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Embarking on the journey of understanding tax forms and procedures can often feel daunting, especially when it involves navigating the intricacies of international tax compliance. Among the numerous forms taxpayers might encounter is Form 14653, which serves as a beacon for U.S. persons residing outside the United States who seek to comply with tax obligations in a streamlined and less burdensome manner. The essence of this form lies in its purpose: to allow individuals who have failed to report foreign income, did not pay taxes on that income, or neglected to submit required information returns, including FBARs (Foreign Bank and Financial Accounts), to come clean under the Streamlined Foreign Offshore Procedures. This form requires taxpayers to certify that their conduct was non-willful, meaning it resulted from a misunderstanding or mistake rather than an intentional evasion of tax laws. Alongside detailing the tax owed for the previous three years, Form 14653 walks the filer through a declaration of their residency status, demanding evidence of spending a significant amount of time outside the U.S. or not meeting the substantial presence test, to qualify for these procedures. It also emphasizes the importance of a full narrative, explaining the failure to comply with the tax obligations, including the source of funds in foreign accounts, and any advice received from professional advisors. This comprehensive approach assists the Internal Revenue Service (IRS) in understanding each individual's situation, which is crucial for the assessment and collection of the correct amount of tax. Ultimately, Form 14653 encapsulates a critical opportunity for U.S. persons abroad to rectify past tax reporting and payment oversights through a process designed to be forgiving, provided they adhere to the outlined conditions and fully disclose their financial background and reasons for previous non-compliance.

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Form 14653

(October 2017)

Department of the Treasury - Internal Revenue Service

Certification by U.S. Person Residing Outside of the United

States for Streamlined Foreign Offshore Procedures

OMB Number

1545-2241

Name(s) of taxpayer(s)

TIN(s) of taxpayer(s)

Telephone number

Mailing address

City

State

ZIP code

Note: If this certification is a joint certification, the statements will be considered made on behalf of both spouses, even though the pronoun "I" is used. If spouses submitting a joint certification have different reasons for their failure to report all income, pay all tax, and submit all required information returns, including FBARs, they must state their individual reasons separately in the required statement of facts.

Certification

I am providing delinquent or amended income tax returns, including all required information returns, for each of the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed. The tax and interest I owe for each year are as follows

Year

(list years in order)

Amount of Tax I Owe Shown On

(Form 1040 or Form 1040X)

Interest

Total

Total

Note: Your payment should equal the total tax and interest due for all three years. You may receive a balance due notice or a refund if the tax or interest is not calculated correctly.

I failed to report income from one or more foreign financial assets during the above period.

I meet all the other eligibility requirements for the Streamlined Foreign Offshore procedures.

If I failed to timely file correct and complete FBARs for any of the last six years, I have now electronically filed those FBARs.

I agree to retain all records related to my income and assets during the period covered by my delinquent or amended returns until three years from the date of this certification. If I was required to file delinquent FBARs in accordance with these procedures, I also agree to retain all records (including, but not limited to, account statements) related to my foreign financial accounts until six years from the date of this certification. Upon request, I agree to provide all such records to the Internal Revenue Service.

My failure to report all income, pay all tax, and submit all required information returns, including FBARs, was due to non-willful conduct. I understand that 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.

I acknowledge the possibility that amended income tax returns I am submitting under the Streamlined Foreign Offshore Procedures may report income for tax years beyond the three-year assessment limitations period under I.R.C. § 6501(a). Other assessment limitations periods in I.R.C. § 6501 may allow the Internal Revenue Service to assess and collect tax. If I seek a refund for any tax or interest paid for the omitted income that I am reporting on my amended income tax returns because I feel that my payments were made beyond the assessment limitations period, I understand that I will forfeit the favorable terms of the Streamlined Procedures.

I recognize that if the Internal Revenue Service receives or discovers evidence of willfulness, fraud, or criminal conduct, it may open an examination or investigation that could lead to civil fraud penalties, FBAR penalties, information return penalties, or even referral to Criminal Investigation.

I meet the non-residency requirements for the Streamlined Foreign Offshore procedures as disclosed below.

Note: Both spouses filing a joint certification must meet the non-residency requirements.

