US and UK Tax Returns for Americans in the UK

Do I have to file US taxes if I live in the UK?

Yes, in most cases. The United States taxes its citizens and green card holders on worldwide income wherever they live, so a US person resident in the UK files Form 1040 each year once gross income passes the threshold for their filing status. UK tax paid reduces the US bill, not the duty to file.

The US taxes by citizenship as well as by residence. The IRS guidance for US citizens and resident aliens abroad (opens the official IRS page in a new tab) says the filing rules are generally the same whether you live in the US or overseas. A salary from a London employer, interest on a UK savings account and rent from a flat in Leeds all belong on Form 1040, converted to dollars. Our individual tax returns service exists because of that rule.

The third row catches more Americans in the UK than any other. A US citizen married to a British spouse who is not a US person cannot simply file a joint return, and is generally treated as married filing separately. That status has a gross income threshold of $5, set out in Publication 54 (opens the official IRS page in a new tab), so almost any income creates a filing obligation. The thresholds test gross income before the foreign earned income exclusion, so a salary that ends up fully excluded or credited still has to be reported.

Green card holders and other non-citizens

A green card holder is a US tax resident until the status is formally given up or is found by the immigration authorities or a court to have been abandoned. Moving to the UK and letting the card lapse in a drawer does not end the filing obligation. A treaty claim to be treated as a UK resident is possible, but it must be disclosed and can have lasting consequences for a long-term holder.

British nationals and other non-US people become US tax residents only by meeting the substantial presence test, which counts days in the US over three years, with carve-outs for transit days and exempt individuals. A non-resident with US-source income, such as rent from a US property, files Form 1040-NR on that income alone.

Do US citizens in the UK need to file a Self Assessment tax return?

Not always. A UK resident whose only income is a salary taxed in full under PAYE usually has no Self Assessment return to file. A return is generally needed once there is income HMRC has not taxed at source, such as self-employment profits, rent, US dividends, taxable capital gains, or a residence or treaty claim.

PAYE is designed to collect the right UK tax from employment without a return. An American who arrives on a work visa and earns only a UK salary may never hear from HMRC beyond a tax code notice. The position changes quickly, because most Americans keep something in the US: a brokerage account, a savings account, a former home that is now let. UK residents are taxed on worldwide income, and HMRC's tool to check if you need to send a Self Assessment tax return (opens the official GOV.UK page in a new tab) is the starting point.

• Self-employment above the small trading allowance, or membership of a partnership
• Rental income from property in the UK or the US
• US dividends, interest or fund distributions paid without UK tax deducted
• Capital gains on which UK tax is due, including gains on US shares
• Distributions from a US pension or retirement account
• A claim under the foreign income and gains regime, split-year treatment or the treaty
• Any year for which HMRC has issued a notice to file

The return is the SA100, with supplementary pages added as needed. Foreign income and the UK credit for US tax go on the SA106 foreign pages (opens the official HMRC page in a new tab). Residence, split-year treatment and treaty claims go on SA109, and the SA109 pages (opens the official HMRC page in a new tab) cannot be filed through HMRC's own free online service, so they need commercial software or paper. First-time filers must register by 5 October after the end of the tax year. Our UK Self Assessment service covers the return and its pages.

Worked example: a PAYE employee with a US brokerage account

Take a US citizen employed in London on a UK salary taxed through PAYE, who also holds a US brokerage account that pays dividends. The salary alone would not need a UK return. The dividends do, once they exceed the UK dividend allowance, because no UK tax has been taken from them. The UK return reports them on the foreign pages and claims credit for US tax up to the treaty rate. The US return reports salary and dividends together and claims credit for the UK tax. One brokerage statement feeds both returns.

When are US and UK tax returns due for Americans in the UK?

The US return for a calendar year is due on 15 April, moved automatically to 15 June for filers living abroad and to 15 October with Form 4868. The UK return for the tax year ended 5 April is due by 31 October on paper or 31 January online, when the balance of UK tax is also payable.

The two systems run on different clocks. The US tax year is the calendar year. The UK tax year runs from 6 April to 5 April. A US return for one calendar year therefore draws on the last quarter of one UK tax year and the first three quarters of the next, and eight dates matter.

The US dates extend the time to file, not the time to pay. The IRS page on the automatic two-month extension (opens the official IRS page in a new tab) confirms that interest runs from 15 April on any unpaid balance. Form 4868 must be filed by the earlier due date to reach 15 October. The 15 December date is discretionary and is requested by letter to the IRS before 15 October, explaining why more time is needed.

