Low Risk Tax payer definition

The IRS will determine the level of compliance risk presented by the submission based on information provided on the returns filed and based on additional information provided in response to a Questionnaire required as part of the submission. Low risk will be predicated on simple returns with little or no U.S. tax due. Absent any high risk factors, if the submitted returns and application show less than $1,500 in tax due in each of the years, they will be treated as low risk and processed in a streamlined manner.

The risk level may rise if any of the following are present:

• If any of the returns submitted through this program claim a refund;
• If there is material economic activity in the United States;
• If the taxpayer has not declared all of his/her income in his/her country of residence;
• If the taxpayer is under audit or investigation by the IRS;
• If FBAR penalties have been previously assessed against the taxpayer or if the taxpayer has previously received an FBAR warning letter;
• If the taxpayer has a financial interest or authority over a financial account(s) located outside his/her country of residence;
• If the taxpayer has a financial interest in an entity or entities located outside his/her country of residence;
• If there is U.S. source income; or
• If there are indications of sophisticated tax planning or avoidance.