Streamlined Foreign Offshore Procedures (SFOP)
Form 1040, Form 1040-X, FinCEN 114, Form 8938
Catch-up US returns and FBARs under the Streamlined Foreign Offshore Procedures, for Americans abroad whose missed filings were non-wilful.
What does Streamlined Foreign Offshore Procedures (SFOP) involve?
Many Americans in the UK find out years late that they should have been filing US returns and FBARs. The Foreign route of the IRS streamlined procedures is built for them. It charges no penalty beyond tax and interest, and it depends on a written certification that has to be true.
SFOP and SDOP side by side
The two streamlined routes ask for the same package of returns and FBARs. They differ on where you live, what you pay and which certification you sign.
| Compared | SFOP: Foreign route | SDOP: Domestic route |
|---|---|---|
| Who it is for | US taxpayers living outside the US who missed filings | US taxpayers living in the US who missed filings |
| Residency | For citizens and green card holders, 330 full days outside the US in at least one of the last three years, with no US abode in that year | Does not meet the Foreign route's non-residency test |
| Penalty | None (0%). The cost is the tax and interest due | 5% miscellaneous offshore penalty on the highest aggregate year-end value of the relevant foreign assets |
| Certification | Form 14653 | Form 14654 |
| Returns | Three years of delinquent or amended returns | Three years of amended returns. Original returns must already have been filed |
| FBARs | Six years of delinquent FBARs | Six years of delinquent FBARs |
| Conduct | Non-wilful, certified under penalty of perjury | Non-wilful, certified under penalty of perjury |
| Closed when | The IRS has opened an examination or investigation for any year | The IRS has opened an examination or investigation for any year |
Which one applies to me?
Take the questions in order. They are written for US citizens and green card holders. Other US taxpayers meet the non-residency test differently, and we check it with them.
Question 1: Has the IRS opened an examination or investigation of any year, or was the failure wilful?
Yes
Neither streamlined route is available. Speak to us before filing anything, because the order of the next steps matters.
No
Go on to the next question.
Question 2: In at least one of the last three years, were you outside the US for 330 full days with no US abode?
Yes
The Foreign route (SFOP) is the one to look at: no penalty beyond tax and interest, certified on Form 14653.
No
Go on to the next question.
Question 3: Did you file a US tax return for each of those three years?
Yes
The Domestic route (SDOP) is the one to look at: amended returns, the 5% penalty, certified on Form 14654.
No
Neither streamlined route fits as things stand. Other IRS procedures may, and we review the facts before recommending one.
This is a first sort, not a ruling. Residence, abode and conduct each turn on the facts of every year, and we confirm the route before any work begins.
Forms and filings involved
- Form 1040
The annual federal return for US citizens, green card holders and US residents, reporting worldwide income wherever the filer lives.
- Form 1040-X
The form for correcting a Form 1040 already filed, whether to add missed income, switch relief methods or claim a refund.
- FinCEN 114
The annual report of foreign accounts filed with FinCEN, separate from the tax return, once combined balances pass the threshold.
- Form 8938
The FATCA asset statement attached to the tax return, with higher thresholds for filers who live abroad than for those in the US.
- Form 8621
The annual return for US persons holding passive foreign investment companies, which includes most UK funds, unit trusts and ETFs.
Catching up from outside the US
The Streamlined Foreign Offshore Procedures require a defined submission: three years of delinquent or amended tax returns with all required information returns, six years of FBARs, payment of the tax and interest due, and a non-wilful certification on Form 14653.
Non-wilful conduct means negligence, inadvertence, mistake, or a good faith misunderstanding of the law. The certification is made under penalty of perjury, and its narrative deserves more care than any other page in the submission.
The Foreign route turns on a non-residency test. For US citizens and green card holders it is 330 full days outside the US in at least one of the last three years, with no US abode in that year. Those who meet it pay no penalty beyond tax and interest. Those who do not, usually because they live in the US, use the Domestic route, which charges a 5% miscellaneous offshore penalty and is certified on Form 14654.
Neither route is available once the IRS has opened a civil examination or a criminal investigation for any year. Neither protects someone whose conduct was wilful, and a false certification creates a worse problem than the one it set out to solve. For people who owe no tax and missed only information returns or FBARs, the separate delinquent submission procedures may fit better. We review the facts first and say plainly if we think the streamlined route is the wrong one.
What an SFOP submission contains
- 01
- Eligibility review against the Foreign route's non-residency test
- 02
- Delinquent or amended returns with every required information return
- 03
- Delinquent FBARs filed through FinCEN with the streamlined explanation
- 04
- Non-wilful certification on Form 14653, drafted from your own account
- 05
- Tax and interest computed year by year, with UK tax credited
Who this is for
Accidental Americans in the UK who learned of the filing duty as adults
- Long-term UK residents who stopped filing after leaving the US
- Filers abroad who sent returns but left foreign accounts or funds off them
- Americans abroad who plan to renounce and need compliant years first
Why US UK Tax Returns
Each return is prepared with the other country's return open beside it, so a credit, election or disclosure on one is supported by the other.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
Is the streamlined procedure really free of penalties?
Only on the Foreign route, and only if the submission is accepted as non-wilful. There the cost is the tax and interest due, which for UK residents with foreign tax credits is often small. The Domestic route charges a 5% miscellaneous offshore penalty on the relevant foreign assets. It also requires that US returns were filed for the years concerned, so it works through amended returns. Which route applies depends on where you lived.
What does non-wilful actually mean?
The IRS defines it as conduct due to negligence, inadvertence or mistake, or a good faith misunderstanding of what the law required. Not knowing that citizenship carries a filing duty can qualify. Knowing about the duty and choosing to ignore it does not, and nor does deliberately avoiding finding out. The certification must set out specific facts, favourable and unfavourable. Whether your history supports it is the first thing we assess.
I have already had a letter from the IRS. Can I still use the streamlined procedures?
It depends on what the letter is. Once the IRS has begun a civil examination of any of your returns, for any year and on any subject, the procedures are closed to you, and the same applies to a criminal investigation. Not every piece of IRS correspondence is an examination. We read the letter before advising, because the answer changes which options remain and how quickly a response is needed.
I moved to the UK recently. Can I use the Foreign route?
Possibly. The test looks for at least one of the last three years in which you were outside the US for 330 full days and had no US abode. One qualifying year is enough, so a move part way through the window can still work once a full year abroad has passed. If no year qualifies yet, the Domestic route is the streamlined option. We check the day counts and the abode position year by year before advising.
Can I use SFOP before giving up US citizenship?
Yes, and it is a common first step. Form 8854, filed for the year of expatriation, asks you to certify five years of US tax compliance. A streamlined submission brings the most recent years up to date, and further years filed on time complete the five. Our renunciation page sets out that sequence and what each stage involves. Whether renouncing makes sense at all depends on family, work and plans as much as tax.
Primary sources
What this page says is drawn from the official material below. Read it yourself; we would rather be checked than trusted.
Last reviewed
- Streamlined procedures for U.S. taxpayers residing outside the United States (opens in a new tab)
- Streamlined filing compliance procedures (opens in a new tab)
- Streamlined procedures for U.S. taxpayers residing in the United States (opens in a new tab)
- Delinquent international information return submission procedures (opens in a new tab)
Part of our guide
Behind on US Taxes in the UK: IRS Streamlined Filing, Accidental Americans and Renunciation
From the Blog
Ready to talk it through?
Tell us where you live, what you hold and which years are outstanding. We will say what applies and what it involves before any work begins.
Contact us