The UK dates are fixed by the Self Assessment deadlines (opens the official GOV.UK page in a new tab). An online return filed after 31 January attracts an initial penalty of £100 even if no tax is owed, and the penalties (opens the official GOV.UK page in a new tab) grow with delay. Payments on account are advance instalments towards the next bill, each normally half of the previous year's liability, where much of the tax is not collected at source.

Which tax return should I prepare first, the US or the UK?

For most Americans resident in the UK, the UK figures come first. The UK has the first right to tax a UK salary, UK rent and most other income of its residents, and the US return then claims a foreign tax credit for the UK tax. US-source income works the other way round.

Order matters because each return borrows a number from the other. The US foreign tax credit on Form 1116 needs the UK tax attributable to each category of income. The UK foreign tax credit needs the US tax on US-source income, limited to what the treaty allows the US to charge a UK resident. If either figure is a guess, the credit is a guess.

1. 01

   Assemble one set of records

   Collect payslips, statements and property records once, covering the calendar year and both UK tax years that overlap it.

2. 02

   Fix residence and filing status

   Confirm UK residence, US filing status and any treaty position or special regime being claimed.

3. 03

   Compute the UK liability

   Prepare the UK computation for the year ended 5 April, with a provisional credit for US tax on US-source income.

4. 04

   Re-cut to the calendar year and convert

   Split UK income and UK tax between the calendar years they fall into, then convert to dollars using one documented method.

5. 05

   Prepare Form 1040

   Sort income into the credit categories, compare the credit with the exclusion on the actual numbers, and track carryovers.

6. 06

   Finalise the UK return

   Replace the provisional UK credit with the final US tax on US-source income, then file and pay.

7. 07

   File the account reports

   Complete the FBAR, Form 8938 and the UK foreign pages from the same list of accounts.

Credit timing: paid or accrued

Publication 514 (opens the official IRS page in a new tab) lets an individual claim foreign tax in the year it is paid or, by election, in the year it accrues. UK tax accrues at the end of the UK tax year. The accrual election binds later years, so it is made once and deliberately. Unused credits carry back one year and forward ten.

Consider a US citizen who becomes self-employed in the UK partway through a year. Tax deducted under PAYE is paid in the same calendar year as the income, so an employee rarely has a timing problem. A sole trader pays UK tax on the following 31 January or later. On the paid basis, the credit can land two calendar years after the income was earned, beyond the reach of a one-year carryback, leaving US tax due with no credit to meet it. The accrual election usually closes that gap.

What income goes on the US return and what goes on the UK return?

Both, in most cases. A US citizen resident in the UK reports worldwide income to each country: wages, self-employment profits, rent, dividends, interest, capital gains and pension income. The returns differ in how they measure the income, which tax year it falls in, and which country gives credit for the other's tax.

Self-employment and the totalization agreement

US self-employment tax is charged at 15.3% and is not reduced by the foreign tax credit or the exclusion. The totalization agreement with the United Kingdom (opens the official SSA page in a new tab) prevents a double social security charge. A self-employed person who lives in the UK is generally covered by the UK system alone, pays UK National Insurance, and obtains a certificate of coverage from HMRC to support the exemption on the US return.

Rent and capital gains

Rental profit is rarely the same figure twice. HMRC's rules on working out rental income (opens the official HMRC page in a new tab) restrict relief for residential mortgage interest to a basic rate tax reduction, while the US allows the interest as an expense and requires depreciation of the building. A property can show a UK profit and a US loss in the same year, which limits how much UK tax is usable as a credit. Our guide to US and UK income taxes compared sets the rate structures side by side.

Capital gains are measured in dollars on the US return, using the exchange rate on the purchase date and on the sale date. A sterling asset sold for what it cost can still show a US gain if the pound has strengthened. The clearest case is the family home. UK private residence relief is not mirrored in the US, which has its own exclusion for the sale of a main home (opens the official IRS page in a new tab) with its own tests and ceiling.

Will I be taxed twice on the same income by the US and the UK?

Usually not in full. Foreign tax credits in each country and the US-UK income tax treaty remove most double taxation for an American resident in the UK. In the UK, where rates are generally higher than US rates, the foreign tax credit often gives a better result than the foreign earned income exclusion.