Complete one of the following (two) sections regarding your residency status

If you are a U.S. citizen or lawful permanent resident (i.e., “green card holder”), complete this section:

For the covered tax period, indicate whether you were physically outside the United States for each year. You must have been physically outside the U.S. for at least 330 full days in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, and you must not have had a U.S. abode. For more information on the meaning of “abode” see IRS Publication 54.

Catalog Number 67042A

www.irs.gov

Form 14653 (Rev. 10-2017)

Page of

I was physically outside the United States for at least 330 full days (answer Yes or No for each year)

Year

Yes

No

Both spouses filing a joint certification must meet the non-residency requirement. If the number of days physically outside of the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.

If you are not a U.S. citizen or lawful permanent resident, complete this section:

If you are not a U.S. citizen or a lawful permanent resident, please attach to this certification your computation showing that you did not meet the substantial presence test under I.R.C. sec. 7701(b)(3). Your computation must disclose the number of days you were present in the U.S. for the three years included in your Streamlined Foreign Offshore Procedures submission and the previous two years. If you do not attach a complete computation showing that you did not meet the substantial presence test, your submission will be considered incomplete and your submission will not qualify for the Streamlined Foreign Offshore Procedures.

Both spouses filing a joint certification must meet the non-residency requirement. If the number of days inside the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.

Note: You must provide specific facts on this form or on a signed attachment explaining your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Any submission that does not contain a narrative statement of facts will be considered incomplete and will not qualify for the streamlined penalty relief.

Provide specific reasons for your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Include the whole story including favorable and unfavorable facts. Specific reasons, whether favorable or unfavorable to you, should include your personal background, financial background, and anything else you believe is relevant to your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Additionally, explain the source of funds in all of your foreign financial accounts/assets. For example, explain whether you inherited the account/asset, whether you opened it while residing in a foreign country, or whether you had a business reason to open or use it. And explain your contacts with the account/asset including withdrawals, deposits, and investment/ management decisions. Provide a complete story about your foreign financial account/asset. If you relied on a professional advisor, provide the name, address, and telephone number of the advisor and a summary of the advice. If married taxpayers submitting a joint certification have different reasons, provide the individual reasons for each spouse separately in the statement of facts. The field below will automatically expand to accommodate your statement of facts.

Catalog Number 67042A

www.irs.gov

Form 14653 (Rev. 10-2017)

Page of

Under penalties of perjury, I declare that I have examined this certification and all accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete.

Signature of Taxpayer

Name of Taxpayer

Date

 

 

 

Signature of Taxpayer (if joint certification)

Name of Taxpayer (if joint certification)

Date

 

 

 

For Estates Only

Signature of Fiduciary

Date

 

 

Title of Fiduciary (e.g., executor or administrator)

Name of Fiduciary

For Paid Preparer Use Only (the signature of taxpayer(s) or fiduciary is required even if this form is signed by a paid preparer)

Signature of Preparer

Name of Preparer

 

 

Date

 

 

 

 

 

Firm’s name

 

 

 

Firm’s EIN

 

 

 

 

 

Firm’s address

City

 

State

ZIP code

 

 

 

 

 

Telephone number

PTIN

 

 

Check if

 

 

 

 

 

 

 

 

Self-Employed

 

 

 

 

Do you want to allow another person to discuss this form with the IRS

Yes (complete information below)

No

 

 

 

 

Designee’s name

 

 

Telephone number

 

 

 

 

 

Privacy Act and Paperwork Reduction Notice

We ask for the information on this certification by U.S. person residing in the United States for streamlined domestic offshore procedures to carry out the Internal Revenue laws of the United States. Our authority to ask for information is sections 6001, 6109, 7801, 7803 and the regulations thereunder. This information will be used to determine and collect the correct amount of tax under the terms of the streamlined filing compliance program. You are not required to apply for participation in the streamlined filing compliance program. If you choose to apply, however, you are required to provide all the information requested on the streamlined certification. You are not required to provide the information requested on a document that is subject to the Paperwork Reduction Act unless the document displays a valid OMB control number. Books or records relating to a document or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. Section 6103, however, allows or requires the Internal Revenue Service to disclose or give this information to others as described in the Internal Revenue Code. For example, we may disclose this information to the Department of Justice to enforce the tax laws, both civil and criminal, and to cities, states, the District of Columbia, and U.S. commonwealths or possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. Failure to provide this information may delay or prevent processing your application. Providing false information may subject you to penalties. The time needed to complete and submit the streamlined certification will vary depending on individual circumstances. The estimated average time is: 8 hours

