Expat tax · Streamlined procedures
The streamlined filing compliance procedures can let Americans abroad catch up on missed US returns and FBARs with no penalty.
The streamlined procedures are for people whose failure to report foreign income and accounts was non-willful, such as an honest mistake. You file the last three years of returns and six years of FBARs, and pay the tax and interest. The foreign version, for people who meet a non-residency test, charges no penalty.
Updated · Sources
Catching up in 2026
- 330
- or more full days abroad, in one of the last three years with no US abode, pass the foreign version’s non-residency test.
- 5%
- of your unreported foreign assets, at their highest year-end total, is the domestic version’s only penalty.
- $16,536
- is the cap on the non-willful penalty for each late or missing FBAR, outside the program.
The day count is the test for citizens and green card holders. The FBAR cap applies to penalties assessed on or after January 17, 2025.
Do the IRS streamlined procedures fit your case?
If you fail any of the first four tests, neither version is open to you. The last two decide which version, if either, you can use.
You left foreign income off your returns
Both versions are for people who failed to report income from a foreign financial asset and pay its tax. A missed FBAR on its own does not qualify you.
Your failure was non-willful
The IRS defines non-willful conduct as negligence, inadvertence or mistake, or a good faith misunderstanding of the law. You sign a statement certifying this, with the reasons for your failure. If you hid income or assets on purpose, the IRS points you to its separate Voluntary Disclosure Practice.
No IRS examination or investigation
You cannot use either version while the IRS has a civil examination open on any year’s return. That holds even if the examination has nothing to do with foreign assets. An investigation by IRS Criminal Investigation also rules you out.
A valid taxpayer ID
Every streamlined return needs a valid taxpayer ID, which for US citizens and residents is a Social Security number. Someone not eligible for one can use an ITIN, or send a complete ITIN application with the returns.
The non-residency test, for the foreign version
US citizens and green card holders need one of the last three years with no US abode. In that year, they must spend at least 330 full days abroad. Other non-citizens pass by failing the substantial presence test in one of those years. If you file jointly, you and your spouse must each pass.
Returns already filed, for the domestic version
To use the domestic version, you must already have filed any US return due for the last three years. It takes amended returns only. If you fail the non-residency test and missed a required return, no streamlined version is open to you.
The procedures are open to individuals and to the estates of individuals.
How does the streamlined penalty compare with FBAR penalties?
Both streamlined versions replace the FBAR penalties. Filed outside them, each late FBAR can draw its own penalty.
Foreign version
$0
If you qualify and follow the procedures in full, no penalty applies, even on the $200,000.
Domestic version
$10,000
The 5% penalty is paid with the amended returns.
Late FBARs, non-willful maximum
$99,216
This is the ceiling if the IRS charges the cap on all 6 reports.
The domestic figure is 5% of $200,000, the highest year-end total across the covered years. The FBAR figure is 6 times $16,536. The IRS can charge less, or nothing if you had reasonable cause and report the balances correctly. Tax and interest are due on every route and are not shown. Outside the program, penalties on the returns may apply too.
How do the Streamlined Foreign Offshore Procedures and the Streamlined Domestic Offshore Procedures differ?
The Streamlined Foreign Offshore Procedures let a non-willful taxpayer who meets the non-residency test catch up with no penalty. You send late or amended returns for three years with a signed Form 14653, and pay the tax and interest. Each version remains open, and the IRS last updated their pages in July 2026. The years covered are the most recent ones whose due date, including any extension, has passed.
| Foreign | Domestic | |
|---|---|---|
| Who can use it | Meets the non-residency test | Fails the non-residency test With returns filed for all three years |
| Tax returns | Late or amended Form 1040 or 1040-X, three years | Amended only Form 1040-X, three years |
| Certification | Form 14653 | Form 14654 You also figure the 5% penalty on it |
| Penalty | None | 5% miscellaneous offshore penalty In place of the FBAR and return penalties |
Mail the returns for either version on paper to the IRS in Austin, Texas, with the version’s name written in red. The late FBARs are e-filed with FinCEN instead, giving the streamlined procedures as the reason. Either version also lets you make a late treaty election to defer tax on certain foreign retirement and savings plans.
What can still go wrong when you file late FBARs or returns?
The delinquent FBAR procedures are no longer offered
The IRS no longer lists the Delinquent FBAR Submission Procedures, which let some people file late FBARs with no penalty. If the IRS has not contacted you and you are not under investigation, it now says to file them as soon as possible. Whether it then charges a penalty depends on the facts.
