Streamlined Filing Procedures Calculator

The Streamlined Filing Compliance Procedures are IRS programs that allow taxpayers with unreported foreign income and assets to come into compliance with reduced or no penalties. There are two versions: SFOP (Streamlined Foreign Offshore Procedures) for those living abroad with 0% penalty, and SDOP (Streamlined Domestic Offshore Procedures) for U.S. residents with a 5% penalty on the highest aggregate account balance.

To qualify for SFOP (0% penalty), you must demonstrate that you were physically outside the United States for at least 330 full days during any one of the last three tax years. This is the same test used for the Foreign Earned Income Exclusion. You must also have had no U.S. abode (permanent home) during that qualifying year.

The SDOP penalty equals 5% of the highest aggregate year-end balance of all foreign financial accounts during the 6-year lookback period. For example, if your foreign accounts peaked at $500,000 in any year, the penalty would be $25,000. This includes bank accounts, securities accounts, and certain foreign financial assets.

Non-willful conduct means the failure to report foreign income, pay tax, or submit required information returns was due to negligence, inadvertence, mistake, or conduct resulting from a good faith misunderstanding of the requirements. You must certify under penalties of perjury that your failures were non-willful on Form 14653 (SFOP) or Form 14654 (SDOP).

You must file: (1) Three years of amended or original income tax returns (Form 1040-X or 1040), (2) Six years of FBARs (FinCEN Form 114), and (3) All applicable international information returns such as Forms 8938, 5471, 3520, 3520-A, 8865, 8621, and 926 for the relevant years.

No. Streamlined procedures are only available for non-willful violations. If you knowingly failed to report foreign income or file required returns, you cannot use streamlined procedures. Willful violators should consider the IRS Voluntary Disclosure Practice (VDP), which provides criminal protection but requires full payment of taxes, penalties, and interest.

High-risk indicators include: using offshore structures to conceal assets, nominee or shell accounts, structured transactions to avoid reporting thresholds, opening accounts specifically to evade taxes, and knowing about FBAR requirements but choosing not to file. If any of these apply, consult a tax attorney before making any disclosures.

SDOP may result in lower penalties than standard FBAR procedures. Standard non-willful FBAR penalties can reach $16,536 per year (6 years = $99,216). SDOP is 5% of the highest balance once. Example: with a $200,000 peak balance, SDOP would be $10,000. Actual penalties and outcomes vary by case and are at IRS discretion.

You cannot use streamlined procedures if you are under civil examination by the IRS for any tax year, or if you are under criminal investigation by IRS Criminal Investigation (CI). If you have received any IRS notice or are being audited, you are likely ineligible. In this case, other options like the Voluntary Disclosure Practice may still be available.

The IRS reviews submissions but does not issue acceptance letters. If your submission is complete and accurate, you should not hear back. The IRS may contact you if there are questions or if they believe the failure was willful. Returns filed under streamlined are subject to normal examination procedures for a 6-year period.