There are two main ways to stop a UK salary being taxed twice. The foreign earned income exclusion (opens the official IRS page in a new tab), claimed on Form 2555, removes earnings from the US return up to an annual cap. The foreign tax credit (opens the official IRS page in a new tab) leaves the income on the return and sets UK tax against the US tax on it. They cannot both apply to the same income.

Worked example: a higher rate employee

Take a US citizen employed in London on a salary taxed partly at the UK higher rate. With the exclusion, earnings up to $130,000 leave the US return for tax year 2025 and the UK tax on them is wasted. With the credit, the UK income tax generally exceeds the US tax on the same earnings, the US liability on the salary falls to nil, and the surplus becomes a carryover. A lower earner, or someone in the first months of a UK posting who has paid little UK tax, may find the exclusion cleaner.

What the treaty does and does not do

The US-UK tax treaty (opens the official IRS page in a new tab) contains a saving clause, which lets the US tax its citizens as if the treaty did not exist, subject to listed exceptions. The exceptions include the relief from double taxation article, parts of the pension articles and the rule on social security benefits. Portfolio dividends are generally limited to 15% in the source country. A position that overrides the Internal Revenue Code is disclosed on Form 8833 (opens the official IRS page in a new tab), and our treaty relief work covers the claim.

• Income the UK exempts but the US taxes, such as income and gains inside an ISA
• UK funds treated by the US as passive foreign investment companies
• Gains that exist only in dollars because of currency movement
• UK tax paid in a later US year than the income it relates to
• The net investment income tax (opens the official IRS page in a new tab) of 3.8%, which is generally not creditable under domestic law, and treaty-based claims are contested

Those are the gaps where US tax is actually paid. Our article on choosing between the foreign tax credit and the exclusion in the UK works through the first decision. Our guide to US-UK double taxation covers the credit categories, the three-stage calculation for US-source income and the treaty articles in depth, and the cross-border tax service applies them to both returns.

How does the IRS treat ISAs, UK pensions and Premium Bonds?

The IRS does not recognise most UK tax wrappers. Income and gains inside an ISA are taxable on the US return each year, Premium Bond prizes are taxable, and UK funds are commonly treated as passive foreign investment companies. UK pensions differ: growth inside the scheme is generally protected by the treaty, with narrower relief for contributions.

UK savings products are built around UK tax rules. An Individual Savings Account (opens the official GOV.UK page in a new tab) is free of UK income tax and capital gains tax, and nothing in US law or the treaty extends that treatment to the US return. The table gives the usual position.

Funds inside an ISA

A UK unit trust, OEIC, investment trust or UK-domiciled exchange traded fund is commonly a passive foreign investment company in US terms. Each can need its own Form 8621 (opens the official IRS page in a new tab), and the default treatment is punitive unless an election is available and made. Form 8621 carries no standalone monetary penalty, but leaving it out keeps the statute of limitations open for the whole return.

Individual shares in trading companies are usually not PFICs, although a foreign company that is mostly passive can be one. Reporting may not be required where total PFIC holdings stay below $25,000, or $50,000 on a joint return, with no distributions or disposals. Our article on why a stocks and shares ISA worries the IRS explains the mechanics, and PFIC reporting is a service in its own right.

Pensions

Pensions are where the treaty gives a US citizen real protection. Growth inside a UK pension scheme is generally not taxed by the US until it is paid out. Relief for contributions is a separate and narrower rule: it applies only where the treaty's conditions are met, is measured against US limits, and operates within the saving clause and its exceptions. Distributions, and the tax-free lump sum in particular, need a position taken before money is drawn. Our US-UK pensions service deals with each stage.

Do I need to report my UK bank accounts to the US?

Yes, once the combined maximum value of all your non-US accounts exceeds $10,000 at any time in the year. The report is the FBAR, filed electronically with FinCEN and not with the tax return. A second form, Form 8938, goes with the return when foreign financial assets pass much higher thresholds.

Account reporting is separate from income tax. No tax is charged on an FBAR, and an account that earned nothing still has to be listed. The requirement reaches current accounts, savings accounts, ISAs, most pensions, Premium Bonds and investment accounts. It also reaches accounts the filer does not own but can operate, such as an employer's account. A pension and Premium Bonds count towards the aggregate even though neither feels like a bank account. Our foreign income and FBAR service prepares the reports from the account list used for the returns.

