Streamlined Procedure

If you are a US citizen, you may have been hearing a lot about the “Streamlined Procedure” lately. This is a set of IRS procedures that allow certain taxpayers to catch up on their US tax filings and avoid hefty penalties for not filing. It is also called an amnesty program.

In short: under the Streamlined Procedure, you have to file 3 years of tax returns and 6 years of FBARs, backwards. And you must provide a statement that the non-compliance is “non-willful”. 

For example, suppose it is now August 2026. You would like to become compliant and submit a Streamlined Procedure. One needs to file a minimum of 3 years of US tax returns, this will be 2025 – 2024 and 2023. And one reports the last 6 years FBAR, the years 2025 – 2024 – 2023 – 2022 – 2021 and 2020.

Are you thinking about giving up your US citizenship for good in the near future? Then consult with the team at Americans Overseas, the Streamlined Procedure is extensible so that you meet the number of filed tax years sooner to be able to renounce.

The main benefits of the Streamlined Procedure are that you generally avoid penalties, only need to file 3 years of tax returns and 6 years of FBARs instead of your full filing history, and follow a fixed, predictable process instead of an uncertain do-it-yourself approach.

In order to qualify for the Streamlined Procedure, you must meet all of the following criteria:

• You must have failed to file a US tax return in any of the previous three years. 
• You have a valid SSN/ TIN.
• You must not have been contacted by the IRS about your failure to file US tax returns or report foreign financial assets in any of the previous three years. 

Note: there are more specific criteria, above are the general criteria. If you meet all of the above criteria, you can file your delinquent US tax returns and pay any taxes owed using the Streamlined Procedure. You will also need to file delinquent FBARs (Foreign Bank Account Reports) for any foreign financial accounts that you failed to disclose in the previous six years.

You do not need an SSN to start preparing the tax returns. We find that it is advisable if you are still waiting for an SSN, to start already with the Streamlined Procedure, for example. Both you and the CPA need some time to get all the documents and US tax forms together and in order. This way you can start filing immediately when your SSN arrives and you do not have to start the tax return at that time.

How can accidental Americans benefit from the Amnesty Program?

Many Accidental Americans only discover they may have US tax obligations after receiving a FATCA letter from their bank, applying for a Social Security Number, or opening an investment account. For this group, the Streamlined Procedure is usually the most relevant amnesty program, since their non-compliance was never a deliberate choice — they simply didn’t know they had a filing obligation.

To benefit from the Streamlined Procedure as an Accidental American, you typically need to show that:

• you live outside the United States;
• your failure to file was non-willful;
• the IRS has not yet contacted you about your back filing.

If you meet these conditions, you can file the missing 3 years of tax returns and 6 years of FBARs, usually without penalties.

Most Americans living abroad who file tax returns with the IRS don’t have to pay any tax, due to tax treaties with the US that prevent double taxation. If there’s no treaty or the tax rate is lower in their country of residence, they may have to pay. An experienced CPA can reduce the amount due to zero in 90% of cases by properly preparing the return, including selecting the right forms such as Form 2555 (Foreign Earned Income Exclusion) and/or Form 1116 (Foreign Tax Credit), and considering differences in passive and active income.

In addition to filing a US tax return, one must also file an FBAR form. Unlike the US tax return, there is never any tax owed on the FBAR, it is simply a reporting to the US Treasury with information about (bank) accounts at financial institutions outside of America. It is important to know that despite there never being any tax owed, the penalties are exorbitantly high if an FBAR is filed incorrectly or not at all.

Americans Overseas can assist with your U.S. tax return through their network of trustworthy and skilled CPAs who are carefully assessed for quality and cost-effectiveness. We cater to individuals with various financial situations, from straightforward to complex, including those who have multiple businesses in different countries. Our aim is to provide excellent tax returns at reasonable rates.

Contact us, free of charge and without any obligation and find out the best way to deal with your tax question(s). We are at your service.