedules, e.g., Forms 8938, 3520/3520-A, 5471, 8621, as applicable), plus payment of tax and statutory interest.
- 6 years of delinquent FBARs (Report of Foreign Bank and Financial Accounts) on FinCEN Form 114 (previously Form TD F 90-22.1).
- Penalty framework: Under the Streamlined Domestic Offshore Procedures (SDOP), a Title 26 miscellaneous offshore penalty of 5% generally applies to the highest aggregate balance/value of relevant foreign financial assets in the FBAR/Form 8938 period. Under the Streamlined Foreign Offshore Procedures (SFOP), no failure-to-file, failure-to-pay, accuracy-related, information-return, or FBAR penalties are imposed when all requirements are met.
Who the streamlined procedures are for
The streamlined procedures are intended for taxpayers whose non-compliance was non-willful—that is, due to negligence, inadvertence, or a good-faith misunderstanding of the law. As part of the submission, taxpayers must provide a signed non-willfulness certification explaining the facts and circumstances.
Who is not eligible
- Taxpayers currently under IRS civil examination for any year included in the streamlined submission.
- Taxpayers with indications of willful conduct, fraud, or involvement in criminal investigations.
- Taxpayers whose facts do not support a credible non-willfulness certification.
Two variants: SDOP vs. SFOP
The streamlined procedures have two tracks. The Streamlined Domestic Offshore Procedures (SDOP) apply to taxpayers who meet the IRS’s U.S. residency criteria for the relevant years; the Streamlined Foreign Offshore Procedures (SFOP) apply to taxpayers who meet the IRS non-residency requirement for at least one of the covered years. Residency is determined under the definitions in the procedures (including “abode” and day-count rules); it is not always identical to income-tax residency tests.
What goes into the submission
- Amended or delinquent returns: For the most recent three years for which the filing due date (or extended due date) has passed, including all schedules and international information returns (e.g., Forms 8938, 3520/3520-A, 5471, 8621) that should have been filed.
- FBARs: For the most recent six calendar years, electronically file FinCEN Form 114 via the BSA e-Filing system.
- Certification: A signed statement (on the IRS-prescribed form) certifying non-willfulness and, for SDOP, computing the 5% miscellaneous offshore penalty base.
- Payment: Include remittance of all tax due and statutory interest; under SDOP include the 5% penalty payment.
How the 5% miscellaneous offshore penalty works (SDOP)
The 5% penalty generally applies to the highest aggregate balance/value of foreign financial assets that (i) should have been, but were not, reported on FBAR and/or Form 8938, or (ii) produced income that was not properly reported. The measurement period typically matches the six FBAR years. Certain duplications are avoided so the same asset is not penalized twice.
FBAR filing basics
FBARs disclose foreign financial accounts over which a U.S. person had a financial interest or signature/other authority when the aggregate value exceeded $10,000 at any time during the year. The FBAR is a Title 31 filing made on FinCEN Form 114 (separate from the income tax return). The annual due date is April 15 with an automatic extension to October 15.
After you file
Streamlined submissions are subject to IRS review. The IRS may accept the submission as filed, request additional information, or, if the facts do not support non-willfulness or eligibility, assess additional taxes and penalties under applicable law.
Notes and cautions
- The streamlined procedures are not appropriate for resolving willful conduct.
- “Quiet” (silent) filings—amending returns or filing late FBARs outside a recognized procedure—can lead to examination and penalties.
- Because international information returns (e.g., Forms 3520/3520-A, 5471, 8621) carry separate penalties, careful inclusion and completeness in the three-year amended return package are important.
If you are unsure whether you qualify for SDOP or SFOP—or whether the streamlined procedures are the right path—seek individualized advice based on your facts and documentation.
Streamlined Filing & Amended/Delinquent Returns – FAQ
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An IRS program for taxpayers whose failure to report foreign assets and related income was non-willful, providing a defined package of amended/delinquent returns and FBARs with a clear penalty framework.
Taxpayers who certify their non-compliance was due to negligence, inadvertence, or good-faith misunderstanding—not willful conduct. A signed non-willfulness certification is required.
SDOP applies to U.S. residents and includes a 5% miscellaneous offshore penalty. SFOP applies to non-residents and generally waives failure-to-file/-pay, accuracy, information-return, and FBAR penalties if all rules are met.
Typically three years of amended/delinquent tax returns with all required schedules and six years of FBARs (FinCEN Form 114).
Conduct due to negligence, inadvertence, or good-faith misunderstanding of the law—not intentional avoidance. Your certification explains the facts and circumstances.
No. Taxpayers currently under IRS civil examination for a covered year are generally ineligible for streamlined procedures.
It’s 5% of the highest aggregate balance/value of relevant foreign financial assets in the FBAR/Form 8938 period that were unreported or produced unreported income, avoiding double-counting of the same asset.
Yes. When all requirements are met, the IRS does not impose failure-to-file/-pay, accuracy-related, information-return, or FBAR penalties under SFOP. Tax and statutory interest still apply.
Common forms include 8938 (FATCA), 3520/3520-A (foreign trusts), 5471 (foreign corporations), 8621 (PFICs), 8858 (disregarded entities/branches), and 8865 (foreign partnerships), as applicable.
Yes. You need a valid SSN or ITIN. If you don’t have one, you can typically apply for an ITIN and include it with your streamlined submission.
FBARs are due April 15 for the prior calendar year with an automatic extension to October 15; no separate extension request is required.
Yes. Quietly amending returns or filing late FBARs outside a recognized procedure can lead to examination and penalties. Streamlined is a formal, defined pathway for eligible non-willful taxpayers.
The IRS reviews submissions and may accept them as filed, request additional information, or assess further tax/penalties if eligibility or non-willfulness isn’t supported.
Facts vary. Additional years may be filed as required outside the streamlined package. Get advice to avoid duplicating penalties or missing required forms.
States have their own amended-return rules, interest, and penalties. Some mirror federal changes; others don’t. Review your state’s requirements.
No. The Offshore Voluntary Disclosure Program closed in 2018. Streamlined may be available for non-willful cases; other options exist for different fact patterns.
Keep bank/investment statements, foreign tax documents, Forms 1099/1042-S equivalents, proof of account ownership, prior returns, and copies of all filed forms, certifications, and FBARs.
In some cases, yes—but it’s fact-intensive and risk-sensitive. Streamlined provides defined terms for eligible non-willful taxpayers; reasonable-cause submissions should be carefully evaluated.
Yes. Statutory interest accrues on underpayments regardless of SDOP/SFOP. Under SDOP, the 5% penalty is in addition to tax and interest.
Our cross-border team prepares amended and delinquent returns, coordinates FBAR and international forms, and helps determine eligibility for SDOP/SFOP. See Income Tax Filing or contact us.
Need a specialist? We prepare amended/delinquent returns and align them with your international reporting. Explore our service or get in touch.
