Deep Dive Into Form 14653

As an American living abroad, you may be unsure of your obligations when it comes to taxes and other financial filings. This is common; many people think that their obligation to file taxes ends when they move out of the United States. However, this isn’t the case. If you’ve realized that you have been accidentally non-compliant with the IRS’ filing requirements, filing Form 14653 is an important part of becoming compliant and avoiding hefty penalties.

Understanding Form 14653

Form 14653, or Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures, allows you to request protection from penalties for failing to file. Essentially, filing this form means that your failure to file was not willful. You are stating under penalty of perjury that your late filings are due to not knowing the due date or not knowing that you had to file.

This separates you from those who intentionally choose not to file to avoid paying taxes on their foreign income and assets. The form includes spots to list the years you are filing for, the interest accrued, and the total amount you owe.

Role in the Streamlined Foreign Offshore Procedures

The Streamlined Foreign Offshore Procedures, or SFOP, is an amnesty program set up by the IRS to help ex-pats and other qualifying individuals get caught up on their U.S. taxes without getting hit by the massive penalties that often come with missed tax filings. Form 14653 includes an overview of the tax returns you’re submitting and requires you to certify that you did not willfully violate IRS regulations by failing to file.

Eligibility Criteria

There are conditions you must meet if you want to qualify for the Streamlined Foreign Offshore Procedures. First, you must be considered a foreign resident. This includes both ex-pats and “accidental Americans.” Accidental Americans are those who are legally considered American citizens but have a weak connection with the country. This generally refers to those who left the United States as children and became residents abroad. Because of their early departure from the United States, they may never have even considered their obligations to the United States.

However, as long as they are citizens, they are still required to file tax returns. You meet this requirement if you have lived outside the United States for at least 330 days in one or more of the last three years.

Second, the IRS cannot have already initiated an exam/audit regarding your tax returns. If the IRS has begun a civil examination regarding your non-filed returns, you do not qualify for the Streamlined Foreign Offshore procedure.

Another requirement is that your failure to file must be the result of non-willful conduct. Some people do not file their taxes from abroad because they know they’ll owe a substantial amount of money, they are engaging in money laundering or other illegal activity, or they are otherwise trying to shield their earnings from the United States government. This is willful conduct that intentionally breaks American law, and those who engage in it do not qualify for amnesty.

However, the IRS believes that those who unintentionally break the tax law should not face the same heavy penalties as those who intentionally violate the law. Non-willful conduct is the result of negligence, a good-faith misunderstanding of your legal requirements, or inadvertent mistakes.

If you do not meet both of these requirements, you cannot use the SFOP to request amnesty.

Examples of Qualifying Scenarios

Consider these examples. A 25-year-old American citizen has lived abroad for 20 years since their parents opted to leave the United States for Europe. They have remained a citizen but only returned to the United States rarely to visit family members left behind. They live and work in their country of residence and pay taxes there. Since they are not familiar with the United States tax process or requirements, they simply assume that they don’t have to file their taxes. Upon finding out that they should have been filing since reaching adulthood, they use the SFOP to request amnesty.

Now consider someone who left the United States much later. Although they paid taxes during their teenage years for their part-time jobs and their first job after college, they left the United States and now live as an ex-pat in another country. Because they are using the services and programs in their new country, they didn’t even think about filing an American tax return. As soon as they found out they were mistaken, they took steps to rectify the situation.

Required Information and Documentation

When you decide to take advantage of the Streamlined Foreign Offshore Procedures and become compliant with IRS regulations, you’ll need to have a variety of forms and financial data ready.

Supporting Documents and Information Needed

When you submit Form 14653, you must also submit your last three tax returns. From those forms, you’ll need to get the total amount of tax due and calculate interest for the delinquent taxes owed. You can then calculate the grand total owed. For this, you’ll need information on all sources of income for the last three years, including things like interest on accounts and inheritances.

You must also submit the last six years of FBARs if you would have been required to file them. The Report of Foreign Bank and Financial Accounts (FBAR) is required of those whose aggregate value of foreign financial accounts ever exceeded $10,000 during the calendar year. To fill out your FBARS, also called FinCEN Form 114, you will need your account numbers, the bank name in which each account is held, and the maximum balance of each account during the year.

Step-by-Step Guide to Filling Out Form 14653

After you have filled out your tax returns for the last three years, you can move on to filling out Form 14653:

  • Fill out your personal details: Fill out your name and tax identification number.
  • Write a certification statement: You need to write a statement indicating your specific reasons for failing to report your income, pay your delinquent taxes, and file your required returns. If your guidance came from a financial advisor, provide their information. If you were mistaken about your obligations as an ex-pat, you can also explain your reasoning here. It is very important that you complete this section accurately and carefully, as your acceptance into this program depends largely on this certification. It is recommended that you consult with an experienced tax attorney before submitting this form.
  • Mark the appropriate boxes: You must indicate that your failure to comply was non-willful and that you meet all requirements for the SFOP. If you had to file FBARs for the past six years, you must also mark that you have since filed them.
  • List your tax years, taxes owed, interest owed, and total owed. Double-check your numbers for accuracy and list them on the form.

Accurately Reporting Foreign Income and Assets

It’s essential to use payment records to ensure that you are providing accurate information on your tax records. If you file your tax returns under the SFOP but provide inaccurate information, you could get audited and face subsequent issues with the IRS. When converting your income and bank statement balances into American dollars, use the Treasury Reporting Rates of Exchange for accuracy.

