Are you a US expat who hasn’t filed tax returns recently? Have overseas bank accounts? Are you freaking out about FBAR, OVDP, and tons of other acronyms you knew nothing about until recently?
For many US expats, the IRS is out-of-sight and out of mind. But now, as either their overseas employment is about to end or they learned about the offshore crackdown by the IRS, they are beginning to worry about what is going to happen next.
We get plenty of calls from expat Americans in this situation who maybe knew, or maybe never knew, that they should be filing tax returns. Often these are people who have lived abroad for many years and have few ties to the U.S. in their financial or daily life. When they learn about the potential trouble they may be in, they panic. But we do have some good news for you!
Good News #1: You may be able to take advantage of the Streamlined OVDP process.
The Streamlined Foreign Offshore Disclosure Program is likely available and the rules are much more favorable. Get more information on the Streamlined Disclosure programs here.
In September of 2012, the IRS rolled out procedures for Americans living abroad who hadn’t filed returns or FBARs: The Streamlined Offshore Voluntary Disclosure Program. This is a simplified process where three years of returns and six years of FBARs can be submitted without penalty. Which means a lot of the headaches you may be reading about can be bypassed.
Good News #2: Even if you can’t go streamlined, it’s still not as bad as you think.
If you live overseas, you’re probably paying foreign taxes. That, combined with the foreign-earned income exclusion, often means that expats don’t owe any taxes—or very little—when their previously-filed returns are amended. If you owe nothing, you can file six years of FBARs and request a penalty abatement. If you do owe, even if you go through the OVDP, odds are very in your favor for a successful opt-out.
If you're unsure which program is right for you, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com. Any information you share with us will be kept confidential.
