Catch Up on Taxes With SFOP

If you’re a U.S. citizen or green card holder living overseas, you’re still expected to file U.S. tax returns on top of your foreign accounts and income every year. But if you didn’t know that and now realize you’re behind a few years, you’re not alone.

There is at least good news! The IRS offers a way to get compliant without facing massive fines: the Streamlined Foreign Offshore Procedures (SFOP).

What Is The SFOP?

The Streamlined Foreign Offshore Procedures is a special IRS program designed for taxpayers living outside the U.S. who:

• Failed to report foreign income
• Failed to file FBARs (Foreign Bank Account Reports),
• And want to fix the situation voluntarily.

The best part? If you qualify, you can become compliant without paying failure-to-file or FBAR penalties!

Who Qualifies for SFOP?

In order to qualify for this program you must meet all of the following criteria:

1. U.S. taxpayer living abroad (meeting the non-residency requirement):
   • You lived outside the US for at least 330 full days in one of the last 3 years, or
   • Your primary residence was outside the US for at least 1 of those years
2. Your failure to file or report income was due to non-willful conduct:
   • Meaning: you didn’t know, didn’t understand, or made an honest mistake
3. You are not currently under IRS civil or criminal investigation

What You Need to File Under SFOP

To use the SFOP, you need to submit:

• 3 years of amended tax returns (Forms 1040X)
• Six years of FBARs (FinCEN Form 114, filed online)
• Form 14653 – A signed statement certifying your conduct was non-willful
• Payment of any taxes due plus interest
• All returns must be filed together, not separately

Qualifying

If you qualify, here is what you can expect:

• No FBAR penalties
• No failure-to-file or failure-to-pay penalties
• You only pay the tax owed + interest
• The IRS will consider you “in compliance” once processed

If you don’t end up qualifying due to either not meeting non-residency requirements or if your compliant was willful, you may still have an option to help. You can look into the domestic streamlined procedures or Voluntary Disclosure Program (VDP), but there are possible penalties associated with those. If you’re not sure whether your behavior was “non-willful,” we recommend getting in touch with a qualified tax attorney.

SFOP is a Lifeline to Make Things Right

If you’ve been living abroad and didn’t know you were supposed to be filing U.S. tax returns or FBARs, don’t panic. The SFOP gives you a second chance without being punished for an honest mistake.

It’s better to come forward voluntarily than risk the IRS finding out later through international reporting. Clean the slate now and move forward with a peace of mind.