The FBAR threshold is an aggregate. Three accounts that each peak well below $10,000 are all reportable if their highest balances together exceed it, and a joint account with a non-US spouse is reported at its full value. FinCEN's page on reporting foreign bank and financial accounts (opens the official FinCEN page in a new tab) sets out the rule, and the IRS publishes a comparison of Form 8938 and FBAR requirements (opens the official IRS page in a new tab). Filing one does not satisfy the other. Our form guides to the FBAR and Form 8938 cover each.

UK banks and investment platforms identify US customers and report their accounts under FATCA, which is why a UK bank asks about US citizenship or a US place of birth when an account is opened. The information goes to HMRC and on to the IRS, so an American who has not filed should assume the accounts are already visible. Which accounts count, how to find maximum balances and what to do about missed years are covered in our guide to FBAR and FATCA for UK accounts.

How do I file US taxes if I am married to a British spouse?

A US citizen married to a spouse who is not a US person usually files as married filing separately and reports only their own income. The alternatives are an election to file jointly, which brings the spouse's worldwide income into US tax, or head of household status with a qualifying child.

Family circumstances change a US return more than most people expect, and the choices are made on the return itself. Most households we see in our individuals and families work are mixed: one American, one British spouse, and children who may or may not be US citizens.

• Married filing separately. The non-US spouse stays outside the US system. The rate bands are the least generous, some credits are restricted, and the filing threshold is very low.
• Electing to file jointly. The couple attach a statement treating the non-US spouse as a US resident. The joint standard deduction applies, but the spouse's worldwide income becomes taxable in the US and the spouse needs an individual taxpayer identification number (opens the official IRS page in a new tab). Once ended, the election cannot be made again.
• Head of household. A US citizen married to a non-resident spouse can be treated as unmarried for this purpose if they pay more than half the cost of a home for a qualifying child. The spouse alone does not qualify them.

The joint election suits a couple where the non-US spouse has little income, and suits poorly where that spouse has substantial earnings, UK funds or a business. Accounts matter as well as income. Transfers between spouses, which are unlimited between two US citizens, are capped where the recipient is not a citizen: the annual exclusion for gifts (opens the official IRS page in a new tab) to a non-citizen spouse is $190,000 for 2025.

Children

A child born in the UK to a US citizen parent may be a US citizen from birth, depending on how long that parent lived in the US beforehand. A citizen child has their own filing obligations once income or accounts pass the thresholds. A Junior ISA in a US citizen child's name is treated like an adult's: taxable income, possible PFICs, and an FBAR in the child's own name where the aggregate is exceeded.

The child tax credit can be claimed from abroad for a child who has a US Social Security number and meets the dependency tests. Part of the credit is refundable, so some families receive a payment even where no US tax is due. That refundable part is not available to a parent who claims the foreign earned income exclusion. Income limits apply.

Do I still owe US state tax after moving to the UK?

Possibly. State tax turns on domicile and residence under each state's own law, not on federal rules, and leaving the country does not end state residence by itself. Some states treat a former resident as still domiciled there until a new permanent home is clearly established, and most continue to tax income arising within the state.

Each state with an income tax defines for itself who is a resident. Some states have no tax on wages at all. Others apply a domicile test that looks at intention as well as presence: where the person regards as their permanent home and whether they mean to return. An assignment described as temporary, a house kept available and a driving licence left in place all point to continuing domicile in the old state.

Some states, notably California, New York, Virginia, South Carolina and New Mexico, are known for being slow to release former residents. In a domicile dispute it is commonly for the taxpayer to show that the old domicile was given up and a new one acquired. The year of departure usually needs a part-year resident return, which is the natural place to draw the line. Our form guide to US state tax returns covers the return types.

• File a part-year return for the year of the move and state the date residence ended
• Sell the former home or let it on a long lease, so it is not kept available for use
• Move voter registration, driving licence and professional registrations where possible
• Change the address on bank, brokerage and pension accounts
• Keep evidence of the UK home: tenancy or purchase documents, council tax, school places

Why state tax is harder to relieve

States are not parties to the US-UK treaty, and many do not follow the federal reliefs. Some do not recognise the foreign earned income exclusion. Many give no credit for tax paid to a foreign country. A person who remains a state resident while living in London can therefore pay UK tax and state tax on the same salary with nothing linking the two.

Even after residence ends, state-source income remains taxable by the state: rent from a property there, a share of a business operating there, and in some states deferred pay or equity earned while resident. A non-resident return reports that income alone. Our multi-state tax filing service prepares state returns alongside the federal one, so the allocation of income is the same throughout.

