IRS amnesty programs for US citizens in Australia because it is so easy to forget. You are having a great time in Australia – maybe you lived here most of your life or maybe you arrived a short while ago – either way it is easy to forget that your US tax obligations didn’t stop when you became an Australian resident.
IRS Amnesty Programs For US Citizens in Australia
And so it is easy to fall behind with your US filing. There are hefty fines when you do, but luckily all is not lost. The IRS has a number of amnesty programs that should get you out of trouble relatively scot-free. Here are five of these. The first three are general amnesties. The last two are form specific amnesties.
1 – IRS Streamlined Procedures
With this one you can come clean and avoid penalties if you file tax returns for the past 3 years and FBARs for the past 6 years. To qualify, you must file Form 14653 showing that your previous non-compliance was non-willful. That is the key word: Non-Willful.
You still pay interest on the outstanding tax but at least you avoid most of the penalties.
2 – Voluntary Disclosure Program
This one will help you if you are nervous about something. You didn’t think it was important and so you didn’t include it in your tax return, but now you are awake at night, worrying that maybe it is bigger than you thought. So this one will make sure that the IRS doesn’t slam you as ‘willful’ – there is the word again – and aren’t hit with criminal penalties.
3 – Relief Procedures for Former Citizens
This one is for accidental Americans. Let’s say you were born in Australia and one of your parents had a US passport at the time and so you ended up with US citizenship ‘by accident’. And now you want to renounce your US citizenship but first want to close all your IRS filing obligations. If this is you, then this relief will get you there.
There is just one catch. This one only applies if your total tax liablity was US$25,000 or less for the past 5 years.
4 – Delinquent FBAR Submission Procedures (“DFSP”)
If you have submitted your tax returns on time but forgot your FBARs, then this one is for you. You file the missing FBARs with a brief statement explaining why you are late.
As long as the IRS has not yet contacted you regarding the missing FBARs and as long as you are not under a civil or criminal investigation by the IRS, this amnesty will allow you to file the FBARs for up to 6 years without any penalties.
5 – Delinquent International Information Return Submission Procedures (“DIIRSP”)
This one is for you if you just forgot to file certain information about your international affairs. For example Form 5471 about your Pty Ltd in Australia (‘interest in foreign corporations’) or Form 3520 about your Australian family trust (‘transactions with foreign trusts’) or Form 8938 when your your Australian shares, units and options (‘foreign financial assets’) exceed certain thresholds.
If you have a ‘reasonable cause’ for not filing these on time and the IRS hasn’t contacted you yet asking where they are and if you are not under civil or criminal investigation by the IRS , then you can use this amnesty to file these forms without any penalties, explaining your reasonable cause.
So if you are late, don’t despair. There is almost always a solution. Just contact us. We take care of your Australian and US taxes together with our sister company in the US.
Imagine no longer having your US tax weighing on your shoulders.
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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.
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Last Updated on 23 February 2021
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