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Form 14653, issued by the Department of the Treasury's Internal Revenue Service, serves as a crucial tool for U.S. persons residing outside of the United States who wish to participate in the Streamlined Foreign Offshore Procedures. This form allows individuals to certify their eligibility for streamlined filing compliance while addressing any past failures to report income, pay taxes, or submit required information returns, including Foreign Bank Account Reports (FBARs). Taxpayers must provide detailed information about their residency status, including the number of days spent outside the U.S. during the relevant tax years. The form requires the submission of delinquent or amended income tax returns for the most recent three years, along with a statement of facts explaining the reasons for any reporting failures. It emphasizes the importance of non-willful conduct and outlines the potential consequences of willful behavior, including civil penalties or criminal investigation. Additionally, it mandates that taxpayers retain records related to their income and assets for specified periods, ensuring compliance with IRS requirements. The instructions highlight the necessity for joint filers to meet the same non-residency criteria and provide an individual narrative if their reasons for failure differ. Overall, Form 14653 is a comprehensive document designed to facilitate compliance for U.S. citizens and residents living abroad while addressing past discrepancies in tax reporting.
Key takeaways
Here are some important points to keep in mind when filling out and using Form 14653:
- Eligibility Requirements: Ensure you meet all eligibility criteria for the Streamlined Foreign Offshore Procedures. This includes being a U.S. person residing outside the United States and having non-willful conduct regarding your tax obligations.
- Joint Certification: If you are filing jointly with your spouse, both of you must meet the non-residency requirements. Each spouse should provide individual reasons for any failure to report income, if applicable.
- Detailed Statement of Facts: Include a comprehensive narrative explaining your failure to report income and file required returns. This should cover personal and financial backgrounds, as well as the sources of funds in foreign accounts.
- FBAR Compliance: If you failed to file FBARs in the last six years, you must electronically file them before submitting Form 14653. This is crucial for qualifying for the streamlined procedures.
- Record Retention: Keep all records related to your income and foreign financial accounts for at least three years after submitting the certification. This includes account statements and any relevant documentation.
- Understanding Non-Willfulness: Clearly define what non-willful conduct means in your case. This can include mistakes, negligence, or misunderstandings of tax laws.
By carefully considering these key points, you can better navigate the process of filling out and submitting Form 14653. Make sure to review your information thoroughly before submission to avoid any delays or complications.
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Documents used along the form
When submitting Form 14653, there are several other forms and documents that may be required to complete the streamlined foreign offshore procedures. Each of these documents serves a specific purpose in ensuring compliance with U.S. tax laws. Below is a list of commonly used forms and documents that accompany Form 14653.
- Form 1040: This is the standard individual income tax return form used by U.S. citizens and residents to report their income, claim tax deductions, and calculate their tax liability.
- Form 1040X: This form is used to amend a previously filed Form 1040. It allows taxpayers to correct errors or make changes to their tax returns, such as adjusting income or deductions.
- FBAR (FinCEN Form 114): The Foreign Bank Account Report is required for U.S. persons with foreign financial accounts exceeding certain thresholds. It must be filed electronically and is crucial for reporting foreign assets.
- IRS Publication 54: This publication provides guidance on the tax implications for U.S. citizens living abroad, including residency tests and foreign income exclusions.
- Form 8854: This form is used to report expatriation and to determine if an individual is a covered expatriate. It is necessary for those who renounce their U.S. citizenship or terminate their long-term residency.
- Motorcycle Bill of Sale Form: To legally document motorcycle transactions, utilize our effective motorcycle bill of sale for smooth transfers.
- Statement of Facts: A detailed narrative explaining the reasons for failing to report income and submit required information returns. This document is crucial for demonstrating non-willful conduct.
- Foreign Tax Credit Form (Form 1116): This form is used to claim a credit for foreign taxes paid on income that is also subject to U.S. tax, helping to avoid double taxation.
- Account Statements: Documentation of foreign financial accounts, including bank statements, investment records, and transaction history, which may be required to support the information reported on the FBAR.
- Professional Advisor Documentation: If a taxpayer relied on a professional advisor for tax matters, documentation including the advisor's contact information and a summary of the advice received may be necessary.
