As a U.S. expat, understanding your tax obligations is essential. Form 14653 plays a key role for those considering the IRS Streamlined Foreign Offshore Procedures. In this guide, we’ll simplify Form 14653, ensuring you can confidently navigate the Streamlined Program to address your tax compliance issues. Dive in to learn more and achieve seamless tax compliance.
At 1040 Abroad, we value transparency in our pricing. That’s why our Streamlined Compliance Package includes the certification statement (Form 14653) at no extra cost. With our flat fee policy, you’re assured of no hidden charges or additional costs for any extra forms required. Our goal is to provide comprehensive, worry-free support as you navigate your tax obligations
What is IRS Form 14653?
IRS Form 14653, also known as the “Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures,” is a form used by U.S. expats and Green Card Holders residing abroad to certify that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct.
This form is part of the Streamlined Foreign Offshore Procedures, which offer a way for U.S. expatriates to become compliant with their U.S. tax obligations if they haven’t been willfully avoiding these responsibilities without risking any penalties.
What is “Non-Willful” Conduct?
The IRS recognizes “non-willful” conduct as actions stemming from a lack of understanding, inadvertence, or honest mistakes regarding tax laws. This is crucial for expatriates who didn’t intentionally fail to file their income tax returns but were simply unaware of their filing obligations. The IRS states, “Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.”
What are the eligibility criteria for Streamlined Procedures?
The eligibility criteria for the Streamlined Procedures, a tax amnesty program include:
- Non-Willful Act: The failure to file late tax returns or report foreign source income must stem from a non-willful act, meaning it was due to negligence or misunderstanding of tax filing requirements, not intentional evasion.
- Tax Period: You must file 3 years of delinquent tax returns and 6 years of delinquent FBARs (Foreign Bank and Financial Accounts).
- Non-Residency Requirements: This program is specifically designed for U.S. taxpayers who are foreign residents, not for those residing in the United States.
- “Non-Willful” Certification: Taxpayers must complete a “Non-Willful” Certification on Form 14653, certifying that their reasons for delinquency were not willful.
- Taxes Without Penalties: Eligible taxpayers can file their delinquent returns and FBARs under this program to pay due taxes without penalties, avoiding additional penalties and applicable penalties that would normally apply outside this program.
By meeting these criteria, eligible taxpayers can use the Streamlined Foreign Offshore Procedures to become compliant with U.S. tax laws, addressing their past tax obligations in a more manageable and penalty-free manner.
Form 14653 Instructions
- Personal Details: Start by providing your full name, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and your current address abroad.
- Certification Statement: Provide a detailed explanation of your individual reasons and personal background that led to your previous non-compliance. Be specific and honest in your explanation. On the certification statement, include the specific years for which you are filing, the amount of tax owed for each year, and any interest due. It’s important to note that you do not report your foreign income on this statement, but rather the tax and interest owed.
- Certification Under Penalties of Perjury: The form must include a certification statement under the penalties of perjury that the information provided is true and accurate.
- Signature and Date: Both you (and your spouse, if filing jointly) must sign and date the form, affirming the accuracy of the information provided.
- Submission to the IRS: Attach this form to your delinquent income tax returns and submit them to the Internal Revenue Service as per the Streamlined Foreign Offshore Procedures.
Remember, accuracy and completeness are crucial when filling out Form 14653. If you have any doubts or need clarification, seeking professional tax advice is recommended to ensure compliance and avoid potential issues with the IRS.
Practical tips for a successful application
Non-Willful Conduct Affirmation: Clearly affirm that your failure to meet reporting requirements was due to non-willful conduct, such as negligence, inadvertence, or a misunderstanding of the law.
Joint Certification for Married Taxpayers: If filing a joint return, both spouses must provide their information and sign the form. This joint certification is crucial for married taxpayers.
We understand the complexities involved in filing for the Streamlined Compliance Program. To assist you, we include the preparation of Form 14653 for free when you choose our Streamlined Compliance Program Package.