Streamline Procedure structure

The IRS is well aware of the fact that some taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs) and that some of these taxpayers have just recently become aware of their filing obligations and want to comply with the law. Therefore the IRS has provided  a new option beginning September 2012 to help U.S. citizens and others residing abroad who have not been filing tax returns and provide them with the opportunity to catch up with their filing obligations if they owe little or no back taxes through a new program (IRS new streamlined procedure)

Within the framework of this new program you need to report:

Three years of retroactive tax returns (2011-2013).

Six years retroactive statements of bank accounts- F-bar (2008-2013).

Please note: In order to qualify for this program you have to meet the definition of a low risk tax payer.

The primary advantages of this new Voluntary Disclosure are:

1. 1.According to the program, no fines or penalties are imposed on late filing – it is important to note that all previous programs initiated by the IRS involved paying fines for late filing (although reduced). This is a tremendous advantage of the current program.
2. 2.Complying with the law – and by doing so avoiding sanctions imposed on you by paying large fines and penalties.
3. 3.Financially – The cost of entering the program and filing your tax returns and f-bars according to the program is significantly lower than the cost of filing those reports separately.

Please note: Due to the fact that banks in Israel will start to report financial accounts held by American citizens to the tax authorities in the U.S. starting January 2013 I highly recommend taking action with your back filing as soon as possible. The logic is simple: provide the IRS the information requested before the IRS gets to you.