Streamlined Domestic Offshore Procedures: for people back in the U.S.

1Who qualifies for the Streamlined Domestic Offshore Procedures?

The IRS's rules for U.S. taxpayers residing in the United States set out who can use them. You generally qualify if all of these are true:

• You're a U.S. citizen, green card holder or someone who met the substantial presence test, or the estate of one.
• You don't meet the non-residency test for the foreign version. For joint filers, it's enough that one spouse doesn't.
• You filed a U.S. tax return, if one was required, for each of the three most recent years whose due date has passed.
• You didn't report income from a foreign financial asset or pay the tax on it, and may also have missed FBARs or information returns such as Forms 8938, 5471, 3520 or 8621.
• Your conduct was non-willful: negligence, inadvertence, a mistake or a good-faith misunderstanding of the law.
• The IRS hasn't opened an examination of your returns, and you're not under criminal investigation.

2What do you file? A checklist

1. Three amended returns (Form 1040-X), with the information returns that were missing. Each one, and each information return, is marked "Streamlined Domestic Offshore" in red at the top of the first page.
2. Six FBARs, filed online through FinCEN's BSA E-Filing System. For the late-filing reason, choose "Other" and enter "Streamlined Filing Compliance Procedures".
3. Form 14654, signed: your certification, the list of assets subject to the penalty, the 5% calculation and your non-willful statement. The original goes in the package, with a copy attached to each return.
4. Payment of the tax, interest and the 5% penalty, sent with the amended returns, with your taxpayer ID on the check.
5. Mail it. The IRS only accepts the package on paper, at its Streamlined unit in Austin, Texas. The FBARs are the exception: they go online.

3How is the 5% penalty calculated?

The penalty is 5% of the highest year-end total of your foreign financial assets that are "subject to the penalty," looking across the three amended tax years and the six FBAR years. An asset is subject to it for a year if:

• It should have been reported on an FBAR for that year, and wasn't.
• It should have been reported on Form 8938 for that year, and wasn't.
• It was reported, but income from it wasn't reported on your return that year.

You add up the year-end values of the assets that count, one total per year, converted to dollars. Then you take the highest yearly total and multiply it by 5%. The years aren't added together.

4A worked example: three accounts, six years

Taylor moved back to Denver from Switzerland in 2019 and files U.S. returns every year. Taylor kept three Swiss accounts: a current account, which was on Taylor's FBARs for 2020 and 2021 with its interest reported, before Taylor stopped filing FBARs; a savings account, never reported anywhere; and a brokerage account opened in 2021, never reported either. In late 2026 Taylor files under SDOP: amended returns for 2023 to 2025, and FBARs for 2020 to 2025.

For comparison, a single willful FBAR penalty can be up to half an account's balance, and the non-willful FBAR penalty alone can reach $16,536 for each year. Work out your own with the SDOP penalty calculator.

5What counts toward the 5%, and what doesn't?

Values are year-end balances, not the maximum balances that go on an FBAR, converted at a year-end exchange rate such as the Treasury's rate for December 31. Getting the base right is one of the most valuable parts of an SDOP filing: leaving out an account that belongs costs you on a signed certification, and including one that doesn't costs you 5% of it.

6What is Form 14654?

Form 14654 is the certification you sign for the domestic procedures, under penalty of perjury. It asks for:

• Your name, taxpayer ID and contact details, and your spouse's for a joint certification.
• Confirmation that you meet the eligibility conditions, and that you've now amended the returns and filed the FBARs.
• A table for each year: every foreign asset subject to the penalty, with the institution, account number, the year it was opened and its year-end value in dollars, plus a total.
• The highest yearly total, and the penalty: that total multiplied by 5%.
• Your statement of facts: the specific reasons you didn't report the income or file the forms. If spouses have different reasons, each one's goes in separately.

The statement matters as much as the numbers. How the IRS tells willful from non-willful.

7What does SDOP cost?

The IRS charges nothing to use the procedures. You pay the tax and interest on the amended returns and the 5% penalty, all straight to the IRS, never through us. In Taylor's example, that's $5,850 in penalty plus whatever tax and interest the unreported interest, dividends and gains add up to.

Our Streamlined Domestic package is $1,999 flat: three amended returns with any missing information returns, six FBARs e-filed for you, Form 14654 and your statement written with you, and the 5% base worked out with you. Extras such as PFIC reporting are priced per year, only if you need them. See all prices.

8Domestic vs. Foreign: which one is yours?

If you lived abroad in any of the last three years, check the foreign version first: one qualifying year is enough, and it saves the 5%. See every IRS catch-up option, compared.

9When isn't SDOP the right route?

The 5% is a good trade when it replaces open-ended penalties. It's the wrong trade, or not available at all, in these situations:

• The income was reported, and only FBARs are missing: the Delinquent FBAR Submission Procedures, with no penalty if you meet the conditions.
• The income was reported, and only forms like 8938, 5471 or 3520 are missing: the delinquent international information return procedures, with a reasonable cause statement.
• You lived abroad in one of the last three years: check the foreign version first. It has no penalty.
• You never filed the returns: SDOP only takes amended returns, so the returns go in another way.
• The IRS has opened an examination: the Streamlined procedures are no longer available. Talk to a professional before you reply.
• Not reporting was a choice: certifying non-willful conduct would be false. Voluntary disclosure is the route for that.

Thinking of amending on your own instead, to avoid the 5%? See quiet disclosure vs. Streamlined, side by side.

10What happens after you file?

There's no formal acceptance letter. The IRS processes the amended returns and sends notices only if something needs attention. Returns filed under Streamlined aren't automatically audited, but can be selected like any return. If they are, the IRS doesn't add accuracy-related, information return or FBAR penalties for those years, unless it finds the original returns were fraudulent. Penalties it had already charged aren't refunded.

From then on, file every year with your foreign accounts and income included. What happens after you file Streamlined.

Common questions

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