Ensuring that all required forms and documents are submitted alongside Form 14653 is essential for a smooth processing of your streamlined foreign offshore procedures application. Proper preparation can significantly reduce the chances of delays or complications with the IRS.
Dos and Don'ts
When filling out Form 14653, here are some important do's and don'ts to keep in mind:
- Do read the instructions carefully before starting.
- Do provide accurate and complete information.
- Do include all required supporting documents.
- Do double-check your math for tax and interest calculations.
- Do retain copies of your submitted form and documents for your records.
- Don't leave any sections blank unless instructed to do so.
- Don't submit incomplete forms; this may lead to delays.
- Don't ignore the requirement for a narrative statement of facts.
- Don't provide false information; this can lead to penalties.
- Don't forget to sign and date the form before submission.
Common mistakes
When filling out Form 14653, many individuals make common mistakes that can lead to complications in their application process. One major error is failing to provide a complete narrative statement of facts. This statement is crucial as it explains the reasons for not reporting all income, paying taxes, and submitting required information returns. Without this detailed explanation, the submission may be deemed incomplete, resulting in a denial of the streamlined penalty relief.
Another frequent mistake involves incorrect calculations of tax and interest owed. Taxpayers must ensure that the amounts listed for each year are accurate and reflect the total owed. If these figures are incorrect, it could lead to a balance due notice or even a refund, complicating the taxpayer's situation further. Double-checking these calculations before submission can help avoid unnecessary issues.
Many people also overlook the requirement to meet the non-residency criteria. Both spouses must meet this requirement if filing a joint certification. If the number of days spent outside the U.S. differs between spouses, this must be clearly indicated. Failing to address this can result in disqualification from the Streamlined Foreign Offshore Procedures.
Lastly, some individuals neglect to attach the necessary computations if they are not U.S. citizens or lawful permanent residents. This attachment is vital to demonstrate that they did not meet the substantial presence test. Without it, the submission will be considered incomplete. Ensuring all required documents are included is essential for a smooth processing experience.
File Characteristics
| Fact Name | Description |
|---|---|
| Form Purpose | Form 14653 is used by U.S. persons living abroad to certify eligibility for Streamlined Foreign Offshore Procedures. |
| Governing Law | The form is governed by U.S. tax law, specifically Internal Revenue Code (IRC) sections related to foreign income reporting. |
| Eligibility Criteria | Applicants must meet specific eligibility requirements, including non-willful conduct regarding tax obligations. |
| Joint Certification | Spouses can file a joint certification, but they must provide separate reasons if their failures differ. |
| Record Retention | Taxpayers must retain records related to their income and assets for three years from the date of certification. |
| FBAR Filing | Taxpayers must electronically file any delinquent FBARs for the last six years to qualify for streamlined procedures. |
| Amended Returns | Taxpayers must provide amended returns for the last three years, including all required information returns. |
| Non-Residency Requirement | Applicants must demonstrate they were outside the U.S. for at least 330 full days in one or more of the last three years. |
| Potential Penalties | Failure to comply with requirements may lead to civil fraud penalties or criminal investigations by the IRS. |
| OMB Control Number | The form has an OMB control number of 1545-2241, indicating it is approved for use by the Office of Management and Budget. |
Form Sample
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
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
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
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
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
Note: Both spouses filing a joint certification must meet the
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. |
Page of
I was physically outside the United States for at least 330 full days (answer Yes or No for each year)
Year
Yes
No
Both spouses filing a joint certification must meet the
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
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.
Catalog Number 67042A |
www.irs.gov |
Form 14653 (Rev. |
Page of
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 |
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Signature of Taxpayer (if joint certification) |
Name of Taxpayer (if joint certification) |
Date |
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For Estates Only
Signature of Fiduciary |
Date |
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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 |
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Date |
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Firm’s name |
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Firm’s EIN |
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Firm’s address |
City |
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State |
ZIP code |
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Telephone number |
PTIN |
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Check if |
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Do you want to allow another person to discuss this form with the IRS |
Yes (complete information below) |
No |
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Designee’s name |
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Telephone number |
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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
Catalog Number 67042A |
www.irs.gov |
Form 14653 (Rev. |