IRS Streamlined Filing
Form 1040, Form 1040-X, FinCEN 114, Form 8938
Catch-up filing under the IRS Streamlined Filing Compliance Procedures for people whose missed US returns and FBARs were non-wilful.
What does IRS Streamlined Filing involve?
Many Americans in the UK find out years late that they should have been filing US returns and FBARs. The IRS has a defined procedure for people whose failure was not wilful. It has two routes with different costs, and both depend on a written certification that has to be true.
Forms and filings involved
- Form 1040
The annual federal return for US citizens, green card holders and US residents, reporting worldwide income wherever the filer lives.
- Form 1040-X
The form for correcting a Form 1040 already filed, whether to add missed income, switch relief methods or claim a refund.
- FinCEN 114
The annual report of foreign accounts filed with FinCEN, separate from the tax return, once combined balances pass the threshold.
- Form 8938
The FATCA asset statement attached to the tax return, with higher thresholds for filers who live abroad than for those in the US.
- Form 8621
The annual return for US persons holding passive foreign investment companies, which includes most UK funds, unit trusts and ETFs.
Catching up when the failure was non-wilful
The Streamlined Filing Compliance Procedures require a defined submission: three years of delinquent or amended tax returns with all required information returns, six years of FBARs, payment of the tax and interest due, and a signed certification explaining how the failures happened.
Non-wilful conduct means negligence, inadvertence, mistake, or a good faith misunderstanding of the law. The certification is made under penalty of perjury, and its narrative deserves more care than any other page in the submission.
There are two routes and they differ on penalties. The Foreign route, for those who meet its non-residency test, carries no penalty beyond tax and interest. For US citizens and green card holders the test is 330 full days outside the US in at least one of the last three years, with no US abode in that year. The Domestic route, for those who do not meet that test, charges a 5% miscellaneous offshore penalty on the highest aggregate year-end value of the relevant foreign assets.
Neither route is available once the IRS has opened a civil examination or a criminal investigation for any year. Neither protects someone whose conduct was wilful, and a false certification creates a worse problem than the one it set out to solve. For people who owe no tax and missed only information returns or FBARs, the separate delinquent submission procedures may fit better. We review the facts first and say plainly if we think the streamlined route is the wrong one.
What a streamlined submission contains
- 01
- Eligibility review, including the non-residency test for the Foreign route
- 02
- Delinquent or amended returns with every required information return
- 03
- Delinquent FBARs filed through FinCEN with the streamlined explanation
- 04
- Non-wilful certification on Form 14653 or Form 14654, drafted from your account
- 05
- Domestic route penalty base calculated asset by asset
Who this is for
Accidental Americans who learned of the filing duty as adults
- Long-term UK residents who stopped filing after leaving the US
- Filers who sent returns but left foreign accounts or funds off them
- US residents with unreported UK accounts, pensions or inheritances
Why US UK Tax Returns
Each return is prepared with the other country's return open beside it, so a credit, election or disclosure on one is supported by the other.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
Is the streamlined procedure really free of penalties?
Only on the Foreign route, and only if the submission is accepted as non-wilful. There the cost is the tax and interest due, which for UK residents with foreign tax credits is often small. The Domestic route charges a 5% miscellaneous offshore penalty on the relevant foreign assets. It also requires that US returns were filed for the years concerned, so it works through amended returns. Which route applies depends on where you lived.
What does non-wilful actually mean?
The IRS defines it as conduct due to negligence, inadvertence or mistake, or a good faith misunderstanding of what the law required. Not knowing that citizenship carries a filing duty can qualify. Knowing about the duty and choosing to ignore it does not, and nor does deliberately avoiding finding out. The certification must set out specific facts, favourable and unfavourable. Whether your history supports it is the first thing we assess.
I have already had a letter from the IRS. Can I still use the streamlined procedures?
It depends on what the letter is. Once the IRS has begun a civil examination of any of your returns, for any year and on any subject, the procedures are closed to you, and the same applies to a criminal investigation. Not every piece of IRS correspondence is an examination. We read the letter before advising, because the answer changes which options remain and how quickly a response is needed.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
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