Form 14654: the domestic certification, and the 5%
Form 14654 is what you sign for the Streamlined Domestic Offshore Procedures. Like its foreign twin, it certifies that your conduct was non-willful. Unlike it, it also calculates your 5% miscellaneous offshore penalty.
1What it asks
- Your details, and your spouse's for joint returns.
- The three amended tax years and six FBAR years covered.
- That you filed returns for the three years, and that you've now amended them and filed the FBARs.
- A list of the foreign assets subject to the penalty, with their year-end values.
- Your non-willful explanation, with specific facts.
2The penalty base
For each year in the covered period, you add up the year-end values of the foreign assets that should have been reported and weren't, or whose income wasn't reported. The highest of those yearly totals, times 5%, is the penalty.
Work it out with the SDOP penalty calculator, with a worked example.
Lived abroad in one of the last three years? Check the Streamlined Foreign Offshore Procedures first: they have no penalty. Every route is compared in IRS tax amnesty options for expats.
Common questions
Do I pay the 5% if I owe no extra tax?
Yes, if assets are subject to the penalty. The 5% is based on the assets, not the tax. That's why checking whether you qualify for the foreign version, with no penalty, comes first.
Can I file Form 14654 with original returns?
No. The domestic procedures are for amended returns only. If you never filed, a different route is needed.
Filing Streamlined Domestic? Let's get the base right.
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Reviewed by Lewis Grunfeld, CPA. General information, not advice for your specific situation.