Webinar: Streamlined Offshore Procedure Explained. Recording and Q&A Transcript
On April 27, 2022, we hosted a webinar on How to get caught up with the IRS, penalty-free which included live Q&A with our tax experts. You can access the recording and we’ve also transcribed this Q&A transcript.
We’ve grouped the questions by topic and we’ve also added links to relevant articles below.
- Streamlined Procedure – IRS Amnesty Program
- Streamlined Procedure - Commonly asked questions
- I am behind on my tax returns, which years should I file?
- I filed using the Streamlined Procedure. How long will it take the IRS to respond?
General questions about Streamlined Procedure
Q: I filed for an extension to do my US taxes for the first time last year, but didn’t end up doing them as there was a discrepancy between my parents calling me a dependent on their taxes when I’m not a dependent. So we got stuck. Am I still eligible for the Streamline Procedure?
A: Please sign up and complete your tax questionnaire - we’ll review your specific case and determine the best path forward for you.
Q: Is this webinar just for people who have businesses overseas? I am someone who just needs to do a streamlined procedure, for my personal tax returns, not for a business. Is this webinar still relevant to me?
A: Of course! We’re covering all scenarios, of which yours is likely the most common.
Q: I've already filed Streamlined Procedure and FBAR in 2021. When and how should I expect to be advised that IRS has accepted my filings under this amnesty program?
Q: Is this program has an expired time? What will happen if we didn't catch up with that amnesty program?
A: The IRS may end it at any time - that’s why you want to get started now, this is a special amnesty program, it will not be around forever.
Q: I got permanent residency in 2016 June, and have never filed tax returns as I was not aware, in my case do I have to file tax returns from 2016 or I can opt for this scheme streamlined foreign offshore. I hardly stayed in the USA.
A: We can review your scenario and determine if streamlined procedures is right for you. Please sign up and complete your questionnaire, we'll review your specific case and make a recommendation on how best to proceed.
Q: I got permanent residency in 2016 June, and have never filed tax returns as I was not aware, in my case do I have to file tax returns from 2016 or I can opt for this scheme streamlined foreign offshore. I hardly stayed in the USA.
A: We can review your scenario and determine if streamlined procedures is right for you. Please sign up for our services at TFX website for more information.
Q: As I have never filed tax returns do I have to file for an extension?
A: Yes - we recommend filing an extension for 2021 - this will allow you time to get caught up on your past returns and file 2021 on time. You can do this directly in your portal, we’ll handle everything for you.
Dual-citizenship related questions
Q: If I have dual citizenship (US and Mexico) and I have bank accounts outside of the US registered under my name but with the Mexican TAX ID (it's called "RFC"), should these be included in the FBAR reports in the streamlined procedure process?
A: Foreign financial accounts that you own should be reported on your FBAR. We’ll handle everything for you during prep, both returns & FBARs.
Q: Once I get an ITIN do I have to file 5472+1120 and/or 1040NR? I do not have physical offices, no US employees in the US. All work is done in India. I am from India. I have never been to the US. No US properties. My wife has never been to the US either. No US property either.
A: Filing requirements can vary - once you sign up and complete your tax questionnaire, we’ll be able to determine if you have any filing requirements in the US. For more info on 5472 + 1120, please see our guide on Form 5472 + Form 1120.
Q: I am US-born, but moved to Canada at 4 yrs old. Never worked in the US. When I file with the US, how are my spouse and TFSA considered? Thank you.
A: We’ll handle everything for you, Greg! TFSA and RRSP are very common, we know how to report on your returns & FBAR/FATCA.
Q: My mother is 87 in Europe since 1966. She receives a tiny US SS income and a savings account. I don’t think she earns enough to file, and I didn’t want to upset her with this info… but I heard if she doesn’t get compliant her estate may be liable for FBAR penalties. Is that correct?
A: She may not have income filing requirements, but may be a great candidate for the delinquent FBAR submission program. You want to make sure you have all your ducks in a row in the (hopefully very far off!) estate issues that may arise
Q: I got compliant a few years ago and my lawyer argued ignorance regarding FBAR penalty, which IRS accepted so I had no penalty. Is that unusual?
A: If you have no penalties, that’s fantastic. Important to stay up to date annually going forward.