Catalog Number 67042A

www.irs.gov

Form 14653 (Rev. 10-2017)
Click for PDF Form

File Characteristics

Fact Name Detail
Form Number 14653
Revision Date October 2017
Issuing Department Department of the Treasury - Internal Revenue Service
Form Purpose Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures
OMB Number 1545-2241
Eligibility Requirements Non-residency, delinquent or amended income tax returns for the last 3 years, and failure to report income was non-willful.
Non-Residency Confirmation Method Physically outside the U.S. for at least 330 full days in one or more of the last 3 years or not meeting the substantial presence test for non-citizens/green card holders.
Statement of Facts Requirement Specific reasons for failure to report all income, taxes, and information returns including personal and financial background.

Steps to Writing 14653

Completing Form 14653, Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures, is a critical step for individuals seeking to comply with U.S. tax laws while living abroad. This form is designed for U.S. taxpayers resident outside the United States to certify that their failure to report foreign financial assets and pay all due taxes was non-willful. Understanding the form's requirements and precisely completing each section ensures that the submission will be accepted and processed smoothly by the IRS.

  1. Enter the Name(s) of taxpayer(s) at the top of the form, ensuring it matches the name(s) on your tax return.
  2. Provide the Taxpayer Identification Number(s) (TIN), typically your Social Security Number(s).
  3. Include a Telephone number where you can be reached to clarify any information or provide additional details.
  4. Fill out your Mailing address, including City, State, and ZIP code, using the address where you currently reside outside of the United States.
  5. If the certification is a joint certification, acknowledge that the statements are considered made on behalf of both spouses, and if there are different reasons for the failure to meet tax obligations, these must be noted separately within the form.
  6. In the Certification section, list the years applicable and the amounts for Tax and Interest Owed for each of the most recent 3 years where the tax return due date has passed.
  7. Admit to failing to report income from one or more foreign financial assets during the specified period and check that you meet all other eligibility requirements for the Streamlined Foreign Offshore Procedures.
  8. Confirm that you have now electronically filed delinquent FBARs for the required period if applicable.
  9. Agree to retain all relevant records related to your income and assets during the period covered by your delinquent or amended returns for three years from the date of this certification, and records related to foreign financial accounts for six years.
  10. Describe the non-willful conduct that led to your failure to report all income, pay all tax, and submit all required information returns, including FBARs, in a thorough narrative statement. Be sure to include specific reasons, your personal and financial background, and details on the foreign financial accounts or assets in question.
  11. For the non-residency requirement, if you are a U.S. citizen or lawful permanent resident, indicate whether you were physically outside the United States for at least 330 full days in any one or more of the most recent three years. If not a U.S. citizen or lawful permanent resident, attach a computation showing you did not meet the substantial presence test.
  12. Provide the necessary information if seeking to allow another person to discuss the form with the IRS.
  13. Finally, sign and date the form at the bottom, with both spouses signing in the case of a joint certification. If completed by a paid preparer, ensure their details are also filled in.

Upon completing the form, review it thoroughly for accuracy and completeness. Ensure all supplemental documents, including statements of fact and narratives detailing your non-willful conduct, are attached. Submitting Form 14653 accurately and comprehensively is vital for qualifying for the streamlined processing and potential penalty relief. In case of any doubts, consulting with a tax professional experienced with the Streamlined Foreign Offshore Procedures can provide clarity and guidance.

Important Details about 14653

What is Form 14653?

Form 14653, officially titled "Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures," is a document used by the Internal Revenue Service (IRS). It's designed for U.S. taxpayers residing abroad to certify that their failure to report foreign financial assets and income was non-willful. The form is part of the streamlined filing compliance procedures, which aim to help taxpayers comply with U.S. tax obligations related to foreign assets without facing harsh penalties.

Who needs to file Form 14653?

Any U.S. taxpayer living outside the United States who needs to catch up on reporting their income from foreign financial assets and has failed to do so due to non-willful conduct should file Form 14653. This includes both U.S. citizens and lawful permanent residents ("green card" holders) who meet the non-residency requirement for any of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) has passed. If filing jointly, both spouses must meet the non-residency requirements.

What information is required on Form 14653?

