The Form 14653, officially titled "Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures," is a document utilized by the Department of the Treasury - Internal Revenue Service. This form is designed for U.S. persons who reside outside the United States to certify that they have complied with all the necessary requirements for the Streamlined Foreign Offshore Procedures, which includes reporting all income, paying all tax dues, and submitting all required information returns, including FBARs. To ease the process of compliance and to potentially reduce the risk of penalties for failure to report foreign financial assets and income, this form plays a crucial role. Individuals who need to certify their compliance can start by clicking the button below to fill out the form.
The United States Treasury Department and the Internal Revenue Service have made available Form 14653 (October 2017), a crucial document for U.S. persons residing abroad aiming to comply with tax laws through the Streamlined Foreign Offshore Procedures. This form serves as a Certification by U.S. Person Residing Outside of the United States, facilitating the process for individuals to report previously undisclosed income from foreign financial assets and to submit delinquent or amended tax returns. It underscores a participant's commitment to rectify past oversights in income reporting, tax payment, and information return submissions including FBARs (Foreign Bank and Financial Accounts). Form 14653 requires a detailed narrative explaining the reasons for the failure to comply with the tax laws, advocating for transparency and thoroughness in providing both favorable and unfavorable facts. By confirming non-willful conduct i.e., mistakes made without intentional disregard of the law, the form opens the door for eligible expatriates to bring themselves into compliance while potentially avoiding severe penalties. It further outlines the obligations for keeping records and the consequences of wilful misrepresentation. Additionally, the form distinguishes between citizens, lawful permanent residents, and those not meeting the substantial presence test, with specific directions for each to establish their non-residency status, thereby qualifying for the streamlined procedure. This comprehensive approach ensures a fair opportunity for all U.S. persons living abroad to meet their U.S. tax obligations, while the Internal Revenue Service maintains strict guidelines to prevent and penalize fraudulent activities.
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
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)
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.
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)
For Estates Only
Signature of Fiduciary
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
Firm’s name
Firm’s EIN
Firm’s address
PTIN
Check if
Self-Employed
Do you want to allow another person to discuss this form with the IRS
Yes (complete information below)
Designee’s name
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
Filing the Form 14653, Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures, is an important step in ensuring compliance with U.S. tax obligations. This form is designed for U.S. taxpayers living abroad who need to certify that their failure to report income, file certain information returns, and pay taxes was due to non-wilful conduct. Completing this form meticulously is crucial for taking advantage of the streamlined filing procedures, potentially reducing penalties. Here are the steps to fill out the form effectively:
Once you have carefully completed the form, review it to ensure all information is correct and complete. Verify that all attachments mentioned are included before submitting it to the IRS. This attention to detail will help streamline your filing process and ensure you meet the IRS requirements for the streamlined foreign offshore procedures.
What is Form 14653?
Form 14653 is a document used by U.S. persons residing outside of the United States to certify their eligibility for the IRS Streamlined Foreign Offshore Procedures. This form serves as a means to provide the IRS with all necessary information related to delinquent or amended tax returns, including information returns and FBARs for the most recent 3 years where returns were due. It plays a crucial role in assisting taxpayers in rectifying past noncompliance with U.S. tax laws related to foreign income and financial assets. The form requires detailed information about the taxpayer, including their reason(s) for failing to report foreign income, pay taxes, and submit required information returns previously.
Who should file Form 14653?
Any U.S. person (which includes citizens, lawful permanent residents, and those who meet the substantial presence test), who resides outside of the United States and wishes to utilize the IRS Streamlined Foreign Offshore Procedures, should file Form 14653. This applies specifically to those who have neglected to report income from foreign financial assets, pay the appropriate tax, and file required information returns including FBARs due to non-willful conduct. The form is also necessary for individuals seeking to take corrective action for these oversights in a manner that qualifies for the streamlined processing of their prior year obligations.
What information is required to complete Form 14653?
