The IRS Streamlined Program: A Safe Way for Expats to Catch Up on US Taxes

Del Sol CPA
Jul 18, 2025
3 min read

Updated: Jul 25, 2025

It is common for Americans living and working overseas to overlook their tax obligations; many simply don’t realize that their tax obligations don’t stop at the border!

Penalties for non-compliance can be severe – luckily, the Streamlined Filing Compliance ststreamlined-filing-compliance-procedures-for-us-taxpayers-abroadreamlined-filing-compliance-procedures-for-us-taxpayers-abroadProcedures offer an option for expat taxpayers abroad to catch up on prior year tax filings while minimizing penalties.

To qualify for the Offshore Streamlined Filing Compliance Procedures, you must:

You have lived in a foreign country for at least 330 days during one of the last three years and not maintained a US residence.
Confirm that your failure to file US tax returns and FBAR was due to an honest misunderstanding of your responsibilities.

Qualifying taxpayers will need to:

File income tax returns for the prior three delinquent tax years.
File an FBAR (FinCEN Form 114) for the prior six tax years.
Complete a statement of explanation detailing why your tax returns and FBAR weren’t filed.
Pay the tax and interest due for the last three years.

For more information on the FBAR, check out our previous article.

Common Misunderstandings About the IRS Streamlined Foreign Offshore Procedures

Many US taxpayers living overseas mistakenly assume that the Streamlined Foreign Offshore Procedures don’t apply to them. But if you’ve ever lived, worked, or held financial assets abroad, it's worth revisiting your US tax filing history—even if you believe you're no longer part of the US tax system.

Common Misconceptions

“I moved back to Taiwan years ago and don’t have any US assets or accounts—this doesn’t apply to me.” “I’m retired and have no income—why should I be concerned?”

These are common misunderstandings. In reality, the SFCP was designed to help taxpayers correct past noncompliance related to unreported foreign income or assets—even if the errors were unintentional.

When Should You Consider the Streamlined Procedures?

You may need to consider SFCP if any of the following apply:

You earned foreign income (such as salary, rent, or dividends) that was unreported or underreported in your US tax filings.
You received tax-exempt income in your country of residence that was still reportable to the IRS.
You held foreign bank accounts, financial assets, trusts, inheritances, or business interests that weren’t properly disclosed on FBAR or Form 8938.

Even if you no longer actively hold these assets or earn foreign income, past omissions can still trigger significant penalties.

Why SFCP Matters: Reduced Penalties for Non-Willful Errors

The Streamlined Filing Compliance Procedures allow eligible individuals to come into compliance with reduced or even waived penalties—as long as their failure to report was non-willful.

SFCP Eligibility Requirements: Are You Qualified?

To qualify for either the Streamlined Foreign Offshore Procedures (SFOP) or the Streamlined Domestic Offshore Procedures (SDOP), you must meet the following key requirements:

Your failure to report must be non-willful—caused by negligence, inadvertent mistake, or misunderstanding of US tax obligations.
You must not be under an IRS civil audit or criminal investigation at the time of your SFCP submission.
Any prior IRS penalties must be paid in full before applying.
You must have a valid US Tax Identification Number—either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).

Conclusion

Navigating the US Tax code is tricky for any US taxpayer, let alone those with high incomes, diverse assets or those who are living abroad. Equipping yourself with the right knowledge makes the process much more manageable and helps to minimize your taxable income. And while knowledge goes a long way, having support and guidance from a team of professionals will not only put your mind at ease but ensure that your hard-earned money is being protected from unnecessary over-taxation.

At Del Sol CPA and Associates, we provide personalized guidance and services tailored to our clients’ unique situations and needs. If you have any questions or concerns about your tax return or asset management plans, give us a call or send us an email with your inquiry and we’ll be happy to help.