How is UK tax residence decided for Americans moving to Britain?

UK residence is decided by the Statutory Residence Test, which weighs days in the UK together with home, work and family ties. It is not a simple day count. An American who becomes resident after ten tax years of non-residence can claim relief on foreign income and gains for the first four tax years.

HMRC's Statutory Residence Test (opens the official HMRC page in a new tab) has three parts, applied in order. The automatic overseas tests can make someone conclusively non-resident. The automatic UK tests can make them conclusively resident, for example through time spent here, having their only home here, or working full-time here. If neither gives an answer, the sufficient ties test counts connections such as family, accommodation and work, and sets a day limit that falls as the ties increase.

The UK test and the US substantial presence test are different tests and can give different answers for the same person. In the year of arrival or departure, split-year treatment may divide the UK tax year into a resident part and a non-resident part. It applies only in specific cases and is claimed on the residence pages of the return.

The four-year foreign income and gains regime

The remittance basis was abolished from 6 April 2025. In its place, the rules for people who are new to the UK (opens the official GOV.UK page in a new tab) allow someone who was not UK resident in any of the previous ten tax years to claim relief on foreign income and gains for their first four tax years of residence. The claim is made on the return, the income still has to be quantified, and claiming costs the personal allowance of £12,570 for 2025/26 and the capital gains annual exempt amount.

Inheritance tax has moved the same way. From 6 April 2025 it depends on long-term residence: a person who has been UK resident for ten of the previous twenty tax years is within UK inheritance tax (opens the official GOV.UK page in a new tab) on worldwide assets. Our article on what changed for Americans in Britain after non-dom covers the transition. Arrival is the best moment for tax planning, because several choices are available only in the first years.

What changes if I own a UK company or receive shares from my employer?

Two things. A US citizen who owns a substantial share of a UK company must file detailed US information returns about the company, and its profits can be taxed in the US before they are paid out. Equity pay is taxed by each country according to where the holder worked while the award vested.

Most of this guide concerns personal income. Business owners and senior employees carry a further layer, which our guide for founders, fund managers and executives covers in depth. What follows is the outline every American in the UK should recognise, because the obligations arise from ordinary steps such as incorporating a consultancy.

A UK limited company owned by a US person

An American contractor who trades through a UK limited company has created a foreign corporation in US terms. Where US shareholders control it, the company is a controlled foreign corporation, and the owner files Form 5471 (opens the official IRS page in a new tab) with the personal return each year, reporting the company's accounts under US principles. The initial penalty for failing to file is $10,000 per form per year, whether or not any US tax is due.

The US also taxes certain company profits to the shareholder as they arise. The regime for net CFC tested income was amended by 2025 legislation, with effect for tax years beginning after 31 December 2025, so advice given under the earlier rules needs revisiting. A section 962 election and the high-tax exception are options to review with the company's figures in hand. A sole trader faces none of this, so the US cost of incorporating should be weighed before the UK saving is taken.

Restricted stock units and options

Employees of US-headquartered groups often arrive in the UK with unvested awards. Both countries generally tax restricted stock units when they vest, and both apportion the income by reference to where the work was done between grant and vesting. An award granted in the US and vesting after a move to London is therefore partly US-source and partly UK-source.

The UK rules on employee share schemes (opens the official GOV.UK page in a new tab) include tax-advantaged plans that the US does not recognise, so a benefit that is tax-free in the UK can still be taxable pay on Form 1040. The later sale is a capital gain in both countries, measured in different currencies. A single record of grant, vest and sale dates, with the exchange rate on each, is the most useful thing an employee with equity can keep.

Why have US and UK tax returns prepared together by one firm?

Because each return depends on figures from the other. When US and UK tax returns are prepared together from one file, income is recognised consistently, one exchange rate method is used throughout, foreign tax credits are timed deliberately, and treaty positions are disclosed the same way to the IRS and to HMRC.

Many Americans in the UK use one adviser for the US return and another for the UK return. Each may do sound work and the combined result can still be wrong, because neither sees the whole position. Having US UK tax returns prepared by a single firm, under one roof, changes the mechanics of the work.

Currency and consistency

The US return is prepared in dollars and the UK return in pounds, so every figure that crosses between them is converted. The IRS has no single official rate. Its page on foreign currency and currency exchange rates (opens the official IRS page in a new tab) accepts any posted rate that is used consistently, and it publishes yearly average exchange rates (opens the official IRS page in a new tab) suitable for income received evenly through the year. When both returns are prepared in one place, the method is chosen once and can be explained if either authority asks.

