Delinquent on US Expat Tax Filings? No Worries With These IRS Changes!

Delinquent on US Expat Tax Filings? No Worries With These IRS Changes!

Are you behind on your US expat tax filings? If so, you aren’t alone! There are an estimated 7.6 million US expats living around the world and nearly half fail to file their tax returns each year. But alas! I bring you good news! The IRS announced major changes to their amnesty program, the Streamlined Filing Procedures, which allows you to get caught up without any penalties! This is a relief for expats who have been hesitant to get caught up because of the possible penalties they may be forced to pay.

The Streamlined Procedure is the perfect way for expat to get caught up—as most of the delinquent filers were unaware they had any US tax filing obligations. The previous version of the program was definitely more relaxed than its sister program, the Offshore Voluntary Disclosure Program (which could result in huge penalties) and was always the better option for expats. But some were still hesitant because the possibility for penalties loomed large. The IRS never said there wouldn’t be ANY penalties—until now.

The major changes to the existing Streamlined Procedure include:

  1. Extension of eligibility to US taxpayers residing in the United States.  Previously you had to reside outside of the US in order to file under this program.
  2. Eliminating a requirement that the taxpayer have $1,500 or less of unpaid tax per year. Now it doesn’t matter HOW much you may owe in taxes. You can file under this program just the same.
  3. Elimination of the risk assessment process – Under the original program you had to be deemed low-risk by the IRS to qualify.
  4. Requiring the taxpayer to certify that previous failures to comply were due to non-willful conduct.
  5. Waiving of all penalties for US taxpayers living abroad. Yes, waiving ALL penalties!

“These changes are a huge relief for US expats who got behind on their taxes because they were simply unaware of their US filing obligations,” comments David McKeegan, Co-founder of Greenback Expat Tax Services. “From our research and experience with expats, we know the biggest reason for US tax non-compliance is the lack of understanding about their filing requirements.”

While Americans living abroad will pay no penalties, eligible US taxpayers residing in the United States will pay a small one—a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that created the tax compliance issue.

“Expats have been hesitant to come forward because of the possibility of harsh penalties and now they have the opportunity to get caught up without that fear,” says McKeegan.

The previous Streamlined Filing Procedure restrictions forced many delinquent taxpayers to consider filing under the Offshore Voluntary Disclosure Program (OVDP), which is specifically designed for taxpayers who may be subject to criminal liability and substantial penalties for willful non-filing. The lifting of restrictions is significant, as now a much larger group of honest taxpayers who are not purposely hiding assets can come forward without consequence.

“The changes to the Streamlined Filing Procedure show that the IRS has finally listened to the voice of taxpayers around the world and is attempting to ease the burden of US tax compliance,” McKeegan explains. “This is a huge win for the millions of US expats who were searching for the right time and opportunity to get caught up.”

More About Greenback US Expat Tax Services

Greenback Expat Tax Services specializes in the preparation of US expat taxes for Americans living abroad. Greenback offers straightforward pricing, a simple, hassle-free process and CPAs and IRS Enrolled Agents who have extensive experience in the field of expat tax preparation. For more information, please visit