To complete Form 14653, taxpayers need to provide a variety of information. This includes personal details such as name(s), Taxpayer Identification Number(s) (TIN), telephone number, and mailing address. Additionally, the form requires a meticulously drafted statement explaining the specific reasons behind the taxpayer’s failure to report all income, pay the requisite tax, and submit all necessary information returns, including FBARs. It also necessitates detailed information on foreign financial assets, and if applicable, details regarding any reliance on professional advice. Submission of delinquent or amended tax returns for each of the most recent 3 years for which a U.S. tax return was due (or properly extended) and specifying the amount of tax and interest owed for each year, are also required fields on the form.
What happens if I don’t file Form 14653?
Not filing Form 14653 when eligible and required under the Streamlined Foreign Offshore Procedures can have significant consequences. The individual may lose the opportunity to take advantage of the more lenient terms offered by these procedures, specifically designed to encourage compliance with U.S. tax laws. Without this form, taxpayers cannot certify their non-willful conduct, an essential element of the streamlined process, potentially leading to examination or investigation by the IRS. This could result in the imposition of civil fraud penalties, FBAR penalties, information return penalties, or even referral for criminal investigation. Prompt and accurate filing of Form 14653 can help mitigate such risks by rectifying past tax and reporting discrepancies in a manner recognized and facilitated by the IRS.
Filling out the Form 14653 can be daunting, and errors can easily occur if attention to detail is not adhered to. Here are ten common mistakes people make when completing the form:
Addressing these mistakes is crucial to successfully navigating the streamlined foreign offshore procedures and avoiding further scrutiny from the IRS. Paying attention to the detailed requirements and providing a complete, truthful, and well-documented submission will help ensure the process is as smooth as possible.
When individuals living outside the United States need to comply with the IRS through the Streamlined Foreign Offshore Procedures, they complete Form 14653. Alongside this form, several other forms and documents may be required to ensure a thorough and compliant submission. These additional resources help detail financial backgrounds, account specifics, and more, ensuring that the IRS can accurately assess an individual's tax situation.
Form 14653 and its accompanying documents are essential for U.S. persons residing outside the country to navigate their tax obligations correctly. These forms collectively ensure that taxpayers report their income, assets, and transactions comprehensively, minimizing the risk of legal complications with the IRS. Understanding each document’s purpose and correctly filling them out can significantly simplify the compliance process under the Streamlined Foreign Offshore Procedures.
Form 1040 (U.S. Individual Income Tax Return): Similar to Form 14653 in that it is used by taxpayers to report income, calculate and pay tax due to the IRS. Both forms require truthful disclosure of income, albeit for different purposes; Form 14653 specifically deals with correcting past errors related to foreign income.
FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Form 114): Like Form 14653, the FBAR requires disclosure of foreign financial accounts. While FBAR focuses solely on foreign account reporting, Form 14653 includes certification for streamlined filing compliance for taxpayers who neglected this and other reporting obligations.
Form 1120 (U.S. Corporation Income Tax Return): Although primarily for corporations, it's similar to Form 14653 in how it demands comprehensive income disclosure for tax purposes. Both serve the larger goal of tax compliance and accurate reporting, distinguishing personal from corporate obligations.
Form 8938 (Statement of Specified Foreign Financial Assets): This form and Form 14653 share the objective of disclosing foreign assets to the IRS, with 8938 being an attachment to an annual tax return for certain taxpayers with foreign assets, while 14653 is part of the streamlined procedures to rectify past non-disclosure.
Form 3520 (Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts): Similar in its focus on international transactions, Form 3520 complements Form 14653's aim by requiring detailed reporting of transactions with foreign trusts, another potential area of past non-compliance Form 14653 seeks to address.
Form 5471 (Information Return of U.S. Persons With Respect To Certain Foreign Corporations): Both forms concern international financial transparency. Form 5471 involves disclosure by U.S. taxpayers who are officers, directors, or shareholders in certain foreign corporations, aligning with Form 14653’s objective to correct instances of underreporting.
Form 8854 (Initial and Annual Expatriation Statement): Related through its focus on international tax compliance, Form 8854 is used by those renouncing U.S. citizenship or terminating long-term residency. Like Form 14653, it represents a fulfillment of tax obligations, specifically for those severing tax ties with the U.S.
Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund): This form, akin to Form 14653, deals with U.S. taxpayers' foreign investments, requiring disclosure of interests in passive foreign investment companies.