Q: My son is a dual US-Australian citizen and has been working in Australia and has filed FBAR BUT No tx return because he didn't know. Recently he gifted his 1/3 share of our house back to us. We did file a gift return. H will now be filing the US return when he gets back to Australia. Will the Australian authorities charge him for capital gain even though he gifted it to us as his name had been on the deed?
A: This webinar is specifically on US tax requirements — sounds like he is behind and these programs would be great for him. Please have him sign up on our website, we’ll review and provide a plan that works best for him.
Q: How to minimize taxes when you have a UK spouse?
A: We are experienced with various strategies to reduce your taxes when you have a nonresident alien spouse. Please sign up and we can look into your situation in depth.
TFX Service
Q: Do you also provide tax planning?
A: Yep! We offer phone consultations and can assist with tax planning. You can book a call directly in your portal - see how.
Q: Do you have any people in London whom I could meet in person?
A: We have thousands of clients all over the UK, but we’re based in the US.
Q: Is it free to do the tax questionnaire?
A: Yes, it is free. This page outlines our process, where you can also see common questions.
Once you fill out the questionnaire, you’ll be assigned a preparer and that preparer will review your information and let you know if you have filing requirements. Once we review your completed information and ascertain exactly what you need to file, we'll create an engagement letter. Until you sign the engagement letter there is no obligation.
Other questions
Q: I am US citizen but do not live in US, can I take advantage of both Foreign Income Exclusion as well as Foreign Income Tax credit while filling US taxes?
A: We’ll handle everything for you. It gets complex navigating the various options available to you - that’s why we exist, this is all we do every day, we know what we’re doing :) That’s why it’s crucial for us to know your scenario so that we can avail of all options - sometimes one path is better, sometimes a different one is better, we look at your specific case and file your return in the most optimal manner.
Q: Assuming I pay taxes in both countries as both countries go with the Global Income criteria and both countries are tied up with the Double Taxation Avoidance Treaty.
A: Avoiding being double-taxed is hard, you must know how to navigate treaties and lots of legalese. That’s why you hire us, to make sure you pay minimal tax across all jurisdictions and avoid being double-taxed. We would need to review your information to determine if you qualify for various credits and if the taxes you paid qualify for the foreign tax credit, and which option is the best for you. If you live in a country with which the US has a tax treaty, we would need to analyze if the treaty applies to you. We can help you work through your options once you sign up for our services.
Q: The 2021 deadline for expat is June 15, 2022. But, tax payment is due, does that payment have to be paid in April, 2022?
A: Interest accrues from April, with penalties assessed for late payment or filing after June. The big issue is failure to file — interest is unwelcome, but minimal in the grand scheme of things — and programs like this help to avoid failure to file penalties which are onerous.
Q: I have mutual funds in India, is there a separate filing?
A: Mutual funds and other non-us investments can be complex - we’ll review and make sure we file it accurately. Failure to file these accurately can also lead to penalties. Please see our guide on Passive Foreign investment Companies (PFIC).
Q: Are we obliged to file State tax returns as well as federal?
A: It depends! We’ll review your specific case and determine your filing requirements. Here’s some interesting reading: State tax requirements.
Q: Do I need to declare what we refer to as Retirement contributions?
A: We will be able to answer this question for you depending on what country these contributions are made to. Some require that we include this in your wage income. As above, treaties also come into play and each has its own nuances. Complete your tax questionnaire, we’ll review and determine exactly what you need to file!
Q: I'm going to retire this July. Do I need to continue filing and FBAR?
A: Filing is agnostic of age - if you meet the requirements to file tax returns or FBARs, filing is required. If you don't - you don't. We don't know until you complete the questionnaire. Once you do that, we can advise you whether or not. See related article on common misconceptions about whether someone needs to file a return.
Q: Don't you have to file FBARs even if you don't have to file an income tax return?
A: Yes - they are Independent filing requirements. We’ll determine exactly what you need to file based on your questionnaire.
Q: At what age do you have to start paying taxes?
A: s soon as you have income. Not based on age-based on income! Give us a heads-up in the comments when you fill out a tax questionnaire and we’ll see. See related article: children filing requirements & kiddie tax.