Form 14653 requires detailed information about the taxpayer including their name, Tax Identification Number (TIN), telephone number, and mailing address. Taxpayers must provide a thorough certification that includes delinquent or amended income tax returns for the recent 3 years, the amount of tax and interest owed, and a full explanation of their failure to report all income, tax, and required information returns, including FBARs. Specific reasons, background information, and the nature of the foreign financial assets must be detailed. Each taxpayer must also declare that their conduct was non-willful and adhere to certain record-keeping agreements.

What are the consequences of not filing Form 14653 if required?

Failing to file Form 14653 when required can result in delays or denial of the streamlined filing compliance procedure benefits, leaving the taxpayer subject to the full range of penalties associated with non-compliance of foreign asset and income reporting. This can include severe financial penalties and, in some cases, criminal prosecution. It is crucial for taxpayers who have failed to report their foreign financial assets in a non-willful manner to file this form and take advantage of the streamlined procedures to mitigate potential penalties.

Common mistakes

Filling out Form 14653, required for the Streamlined Foreign Offshore Procedures, is a critical step for U.S. persons residing outside the United States who wish to correct past mistakes related to the reporting of their foreign financial assets. However, mistakes in completing this form can lead to its rejection or unwanted scrutiny by the IRS. Among the common errors is the failure to provide a detailed narrative explaining the non-willful conduct that led to the failure in reporting all income, paying all tax, and submitting all required information returns, including FBARs. This explanation is pivotal because it helps the IRS understand the circumstances that led to the oversight, demonstrating that it wasn't intentional but due to negligence, inadvertence, a mistake, or a good faith misunderstanding of the law.

Another frequent oversight is neglecting individual statements for joint filers who have different reasons for their past reporting failures. If filing jointly, both spouses must separately detail their individual reasons if they vary, making sure that these distinct narratives adequately explain each spouse's specific situation. Such attention to detail ensures that the IRS can assess the unique circumstances of each spouse rather than assuming a one-size-fits-all scenario, which might not accurately represent the situation.

Additionally, inaccuracies or omissions in reporting the tax and interest owed for the specified years can be problematic. Filers must meticulously list the amount of tax and interest owed for each of the most recent 3 years where returns were late or inaccurate. This information must be correct and fully accounted for to avoid discrepancies that could trigger further investigation or question the sincerity of the filer's attempt to comply through the Streamlined Procedures.

Finally, ensuring compliance with the non-residency requirement is a common mistake overlooked by filers. U.S. citizens or lawful permanent residents need to have been physically outside the U.S. for at least 330 full days in any one of the more recent three years for which the U.S. tax return due date has passed, without having a U.S. abode. Failing to accurately compute or adequately document this requirement can lead to disqualification from the streamlined procedures. For those who are not U.S. citizens or lawful permanent residents, attaching a complete computation showing that they did not meet the substantial presence test is essential. Any failure to provide convincing documentation can deem the submission incomplete, thus not qualifying for the streamlined penalty relief.

Documents used along the form

When individuals residing outside the United States need to use Form 14653 for the Streamlined Foreign Offshore Procedures, it is often not the only document they must prepare and submit to the Internal Revenue Service (IRS). Various other forms and documents play crucial roles in ensuring that taxpayers comply with U.S. tax laws, especially when dealing with foreign income and assets. Understanding these forms can make the process smoother and help avoid complications.

  • Form 1040 or Form 1040X: These are U.S. Individual Income Tax Returns. Form 1040 is used by U.S. taxpayers to file an annual income tax return, while Form 1040X is used to correct or amend a previously filed Form 1040. These forms are referenced in Form 14653 as part of the required filing.
  • FBAR (FinCEN Form 114): The Report of Foreign Bank and Financial Accounts, also known as FBAR, must be filed electronically with the Financial Crimes Enforcement Network (FinCEN). It is required if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
  • Form 8938: Statement of Specified Foreign Financial Assets is used to report specified foreign financial assets if the total value exceeds the applicable reporting threshold. This form is part of the FATCA (Foreign Account Tax Compliance Act) legislation.
  • Form 8621: Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. Taxpayers must file this form if they have certain investments in passive foreign investment companies.
  • Form 3520: Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. This form is used to report transactions with foreign trusts and the receipt of certain large gifts from foreign persons.
  • Form 3520-A: Annual Information Return of Foreign Trust With a U.S. Owner. This form is filed by the foreign trust, providing information about the trust, its U.S. beneficiaries, and any U.S. person treated as an owner of any portion of the foreign trust.
  • Form 2555: Foreign Earned Income. This form is for U.S. taxpayers to figure the foreign earned income exclusion and the housing exclusion or deduction.