What a dual-qualified approach means in practice

A dual US-UK tax accountant, or a team working both systems, can test a decision against both sets of rules before it is made. A pension contribution, the timing of a share sale and a claim under the foreign income and gains regime each have a US answer and a UK answer. The best outcome on one return is often a poor outcome overall, and the combined figure is what the client pays.

HMRC and the IRS exchange information, and an enquiry from either may ask for the other country's return. Returns prepared together already agree, and the working papers show how each figure was derived. US UK Tax Returns prepares both returns from one file for that reason, and asks for documents once.

How do I choose a US tax accountant in London or elsewhere in the UK?

Look for a preparer who handles both the US and the UK return, or works closely with whoever does. Check that they are authorised to prepare US returns and supervised in the UK, that they explain the reasoning behind each election, and that they ask about UK funds, pensions and state residence at the outset.

Location matters less than it once did. A US tax accountant in London and one elsewhere in the UK work from the same documents. What matters is whether the adviser's questions show an understanding of both systems. The criteria below apply to any firm, including ours.

• Anyone paid to prepare a US federal return must hold an IRS preparer tax identification number and sign the return
• Only certain US credentials carry the right to represent a taxpayer before the IRS in all matters, so ask who would respond to an IRS letter
• In the UK the title accountant is not protected by law, but tax advisers must be supervised for anti-money laundering purposes, so ask which body supervises the firm
• Ask whether one firm prepares both returns and, if not, who checks that the two agree
• An adviser who does not raise ISAs, UK funds and pensions unprompted has probably prepared few returns for UK residents
• Ask for the fee basis in writing, including forms charged separately

Documents to gather

• Last year's US and UK returns, with any foreign tax credit carryover schedules
• P60, P45 and P11D, plus the payslips for December and March
• Statements for every bank, ISA and investment account showing the highest balance in the year
• Pension statements showing employer and employee contributions
• US documents such as Forms W-2, 1099 and K-1, and any state returns
• A record of days spent in the US, the UK and elsewhere, with working days marked
• Property records: rent, expenses, mortgage interest and completion statements

The same documents serve both returns, so they are collected once, and our document checklist lists them by situation. Two items are often overlooked. The December payslip gives the calendar-year split of a UK salary that the P60 alone does not show. The travel record matters because days worked in the US decide how a salary is sourced between the two countries, which drives the credit calculation on both returns.

What if I have never filed a US tax return from the UK?

There is an established route back. The IRS streamlined procedures let non-wilful late filers submit recent returns and account reports. For people living outside the US, the Streamlined Foreign Offshore Procedures carry no penalty where the conditions are met. Both streamlined routes close once the IRS opens an examination.

Many Americans in the UK learn of the filing obligation years after it began, often when a bank asks for a US tax identification number. Others have filed every year and repeated the same quiet errors. Both groups are better served by correcting the position than by hoping it goes unnoticed.

Common mistakes on returns that were filed

• Assuming no US return is needed because UK tax was paid
• Filing as single while married to a non-US spouse
• Claiming the exclusion by habit and discarding credits that would have carried forward
• Leaving ISA income off the US return because it is tax-free in the UK
• Holding UK funds without Form 8621
• Omitting pensions, Premium Bonds or a child's accounts from the FBAR
• Using UK tax year figures on a calendar-year return
• Leaving US dividends, interest or rent off the UK return
• Stopping state returns without filing a part-year return

Catching up

The IRS streamlined filing compliance procedures (opens the official IRS page in a new tab) require the last three years of tax returns and six years of FBARs, with a signed certification that the earlier failure was non-wilful. There are two routes. The Streamlined Foreign Offshore Procedures (opens the official IRS page in a new tab) are for people who meet the non-residency test, broadly 330 full days outside the US in at least one of the last three years without a US home, and that route is penalty-free. The Domestic route, for people living in the US, charges a 5% miscellaneous offshore penalty. Tax and interest are payable on either route.

The certification is the centre of the submission. It is a statement of facts, signed under penalty of perjury, explaining why the returns were not filed. Negligence, mistake and a good-faith misunderstanding of the law are non-wilful. Knowing about the obligation and choosing to ignore it is not, and a person in that position needs a different route and legal advice.