Streamlined Filing Compliance: catching up on missed US returns
If you are a US citizen in Canada who never filed, or fell behind, the IRS Streamlined procedures may let you catch up with reduced or no penalties, if your failure was non-willful and you meet the other eligibility rules.
Last reviewed by US Tax Professionals, a cross-border tax practice in Winnipeg.
Who it is for
The Streamlined Filing Compliance Procedures are for US taxpayers whose failure to file returns, report income, or file FBARs was non-willful. The IRS describes non-willful conduct as conduct due to negligence, inadvertence or mistake, or a good-faith misunderstanding of the law, so it is broader than never knowing about the requirement. This often includes US citizens who have lived in Canada for most of their lives and Canadians who were born in the US but raised in Canada.
The foreign offshore version
Taxpayers living outside the US who meet the non-residency requirement can use the Streamlined Foreign Offshore Procedures. If you qualify, the IRS generally does not assert the failure-to-file, failure-to-pay, or FBAR penalties for the years covered. A submission is not guaranteed to be accepted, and returns filed this way can still be examined later.
What gets filed
A typical Streamlined submission includes the three most recent years of delinquent or amended US returns, the six most recent years of FBARs, and a signed certification explaining why the failure to file was non-willful. Any US tax owed for those years, plus interest, is paid with the submission. How much that is depends on your income and the credits available.
The non-willful certification matters
The certification is a statement made under penalty of perjury, and it needs to be accurate and specific to your circumstances. This is the part of the submission that deserves the most care, and it is one reason we review eligibility before any returns are prepared.
When Streamlined is not the right fit
If the IRS has already opened a civil examination of your returns, or you are under criminal investigation, or the failure was willful, Streamlined is not available and a different path is needed. An IRS notice is not the same as an examination, so a notice on its own needs to be reviewed rather than assumed to rule it out. People who were never required to file in some years, or who only missed FBARs while reporting all their income, may have simpler options. A short review up front tells you which route applies.
Not sure how this applies to your situation?
This guide is general information, not individualized advice. Request a consultation to see how Streamlined fits your actual filing.
Who this usually applies to