It's important for taxpayers to understand the specific requirements and eligibility criteria for each form and to ensure all relevant documents are accurately completed and timely filed. Missing out on filing a required form or incorrectly filing can lead to penalties and additional scrutiny from the IRS. Knowing which documents accompany Form 14653 can greatly ease the process of complying with the Streamlined Foreign Offshore Procedures, giving taxpayers peace of mind and facilitating their dealings with the IRS regarding foreign income and assets.

Similar forms

Form 14653 is closely related to the Form 1040, the U.S. Individual Income Tax Return. Both forms serve as crucial components of the U.S. tax system, with Form 14653 focusing on taxpayers residing outside the United States who seek to comply with tax obligations through the Streamlined Foreign Offshore Procedures. This procedure requires the taxpayer to submit amended or delinquent tax returns, which is where Form 1040 comes into play. The requirement to list the amount of tax owed on Form 1040 or Form 1040X underlines the fundamental role that Form 1040 plays in the certification process, acting as the primary tool for reporting annual income and calculating taxes owed.

Another document closely related to Form 14653 is the FBAR (FinCEN Form 114), which stands for Report of Foreign Bank and Financial Accounts. Form 14653 directly references the need to file delinquent FBARs if applicable, highlighting the interconnectedness between these two forms. The FBAR is pivotal for taxpayers with foreign financial accounts exceeding certain thresholds, and it ensures transparency with the IRS regarding such assets. The synergy between Form 14653 and FBAR is clear; both are integral in the process of rectifying past non-compliance with U.S. tax obligations related to foreign assets.

The Statement of Specified Foreign Financial Assets (Form 8938) shares similarities with Form 14653 in its focus on foreign assets. While Form 14653 is a certification for taxpayers using the Streamlined Foreign Offshore Procedures, Form 8938 requires taxpayers to report specified foreign financial assets as part of their tax returns if they exceed particular thresholds. The forms complement each other in enforcing U.S. tax laws on international income, aiming to increase transparency and compliance among taxpayers with offshore assets.

Last but not least, Form 14653 bears resemblance to Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Form 14653 requires a full disclosure of foreign financial accounts and assets, which may include transactions or relationships with foreign trusts, a primary focus of Form 3520. Although serving different purposes, both documents are essential for providing the IRS with information about a taxpayer's foreign financial activities, thereby ensuring compliance with U.S. tax obligations and laws regarding foreign transactions and accounts.

Dos and Don'ts

When filling out the 14653 form, it's important to keep certain dos and don'ts in mind to ensure the process goes smoothly and accurately. Here are eight key points to consider:

  • Do ensure you meet the non-residency requirements if you are filing under the Streamlined Foreign Offshore Procedures. This means being physically outside the United States for at least 330 full days in any one or more of the most recent three years for U.S. citizens or lawful permanent residents, or proving you do not meet the substantial presence test if you are not a U.S. citizen or lawful permanent resident.
  • Don't leave any fields blank. Incomplete forms may be considered invalid. If a section does not apply to you, indicate this appropriately instead of leaving it blank.
  • Do provide a detailed narrative statement of facts regarding your failure to report income, pay all tax, and submit all required information returns, including FBARs. This statement should include both favorable and unfavorable facts to give a complete picture of your situation.
  • Don't forget to list all years and corresponding amounts of tax owed, including interest, accurately. This is crucial for the IRS to assess the total amount due correctly.
  • Do ensure that you electronically file delinquent FBARs for any of the last six years if you failed to file these on time. This is a critical component of the streamlined procedures.
  • Don't underestimate the importance of keeping records. You agree to retain all records related to your income and foreign financial accounts for the periods specified in the form. Make sure you can comply with this requirement.
  • Do review your form for accuracy and completeness. Before signing the declaration under penalties of perjury, double-check that everything you have stated is true, correct, and complete to the best of your knowledge.
  • Don't handle complex situations on your own if you are unsure. Seeking advice from a professional with experience in Streamlined Foreign Offshore Procedures can help prevent errors and ensure compliance.

