Form 14653 is the certification that goes with a Streamlined Foreign Offshore submission, and its central part is a narrative of specific facts explaining why returns and FBARs were not filed. The IRS asks for the whole story, favourable and unfavourable. A submission without a narrative is treated as incomplete and does not qualify for the terms of the Streamlined Foreign Offshore Procedures (opens the official IRS page in a new tab).
This post is for Americans in the UK who have decided the Foreign route fits and now face the blank box. It goes deeper than the certification section of our guide for people who are behind on US taxes in the UK: what the form asks you to certify, what the narrative must cover, how to deal with awkward facts, how couples and advisers are handled, and what happens if the statement falls short.
What is Form 14653 and what do you certify on it?
Form 14653 is the certification by a US person residing outside the United States. On it you confirm that you meet the non-residency test, that the required FBARs have been filed, and that your failures were non-wilful, and you sign under penalty of perjury. It belongs to the Foreign route only.
The form covers the most recent three years of returns and six years of FBARs. For a US citizen or green card holder, the non-residency section asks, year by year, whether you were physically outside the United States for at least 330 full days and had no US abode, and at least one of the years must qualify. The form points to Publication 54 (opens the official IRS page in a new tab) for the meaning of abode. Where spouses file a joint certification, both must meet the test, and any difference in their day counts is disclosed.
The signed statement also records undertakings that are easy to overlook. You agree to keep the records behind the returns and the accounts for a set period and to produce them on request. You acknowledge that if the IRS receives or discovers evidence of wilfulness, fraud or criminal conduct, it may open an examination or investigation. The original certification goes with the submission and a copy is attached to each return, though not to the FBARs, which are filed separately with FinCEN on Form 114.
- The years covered, with the tax and interest due for each
- A yes or no answer on the non-residency test for each year
- The certification that the conduct was non-wilful
- The narrative statement of facts, on the form or a signed attachment
What does the IRS mean by non-wilful conduct?
The form defines it. Non-wilful conduct is conduct due to negligence, inadvertence or mistake, or conduct that results from a good faith misunderstanding of the requirements of the law. The same definition appears on the IRS page for the streamlined filing compliance procedures (opens the official IRS page in a new tab), and you sign to say your case falls within it.
The definition is generous to people who simply did not know. Many accidental Americans, and many who left the United States as children, never had a reason to think a country they did not live in expected a tax return from them. Carelessness is covered too. Negligence is within the definition, so a person who ought to have checked and did not is still on the non-wilful side of the line.
What falls outside is knowing of the duty and choosing not to meet it and, as the courts have applied the term in FBAR cases, shutting your eyes to a duty you suspected. The certification is therefore a statement about what you knew and when, tested against what you did. If the facts do not support it, the streamlined routes are the wrong tool, and the IRS guidance points instead to its voluntary disclosure practice (opens the official IRS page in a new tab). Our IRS streamlined filing service begins with that assessment.
What has to go into the narrative statement of facts?
The form asks for specific reasons for the failure to report income, pay tax and file information returns, including FBARs. It tells you to include your personal and financial background, the source of the money in each foreign account, and your contact with those accounts. Favourable and unfavourable facts both belong in it.
Personal background means where you were born, when you left the United States, how you came to hold citizenship or a green card, your education and your work. Financial background means how your affairs were run: who prepared your UK returns, whether UK tax was paid on the same income, and whether anyone ever raised the US position. For a UK resident, most accounts have an ordinary explanation, such as a salary account, an employer's pension or a house deposit, and the narrative should say so plainly.
The form then asks about each account or asset: whether it was inherited, opened while living abroad or opened for a business reason, and what you did with it, including deposits, withdrawals and investment decisions. A reader at the IRS should be able to follow the money without guessing. The accounts named in the narrative must match those on the FBARs and on Form 8938.
- Where you were born and when you left the United States
- US passports held, visits made and any US accounts or income
- Who prepared your UK tax returns and what they were told
- How each account was funded and how you used it
- When and how you learned of the US filing duty
- What you did in the weeks and months after learning of it
How do you deal with facts that do not help you?
You include them and explain them. The form asks in terms for unfavourable facts, and a narrative that leaves one out is weaker than one that states it and gives the context. The statement is signed under penalty of perjury, so an omission that changes the picture is a risk in itself.
Take a dual citizen living in Leeds who received a letter from her bank some years ago asking whether she was a US person, completed the form, and did nothing further. That letter is in the bank's records. A narrative saying she first learned of her obligations this year would be contradicted by a document. A narrative that describes the letter, what she understood it to mean, why she did not connect it with a filing duty, and what finally prompted her to act is truthful, and it can still describe non-wilful conduct. Our post on what a FATCA letter from a UK bank means explains what those letters ask.
The same applies to an old US return filed and then abandoned, a US passport renewed during the years in question, or an adviser's passing remark. None of these decides the question alone. Each needs a date, what was understood at the time, and what was done about it. Delay after learning of the duty is the hardest fact to explain, which is a reason to act promptly once you know.
What about advisers and married couples?
If you relied on a professional adviser, the form asks for the adviser's name, address and telephone number and a summary of the advice. Married taxpayers who file a joint certification and have different reasons must set out each spouse's reasons separately in the statement of facts.
Reliance on an adviser is a common and legitimate part of the story for UK residents, because a UK accountant preparing a Self Assessment return is not usually asked about US obligations. The narrative should say what the adviser was engaged to do and what they were told about your citizenship. It should not overstate the advice. Saying an accountant confirmed nothing was due in the United States, when the subject never came up, is a different statement from saying nobody mentioned it.
A joint certification arises where both spouses are making the submission together. A spouse who is not a US person, and is not joining in the returns, has nothing to certify. Where one spouse handled the family finances and the other did not, their knowledge differs and the narrative should say so. The position of a US citizen married to a non-US spouse is covered in our post on choosing a filing status.
What happens if the statement is incomplete?
A submission with no narrative is treated as incomplete and does not qualify for the streamlined penalty relief. The IRS guidance for the Foreign route says that an incomplete or deficient certification will result in the returns being processed in the normal way, without the terms of the procedure.
There is no approval step. The IRS does not acknowledge receipt, and the process does not end in a closing agreement. Returns submitted this way can be selected for audit under the ordinary selection processes, and the certification can be checked against other information the IRS holds. A narrative therefore has to stand up later, on its own, when the person who wrote it may not be asked to explain it.
The package goes to the IRS on paper, with the tax and interest due, the returns marked as the procedure requires, and every required information return attached, such as Form 8621 for funds held in an ISA. Under the Foreign route, a person who qualifies and complies is not charged the penalties that would otherwise apply. The Domestic route (opens the official IRS page in a new tab) has its own certification, Form 14654, and carries a 5% miscellaneous offshore penalty. For the order of the whole process, return to our guide for people who are behind on US taxes in the UK, or use the contact page to ask us to review a draft.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
