In 2014, the IRS made significant changes to its amnesty programs and introduced two simplified procedures for those delinquent taxpayers who did not willfully fail to file their US tax returns and disclose their foreign financial assets and bank accounts. The IRS introduced Streamlined Filing Compliance Procedures (“SFCP”) for both domestic US taxpayers (Streamlined Domestic Offshore Procedures – SDOP) and US taxpayers residing outside the United States (Streamlined Foreign Offshore Procedures – SFOP). The SFCP allows delinquent US taxpayers (whose who did not have willful conduct leading to non-compliance) to come forward voluntarily and avoid substantial penalties (note that SDOP does provide for a 5 percent penalty). SFCP has several eligibility requirements that delinquent taxpayers must meet in order to qualify for the respective amnesty program. Once delinquent taxpayers applied to SFCP, they are precluded from applying to OVDP, the two amnesty programs are mutually exclusive, with limited exceptions, primarily limited to an applicable transition period. As a result, making a determination on the amnesty program that applies to you under your facts and circumstances is critical and may make a difference between being protected from potential criminal prosecution and being subject to it.
How Can We Help!
We can help by guiding you through a process of identifying those procedural alternatives for becoming compliant that make most sense under your facts and circumstances. We would explore all of simplified procedures and not “push” you to OVDP, unless your facts and circumstances warrant such an approach (even then, we would provide you with our recommendation and you would ultimately decide whether you would like to proceed). More importantly, we will do our best to resolve your tax situation based on your facts and circumstances and based on what procedural alternative suits you best – not based on what general misconceptions and myths may suggest. We can help you with a willful conduct determination, a determination of whether you had reasonable cause for non-compliance, when applicable, and outlining for you a process and options that should work in your situation.