Streamlined Domestic Offshore penalty calculator

1How does the SDOP penalty calculator work?

It follows the calculation on Form 14654, the certification you sign for the Streamlined Domestic Offshore Procedures. You give it each account's balance on December 31 of each year. It converts each balance to dollars at the Treasury's rate for that December 31, adds up each year, picks the highest yearly total and multiplies it by 5%.

The years are 2020 to 2025: the six FBAR years for someone filing in late 2026. The three amended tax years, 2023 to 2025, fall inside them. If you file at another time, the years-to-file calculator shows your exact years.

Before you start, have the December statements for each account for 2020 to 2025, know which accounts were on your FBARs and whether their income was on your returns, and note each account's currency.

It's an estimate to plan with. The real base depends on which assets count.

2Which assets count toward the 5%?

The IRS calls these assets "subject to the miscellaneous offshore penalty." A foreign financial asset is subject to it for a given year if any of these is true:

• 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 properly, but income from it wasn't reported on your return that year.

In the three earlier years, only the FBAR test applies; in the three tax years, all three do. So an account can count in some years and not in others, as the example below shows.

3How is the SDOP penalty calculated, step by step?

1. List every foreign financial asset you held at any point in the covered years.
2. Mark which ones were subject to the penalty in each year, using the three tests above.
3. Take each marked asset's year-end value, converted to dollars at a year-end exchange rate, such as the Treasury's rate for December 31.
4. Add up the marked assets for each year, so you have one total per year.
5. Take the highest yearly total and multiply it by 5%. That's the penalty.

Form 14654 has a table for exactly this: each asset by year, a total for each year, the highest total, and the 5% penalty. The values are year-end balances, not the maximum balances that go on an FBAR.

4A worked example

Take someone who moved back to the U.S. from the UK in 2018. They filed U.S. returns every year, and filed FBARs too, but listed only their UK current account, whose small interest was on their returns. They never reported their cash ISA or their stocks and shares ISA, opened in 2022, and never put the ISAs' income on their U.S. returns. In late 2026 they file under SDOP: amended returns for 2023 to 2025, and FBARs for 2020 to 2025.

The funds inside the stocks and shares ISA are probably PFICs too. That doesn't change the 5%, but it does change how their income is taxed on the amended returns. Try it: enter those balances in U.S. dollars in the calculator above, and you'll get the same $4,500.

5SDOP or SFOP: which penalty applies to you?

The 5% only applies under the domestic version. If you qualify for the Streamlined Foreign Offshore Procedures, the same accounts cost nothing in penalties.

For someone filing in late 2026, the three years checked are 2023, 2024 and 2025, and the 330 days have to be full days outside the U.S., with no U.S. home, in at least one of them. So if you moved back recently, check the foreign version first: one qualifying year abroad is enough. Every IRS catch-up option, compared.

6Which mistakes change the number?

• Adding the years together instead of taking the highest one.
• Using the FBAR's maximum balance instead of the year-end value.
• Including accounts that were reported properly, with their income on your return.
• Including things that aren't financial assets, like a home you own in your own name.
• Mixing exchange rates instead of using each year's year-end rate.
• Forgetting accounts that were closed. An account closed in 2022 still counts for 2020 and 2021 if it should have been reported then.
• Leaving out assets that belong in the base. That makes the number lower, but Form 14654 is signed under penalty of perjury, and the IRS can ask for the records behind it.

The aim is the right number, not the lowest one.

7What does the 5% replace?

If you complete the procedures, the 5% is the only penalty for the covered years. You aren't subject to accuracy-related penalties, information return penalties or FBAR penalties for them, unless an examination finds the original return was fraudulent. Penalties the IRS had already charged for those years aren't refunded.

Compare that with fixing things quietly, where none of those penalties is waived, or with FBAR penalties alone, which can reach $16,536 for each year even when the conduct wasn't willful. For a penalty base under about $330,000, the whole 5% is less than that maximum for a single year.

8How do you fill in the calculator?

• One card per account or asset. Name it if you like, so you can tell them apart, and pick its currency.
• Use the December statement. The balance on December 31 is what counts, not the highest balance in the year. For a pension or insurance policy, use the value on the annual statement closest to year-end.
• Leave years blank before an account was opened, after it was closed, and in any year it was reported properly with its income.
• Add shares and other assets too, not just bank accounts, if they should have been on Form 8938 and weren't. Each one gets its own card.
• Use U.S. dollars for any currency not on the list, converted at the Treasury's December 31 rate for each year.

9What do you do with the number?

If the number looks large, that's often a sign the base needs checking: accounts reported properly, or things that aren't financial assets at all, can easily end up included. Treat it as a planning figure. Before anything is filed, check whether you qualify for the foreign version, which has no penalty; then the accounts are checked one by one against the three tests, and the final figure goes on Form 14654 with the statements behind it. Our Streamlined Domestic package is $1,999 flat, with the 5% base worked out with you, three amended returns, six FBARs e-filed for you and Form 14654. See all prices.

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