Misconceptions

Many people have misconceptions about the Form 14653 and its requirements. Understanding these misconceptions is essential for U.S. persons residing outside the United States who wish to use the Streamlined Foreign Offshore Procedures. Let's address some common misconceptions to provide clarity.

  • Only for Dual Citizens: A common misconception is that Form 14653 is exclusively for dual citizens. In reality, any U.S. person, including citizens, green card holders, and individuals meeting the substantial presence test, residing outside the U.S. may use this form if they meet the eligibility criteria.

  • Eliminates All Penalties: Some believe that by submitting Form 14653, they are completely absolved of all penalties. Although this process aims to reduce penalties for non-willful conduct regarding foreign financial assets, it does not eliminate the possibility of all penalties, especially in cases of fraud or willfulness.

  • Complex Filing Requirements: The perception that the filing requirements are overly complex and unmanageable is another misconception. While the form does require detailed information, it's structured to help taxpayers comply with U.S. tax laws regarding foreign assets methodically.

  • Automatically Qualify for Streamlined Procedures: Simply residing outside of the U.S. does not automatically qualify someone for the Streamlined Foreign Offshore Procedures. Taxpayers must meet specific non-residency requirements and certify that their failure to report was non-willful.

  • Joint Filing Is Mandatory for Married Couples: While married couples can file a joint certification, it's not mandatory. If their reasons for failing to report differ, they must state their individual reasons separately.

  • No Consequences for Inaccurate Certifications: Submitting an inaccurate certification can lead to serious repercussions, including the possibility of civil fraud penalties, FBAR penalties, or even referral for criminal investigation.

  • Forever Exempt from Future Compliance: Filing Form 14653 does not grant a permanent exemption from compliance. Taxpayers must continue to comply with all U.S. tax laws and reporting requirements for foreign assets in subsequent years.

  • Can Claim Refund for Past Penalties: Taxpayers often mistakenly believe they can claim refunds for penalties paid before submitting Form 14653. This form does not provide the basis for requesting refunds of penalties previously assessed or paid.

  • No Need to Report All Foreign Income: Every taxpayer using Form 14653 must report all foreign income from the years covered by their submission. Omitting income can invalidate the streamlined process and lead to penalties.

  • Legal Representation Is Not Necessary: While taxpayers can complete and submit Form 14653 on their own, seeking advice from a tax professional experienced in international tax compliance is highly recommended to ensure accuracy and completeness of the submission.

Understanding and addressing these misconceptions is crucial for successfully navigating the Streamlined Foreign Offshore Procedures. Taxpayers are encouraged to thoroughly review their circumstances, possibly with professional assistance, to ensure compliance and minimize potential penalties.

Key takeaways

Filling out and using Form 14653 is a critical process for U.S. persons living outside the United States who need to participate in the Streamlined Foreign Offshore Procedures. Here are four key takeaways to consider:

  • Eligibility and Purpose: Form 14653 serves as a certification by U.S. persons residing outside the United States, intending to catch up on their tax obligations under the Streamlined Foreign Offshore Procedures. This form is vital for taxpayers who have failed to report income, pay taxes, and submit required information returns, including Report of Foreign Bank and Financial Accounts (FBARs), due to non-willful conduct.
  • Non-Residency Requirement: For eligibility, both spouses (if filing jointly) must meet the non-residency requirements. This means, for U.S. citizens or lawful permanent residents (green card holders), being physically outside the U.S. for at least 330 full days in any one or more of the most recent three years for which the U.S. tax return due date has passed. For those not meeting these statuses, a computation showing that one did not meet the substantial presence test under the tax code is required.
  • Narrative Statement of Facts: A crucial component of Form 14653 is the narrative statement of facts. Applicants must provide specific reasons for their failure to report all income, pay all tax, and file all required information returns, including FBARs. This narrative should include both favorable and unfavorable facts about the applicant’s personal and financial background and details about foreign financial assets/accounts.
  • Documentation and Record Keeping: Taxpayers are obligated to retain all records related to their income and assets for the period covered by their delinquent or amended returns for three years from the date of the certification. For delinquent FBARs, records relating to foreign financial accounts must be kept for six years from the certification date. These records might be required by the Internal Revenue Service upon request.

Understanding these key aspects of Form 14653 can greatly assist U.S. persons living abroad in navigating the complexities of complying with U.S. tax laws while minimizing the risk of penalties stemming from previous non-compliance.

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