The IRS signs no closing agreement
The IRS does not acknowledge a streamlined submission or sign a closing agreement, the contract that would settle those years for good. The returns are processed like any others, and they can be audited or checked against bank data. If an audit finds willful conduct, more penalties or even criminal liability can follow.
The 5% counts more than bank accounts
Under the domestic version, the 5% counts every foreign financial asset left off an FBAR or Form 8938. An asset you did report still counts for any of the 3 return years in which its income went unreported.
Every missing information return goes in
Each late or amended return must include any information returns it was missing. These are forms that report foreign holdings, such as Form 3520 for foreign trusts, 5471 for foreign companies and 8938 for foreign assets. The penalty relief covers only filers who follow the procedures in full.
Penalties already assessed stay
Any penalty the IRS assessed before your streamlined submission stays in place. That includes penalties on returns you filed late or amended outside any program, which is called a quiet disclosure. If the IRS later finds more tax owed (a deficiency), that deficiency can carry penalties of its own.
Catch up with a CPA who prepares your streamlined filing and FBARs.
Valim’s CPAs help Americans at home and abroad who are behind on US taxes catch up, through the streamlined procedures for those who qualify.
- We check which version fits you, then prepare the late or amended returns and FBARs it requires, with each form in your quote.
- We prepare the US returns only. If you live abroad, your local accountant keeps filing your returns there, and we work alongside them.
- We weigh the domestic version’s 5% penalty against filing late outside the program.
- If the IRS sends a notice about one of the returns we prepared, answering it is part of your fee.
- We work out the estimated payments that keep you current.
- Individual return
- from $195
- Business return
- from $495
Each price is a starting fee for one return. A streamlined filing covers three years of returns and six of FBARs. We quote the whole job as one flat fee before work starts. We do not bill hourly.
Streamlined filing compliance procedures questions.
What are the streamlined filing compliance procedures?
The streamlined filing compliance procedures are an IRS program for non-willful failures to report foreign income and accounts. A submission covers the latest three years of returns and six years of FBARs, with the tax and interest paid. You also sign a statement certifying that the failure was not willful. The foreign version carries no penalty. The domestic version charges 5% of the unreported foreign assets, at their highest year-end total in the covered years.
Foreign or domestic streamlined: which applies to me?
The foreign version applies if you meet the IRS non-residency test in any one of the last three years. Citizens and green card holders need a year with no US abode and at least 330 full days abroad. Other non-citizens meet it by failing the substantial presence test in one of those years. On a joint return, both spouses must meet it. If you fail the test, the domestic version applies, and it requires US returns already filed for those three years.
What is the penalty under the streamlined procedures?
The Streamlined Foreign Offshore Procedures carry no penalty. That holds even after an audit, unless it finds fraud or a willful FBAR violation. The Streamlined Domestic Offshore Procedures charge a 5% miscellaneous offshore penalty instead of the accuracy-related, information return and FBAR penalties. It is figured on the unreported foreign assets, in the year their year-end total was highest. Under both, you pay the tax and interest in full.
What is the penalty for not filing an FBAR?
For a non-willful failure, the FBAR penalty can reach $16,536 per report, for penalties assessed on or after January 17, 2025. Since the Supreme Court’s 2023 Bittner decision, the cap applies once per report, however many accounts it should have listed. Reasonable cause removes the non-willful penalty, as long as the balances are then reported correctly. For a willful failure, the maximum rises to $165,353 or half the account balance, whichever is greater. The IRS has six years from the violation to assess either penalty.
Sources
- IRS, Streamlined filing compliance procedures
- IRS, U.S. taxpayers residing outside the United States (Streamlined Foreign Offshore Procedures)
- IRS, U.S. taxpayers residing in the United States (Streamlined Domestic Offshore Procedures)
- IRS, Criminal Investigation Voluntary Disclosure Practice
- IRS, Report of Foreign Bank and Financial Accounts (FBAR)
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- 31 U.S.C. § 5321, Civil penalties
- 31 C.F.R. § 1010.821, Penalty adjustment and table
- Bittner v. United States, 598 U.S. 85 (2023)
- 26 U.S.C. § 6038D, Information with respect to foreign financial assets
Reviewed and updated September 2026. General information, not advice for your situation.