If you filed US returns but left out UK income, Streamlined works through amended returns. You file a Form 1040-X (opens the official IRS page in a new tab) for each of the most recent three years whose due date has passed, attach the information returns that were missed, mark each with the route name in red, and post the package to the dedicated address with the tax and interest. Late FBARs for six years go separately to FinCEN. Only the Foreign route of the streamlined filing compliance procedures (opens the official IRS page in a new tab) carries no miscellaneous offshore penalty.
This post is for US citizens and green card holders who did file, often with salary and UK tax shown correctly, but missed bank interest, fund income, a pension or the forms that go with them. It goes further than our guide for people behind on US taxes in the UK on one question: how amended returns are prepared and submitted under each route, and what each route charges.
How Streamlined treats returns you have already filed
A return already filed is amended, not filed again. For each of the most recent three years for which the due date, or properly applied-for extended due date, has passed, the IRS asks for a Form 1040-X where an original return exists. Both routes use the same rule, but they differ on years that were never filed.
On the Streamlined Foreign Offshore Procedures (opens the official IRS page in a new tab), a mixed history is allowed. A year with an original return gets a Form 1040-X, and a year with none gets a late, complete Form 1040. The page for US taxpayers residing in the United States (opens the official IRS page in a new tab) is stricter: the Domestic route requires that a return was filed, where one was required, for each of the covered years, and it cannot be used to file delinquent original returns.
Which route applies turns on the non-residency test, which our post on proving the non-residency test explains. Someone living in the UK in at least one covered year, with no US abode and enough days outside the US, normally looks at the Foreign route. Someone who has since moved to the US, and fails the test in every year, looks at the Domestic route, provided all three returns were filed.
- Return filed for a covered year: amend it on Form 1040-X
- No return filed, Foreign route: submit a complete late Form 1040
- No return filed, Domestic route: that route is not available
- Both routes: the same covered years and the same FBAR window
What goes into each Streamlined amended return
The corrected figures and every information return that was missed. Each Form 1040-X reports the omitted UK income for that year, with the information returns attached even where they would normally be filed separately, such as Forms 3520, 5471 and 8938. Both IRS pages stress that the route name in red is critical to how the package is processed.
The annotation is precise. On the Foreign route, Streamlined Foreign Offshore is written in red at the top of the first page of each amended return and each information return. On the Domestic route the words are Streamlined Domestic Offshore, in the same place. A package without the marking risks being processed as an ordinary amendment, outside the procedure.
Each route has its own certification. The Foreign route uses Form 14653 and the Domestic route Form 14654. The original, signed certification goes in the package, and a copy is attached to each tax return and information return, but not to the FBARs. The IRS says that a missing or incomplete certification means the returns are processed in the normal way, without the procedure's benefits.
Where the amended returns are sent and how tax is paid
On paper, to a dedicated address in Austin, Texas, with the payment. Each route has its own attention line, and both IRS pages say electronic submissions of these returns are not accepted. The address is for the procedure only, so later years and unrelated filings go through the normal channels.
Payment covers all tax shown on the amended returns, plus statutory interest on each late amount. The IRS asks for the taxpayer identification number on the cheque. If the tax or interest is miscalculated, a balance due notice or a refund may follow, so the interest is worth computing carefully for each year. Our post on paying a Streamlined tax balance from a UK bank covers the practical side.
An amendment made outside the procedure goes through the normal channels, as our post on amending a US return from the UK describes. That route does not carry over. A Streamlined amendment sent electronically, or to the usual processing centre, misses the special handling the procedure depends on, and the IRS describes the dedicated address as reserved for these submissions.
How late FBARs fit alongside the amended returns
They are filed separately, electronically, with FinCEN. Both routes ask for any delinquent FBARs for the most recent six years for which the FBAR due date has passed. They go through the BSA E-Filing System, not in the paper package and not with the tax return.
On the electronic cover page, the reason for late filing is given as Other, and the explanation box reads Streamlined Filing Compliance Procedures. Someone unable to file electronically is told to contact FinCEN about alternatives. The FBAR (opens the official IRS page in a new tab) is needed for each year in which the combined value of foreign accounts exceeded $10,000 at any time, counting accounts you could sign on as well as those you owned.
People who filed returns but missed UK income often missed the FBAR too, since both depend on knowing the accounts are reportable. The FBAR window is longer than the return window, so it can reach accounts that closed before the first amended year. Our FBAR filing work prepares each year from the account records, and our foreign income and FBAR service keeps later years in order.
What the Domestic route charges on amended returns
A miscellaneous offshore penalty of 5%, paid with the amended returns. It is charged on the highest aggregate balance or value of the covered foreign financial assets, found by adding the year-end values for each year in the covered tax return period and the covered FBAR period and taking the highest year.
The covered assets include those that should have appeared on an FBAR or Form 8938 but did not. They also include assets that were reported but whose income was left off the return for a year. That second limb matters to people who filed an FBAR faithfully but missed the interest, as our post on the Streamlined Domestic penalty base explains in detail.
In return, a taxpayer who qualifies and follows the instructions is not subject to accuracy-related, information return or FBAR penalties for the covered years. The Foreign route goes further: it carries no miscellaneous offshore penalty, and the IRS says failure-to-file and failure-to-pay penalties do not apply either. On both routes, penalties already assessed are not abated, returns can still be selected for audit, and fraud or a wilful FBAR violation removes the protection.
- Foreign route: no miscellaneous offshore penalty
- Domestic route: 5% of the highest aggregate year-end value
- Both routes: penalties already assessed stay in place
- Both routes: returns can still be selected for audit
How amended returns might look for a US citizen in Glasgow
Take a US citizen employed as a solicitor in Glasgow who has filed a US return every year. Her salary and UK tax were reported, with a foreign tax credit. She left out interest on a UK savings account and the income from funds held in a stocks and shares ISA, and never filed an FBAR.
She has lived in Scotland throughout, so she meets the non-residency test and the Foreign route applies. Her package has a Form 1040-X for each covered year adding the interest and fund income, any information returns those years need, including Form 8621 (opens the official IRS page in a new tab) for funds that are PFICs, each marked Streamlined Foreign Offshore in red, and a signed Form 14653 with copies attached. Funds inside an ISA are commonly PFICs, as our post on why a stocks and shares ISA worries the IRS explains.
Her FBARs go to FinCEN electronically, with the Streamlined explanation on the cover page. Had she moved to Boston three years ago and failed the non-residency test in every covered year, the same amended returns would go in under the Domestic route instead, marked Streamlined Domestic Offshore, with Form 14654 and the miscellaneous offshore penalty on her UK accounts.
Points to settle before signing the certification
Three points come up often with amended returns. Form 14653 includes an acknowledgement that amended returns may report income for years beyond the normal assessment period, and that seeking a refund of tax or interest paid on the omitted income, on the ground that it was paid too late to be assessed, forfeits the favourable terms of the procedure.
Second, the Foreign route page notes that amended returns involving specified foreign corporations must also deal with the section 965 transition tax where it applies. That matters to people who own part of a UK company, and is a point to review before the returns are finalised. Third, the narrative of non-wilful conduct has to fit the history: a return filed with a foreign tax credit shows awareness of US filing, so the narrative needs to explain why the UK accounts were missed.
The answer depends on the facts of each year, and the amended returns, FBARs and certification have to tell the same story. Our IRS streamlined filing service prepares the package from the original returns, and our individual tax returns work keeps later years complete. Our guide to IRS streamlined filing from the UK sets out the full sequence, and you can contact US UK Tax Returns to have your filed returns reviewed.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
