In the last few years, the (IRS) has been focusing on tracking offshore accounts of its residents and citizens. There are several forms to be filed with the US treasury department declaring ones offshore account information with compliance becoming stringent. To help low compliance risk US citizens and green card holders living abroad to comply with their offshore disclosures, a new IRS procedure went into effect from September 1st 2012. The new initiative is aimed at taxpayers who have only just become aware of their filing obligations and now seek to come into compliance with the law. The new procedure does not offer protection from criminal prosecution if the IRS and Department of Justice determine that the taxpayers particular circumstances deserve such prosecution.

Here is a quick glance at the details of this new procedure:

Who is eligible?

While this procedure is available for non-resident US taxpayers who have resided outside of the US since January 1, 2009 and who have not filed a US tax return during the same period, these taxpayers must present a low level of compliance risk

Understand low compliance risk

On the nonexistence of any excessive risk factors, if the proposed returns and application is less than $1,500 in tax owing in each of the years, they will be treated as low risk and handled in a streamlined manner. There is a probability of the risk level increasing under several circumstances. For instance if the return filed under this program is an amended return or it the taxpayer has not declared all of his/her income in his/her country of residence or if the taxpayer is under audit or investigation by the IRS etc.

What is the procedure to participate

One needs to submit a complete and accurate delinquent tax returns and mention Streamlined at the top of the return to indicate that these returns are being filed under the new initiative. It is also essential to pay all the taxes due along with interest and penalty, if any, for delay, and submit a questionnaire as prescribed by the IRS to present the compliance risk profile.

This procedure is an initiative from the IRS that provides US green card holders and citizens a likelihood of coming into compliance and is for exceptionally low risk taxpayers. With newer and more stringent laws like FATCA, the opportunities to come into compliance in the future may not be easily available. Taking advice from the professionals will save one from paying extra taxes. Taking the help of a professional will give you the necessary support and guidance in all your tax planning issues and overseas voluntary disclosure.