Let's see if we can help make sense of the madness related to Streamlined Offshore Procedure dates.
Do you want tax year 2015 to be part of your Streamlined submission?
Under the rules of the Streamlined Offshore Procedures, taxpayers must amend three years of U.S. tax returns, starting with the most recent year that has passed its due date, and then going backwards. As of today, the most recently passed tax year is 2014. So right now, your Streamlined disclosure period, for the required three years of amended returns, is 2012 through 2014. However, if your Streamlined submission is sent after April 15, 2016 (Domestic) or June 15, 2016 (Foreign), and you do not file an extension for your 2015 taxes, then your Streamlined disclosure period would “shift” to 2013 through 2015.
The options are:
- First, you can file an extension to file your 2015 tax returns. This would mean there would be additional time to complete your 2012-2014 Streamlined submission, and your submission period would not shift until after the extension date (October 15th), keeping the period 2012-2014 for amended tax returns.
- Second, you could file your 2015 tax return before April 15th (Domestic) or June 15th (Foreign) and file your Streamlined submission after April 15th. This means you remain current with your tax filings and it shifts your submission period to 2013-2015.
How do you know which option to choose?
There's really no detriment to your Streamlined submission, or to you, if your Streamlined case is submitted after April 15th (Domestic) or June 15th (Foreign). For domestic cases June is looking more and more like what you may end up choosing, simply because of how close we are to that due date. There's not many tax preparers that are going to say "Sure! I can get your offshore return done and submitted in 15 days!" These types of submissions are complicated and time consuming, and not the type of thing you want to make errors on. This is exactly why we asked our clients ahead of time to decide on how they'd like to proceed. But if you're not in that boat…
There are a couple of things to consider. For a Foreign Offshore submission think about where you were living; what years were you out of the country? The rules say you don't need to be an expat for all of the years, you just need one qualifying year. If you shift from 2012-2014 to 2013-2015, will that change you from having a Foreign submission to a Domestic submission? Foreign submissions are subject to a 0% penalty and you certainly don't want to lose that advantage.
For your Domestic submission, it's worth examining your income. Generally the most current year is the year where you have the highest income. If you shift to 2013-2015 this could mean that the higher balance year would be in compliance. That's a good thing!
We find that we really have to look at every client on a case by case basis to decide what would be best. If you're uncertain and need some guidance, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