Common Mistakes and How to Avoid Them

Avoiding these common errors can help you stay compliant with the IRS, avoid potential audits, and sidestep penalties:

  • Operating with willful blindness: The SFOP is only available to those who were non-willful in their breaking of tax laws. However, if the IRS determines that someone didn’t know about their obligations because they were willfully blind to the facts, that may not be enough to count as non-willful behavior. For example, an international financial professional with knowledge of U.S. tax laws may claim that they didn’t know they needed to file—but all the facts indicate that they should have known.
  • Failing to provide complete information: The IRS will only offer amnesty via the SFOP if the taxpayer’s disclosures are accurate and complete. If you hide, assets or sources of income and the IRS discovers that, you’ll no longer qualify, and you will have to pay all necessary penalties.
  • Failing to include necessary forms: When you submit Form 14653, you should include your tax returns, all forms that are part of your tax return, and the last six years of FBARs. If you do not include these forms, you are causing yourself unnecessary extra work.

Best Practices to Ensure Compliance

First, this is definitely an area where you may want to consult a tax attorney. The IRS’ willingness to grant you amnesty is entirely dependent on your honest and accurate disclosure. If you miscalculate the interest owed or forget to include a source of income on your tax returns, for example, you could be assessed extra penalties. A tax attorney with experience working with ex-pats can help you stay compliant.

Second, this is not a process to rush through. Once you submit your forms to the IRS, you cannot take them back. Yes, you can amend inaccurate information on your tax returns, but it’s better to submit accurate forms the first time around. Comb through your bank statements to ensure that you have accounted for all income sources, and double-check your calculations before sending your forms off.

Submitting Form 14653

The IRS does not accept electronic submissions of Form 14653 and the accompanying documents. Forms must be mailed to:

Internal Revenue Service
3651 South I-H 35
Stop 6063 AUSC
Attn: Streamlined Foreign Offshore
Austin, TX 78741

Future tax returns should be filed normally. Furthermore, note that your delinquent FBARs must be filed electronically.

Deadlines and Timeline Considerations

You should submit Form 14653 and your delinquent tax returns promptly after realizing that you have unintentionally broken the tax law. If you continue not to file after becoming aware of your obligations, your failure to file may shift from non-willful to willful.

After Submission: What to Expect

Depending on their backlog, the IRS may take some time to process your tax returns and Form 14653.

The IRS Review Process

The review timeframe varies quite a bit, as is the case with any IRS paperwork. The backlog fluctuates throughout the year, so don’t be surprised if it takes longer than you expect to see any movement on your account. Various ex-pat sources indicate that their paperwork was processed between 90 and 180 days after submission.

The IRS will process your returns and determine whether or not you owe any other money if your calculations were incorrect.

Potential Outcomes and Responses

You may not hear anything else from the IRS if you pay in full with your submission and your calculations are correct. If they find errors in your submissions that mean you owe more money, you will be sent a balance-due notice. If you overpaid, they will send a refund.

If you want to know when your returns are processed, not having any communication from the IRS can be frustrating. However, the Online Account feature allows you to check on your tax account any time you want. You can see if you owe more money, look at your tax records, and see if your payments have been applied.


Who needs to file Form 14653, and when?

U.S. persons living abroad must file the 14653 form when they are seeking penalty amnesty via the Streamlined Foreign Offshore Procedures.

How does Form 14653 relate to the Foreign Account Tax Compliance Act?

The Foreign Account Tax Compliance Act (FACTA) allows reciprocal reporting of assets and income held by U.S. persons in other countries and vice versa. If the U.S. finds out via these reports that you, as a U.S. person, have foreign assets and income, they may assess penalties for your failure to file. Form 14653 allows you to file past-due tax returns and avoid these penalties proactively.

Can Form 14653 be filed electronically?

Form 14653 cannot be filed electronically. It must be sent to the mailing address listed above.

What happens if I make a mistake on Form 14653 after submitting it?

You will need to submit an amended IRS Form 14653 via mail. This also involves submitting an amended tax return if an error in your tax return is the reason for the amended Form 14653. On top of Form 14653, write “amended” in red ink. If you are submitting amended returns, write “Amended Streamlined Foreign Offshore” at the top of the first page of each return in red ink.

How does Form 14653 impact my state tax filings?

In general, you only need to file state taxes if you live in the state in question during the year and have income generated within the state. However, some states still require ex-pats to file state taxes. These tax filings would be separate from your Form 14653. You should consult with a tax attorney or tax advisor regarding any potential state filing requirements.

Does filing Form 14653 lead to an audit?

No, returns sent in with Form 14653 are at the same risk of being audited as any other tax return. If your accurately filed tax return is chosen for an audit, you will still not be assessed failure-to-file or failure-to-pay penalties.

Resources for Further Assistance

The IRS provides a variety of resources to help ex-pats understand and fulfill their tax obligations:

Understanding your obligations as a taxpayer not living in the United States can be difficult, but once you are informed of those obligations, it’s important to move forward with compliance efforts. With Form 14653, you can get caught up with the IRS and receive amnesty from expensive penalties. The sooner you take action, the sooner you can stop worrying about the IRS catching up with you and demanding years of unpaid taxes.

Not sure where to start? Our team of expert tax attorneys can help. Call us at Wiggam Law at (404) 609-1300 or fill out our online consultation form to get help today.