Form 2555 (Foreign Earned Income): Shares similarities with Form 14653 in terms of its target demographic—U.S. taxpayers living abroad. Both aim at compliance with U.S. tax laws, with Form 2555 enabling the exclusion of a portion of foreign earned income.
Filling out Form 14653 requires careful attention to detail. This form serves as a certification by U.S. persons living outside the United States for streamlined foreign offshore procedures. To ensure accuracy and completeness in your submission, consider the following dos and don'ts:
Read the instructions carefully: Before filling out the form, make sure to thoroughly read the instructions to understand the specific requirements and eligibility criteria for the streamlined foreign offshore procedures.
Provide accurate and complete information: Ensure that all the information you provide, including your personal details, income, assets, and reasons for previous non-compliance, is accurate and complete to the best of your knowledge.
Attach all required documents: Attach any necessary documentation, such as evidence of residency outside the United States or explanations for failing the substantial presence test, as required by the form.
Explain your reasons for non-compliance in detail: Use the space provided to fully explain the reasons behind your failure to report all income, pay all required tax, and submit all necessary information returns, including FBARs.
Sign and date the form: Don't forget to sign and date the form before submission. If filing a joint certification, both spouses need to sign.
Skip any sections: Even if a section seems not to apply to you, make sure to review and respond to every part of the form. Leaving sections blank can result in your submission being considered incomplete.
Ignore the non-residency requirements: If you are filing under the streamlined foreign offshore procedures, you must meet the non-residency requirements. Ensure you correctly document your days outside the U.S. or your failure to meet the substantial presence test, as applicable.
Underestimate the narrative statement: The narrative statement of facts is a key component of your submission. Not providing a detailed narrative or omitting significant facts can adversely impact your filing.
Forget to review before submitting: Always review your form for any errors or omissions before submitting. A second look can catch mistakes that may otherwise lead to delays or issues with your submission.
Wait until the last minute: Procrastinating on this important task can lead to rushed submissions and mistakes. Give yourself plenty of time to gather the necessary information, fill out the form thoroughly, and double-check your work.
Understanding tax forms and procedures can sometimes feel like navigating a complex maze. Among these, Form 14653, the Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures, is particularly nuanced. Let's debunk some common misconceptions about this form to ensure clarity and compliance.
This is not accurate. Form 14653 is specifically designed for U.S. persons (including individuals and estates) residing outside the United States who need to certify that their failure to report income, pay taxes, and file Foreign Bank and Financial Accounts Report (FBARs) was non-willful. Taxpayers with different circumstances, especially those residing within the U.S., may require different forms and procedures.
Actually, one of the primary purposes of Form 14653 is to apply for the Streamlined Foreign Offshore Procedures, which are designed to provide eligible taxpayers with a way to rectify their tax reporting and payment obligations with reduced or no penalties for non-willful compliance errors. Proper submission demonstrates the taxpayer's intention to comply and can significantly mitigate potential penalties.
This is a misconception. While it is true that each spouse must meet the non-residency requirement individually, Form 14653 allows for joint certification. The form accommodates different reasons for non-compliance by allowing each spouse to separately state their individual reasons within the same form. Therefore, married taxpayers can submit a joint certification, but must clearly articulate their individual circumstances if they differ.
Form 14653 specifically requires taxpayers to provide delinquent or amended income tax returns for only the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed. The misunderstanding might stem from a confusion with the FBAR requirement within the same form, which calls for filing delinquent FBARs for the last six years if necessary. This distinction is crucial for compliance without overextending the taxpayer's obligations.
Clear understanding and proper completion of Form 14653 are essential steps for U.S. persons residing abroad to rectify past non-compliance with reduced fear of punitive consequences. Always ensure that your submission is accurate, complete, and in line with the IRS guidelines for the Streamlined Foreign Offshore Procedures.
Filling out and using Form 14653 is critical for U.S. persons residing outside the United States who are seeking to utilize the Streamlined Foreign Offshore Procedures. Here are nine key takeaways to guide taxpayers through this process:
Understanding and correctly filling out Form 14653 is a vital step for U.S. persons residing outside the United States to become compliant with U.S. tax laws concerning foreign assets and financial accounts. Taxpayers are encouraged to seek professional advice if they have any doubts or questions regarding their eligibility or the process itself.
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