Form 14653 is a document used by U.S. persons residing outside of the United States to certify their eligibility for the Streamlined Foreign Offshore Procedures. This form enables individuals to rectify past failures to report income, pay taxes, and submit required information returns, including Foreign Bank Account Reports (FBARs). By completing this form, taxpayers can seek relief from penalties associated with noncompliance while ensuring they meet all necessary requirements.
The 14653 form, officially titled "Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures," is a crucial document for U.S. citizens and residents who find themselves in non-compliance with their tax obligations while living abroad. Designed by the Internal Revenue Service (IRS), this form serves as a means for individuals to certify their eligibility for streamlined procedures that allow them to rectify past tax issues without facing severe penalties. Key aspects of the form include the requirement to provide delinquent or amended income tax returns for the last three years, detailing any unpaid taxes and interest owed. Additionally, it asks for a declaration of non-willful conduct regarding the failure to report foreign income or file required information returns, such as FBARs. Individuals must also demonstrate that they meet specific residency criteria, confirming that they were physically outside the United States for at least 330 days in one or more of the past three years. Importantly, the form mandates a narrative statement of facts explaining the reasons for the tax non-compliance, which should encompass both favorable and unfavorable circumstances. This comprehensive approach not only facilitates the IRS's understanding of each taxpayer's unique situation but also helps individuals navigate the complexities of U.S. tax law while seeking relief from potential penalties.
What is Form 14653?
Form 14653 is a certification form used by U.S. persons residing outside the United States who wish to participate in the Streamlined Foreign Offshore Procedures. This form allows individuals to certify their eligibility for relief from certain penalties related to the failure to report income, pay taxes, and submit required information returns, including Foreign Bank Account Reports (FBARs).
Who needs to file Form 14653?
U.S. citizens and lawful permanent residents (green card holders) who have not reported income from foreign financial assets and meet specific criteria for non-residency are required to file Form 14653. Additionally, if spouses are filing jointly, both must meet the non-residency requirements.
What are the eligibility requirements for the Streamlined Foreign Offshore Procedures?
To qualify for the Streamlined Foreign Offshore Procedures, you must have failed to report income due to non-willful conduct, which includes negligence or misunderstanding of tax laws. You must also provide delinquent or amended tax returns for the last three years and file any required FBARs for the past six years. Furthermore, you must have been physically outside the U.S. for at least 330 full days during the covered tax years.
What information must be included in the certification?
The certification requires detailed information about your tax situation, including the years for which you are filing returns, the amount of tax owed, and the interest due. You must also provide a narrative statement explaining your failure to report income and submit required returns, detailing your personal and financial background, as well as the source of funds in your foreign accounts.
What happens if I do not meet the non-residency requirement?
If you do not meet the non-residency requirement, your submission will be considered incomplete, and you will not qualify for the Streamlined Foreign Offshore Procedures. It is crucial to accurately document your residency status and provide all necessary computations if you are not a U.S. citizen or lawful permanent resident.
How long should I retain records related to my income and assets?
You are required to retain all records related to your income and foreign financial assets for three years from the date of your certification. If you filed delinquent FBARs, you must keep those records for six years. This includes account statements and any documentation related to your foreign financial accounts.
What are the consequences of providing false information on Form 14653?
Providing false information on Form 14653 can lead to severe consequences, including penalties for tax fraud. The Internal Revenue Service (IRS) may open an investigation if they find evidence of willfulness or fraud, which could result in civil penalties or even criminal charges.
Can I seek a refund for taxes paid beyond the assessment limitations period?
If you seek a refund for taxes or interest paid on omitted income reported in your amended returns, you may forfeit the favorable terms of the Streamlined Procedures. It is essential to understand the implications of claiming a refund beyond the assessment limitations period before proceeding.
How long does it take to complete Form 14653?
The time required to complete Form 14653 varies based on individual circumstances. On average, it takes approximately eight hours to gather the necessary information and complete the form. This time may increase depending on the complexity of your tax situation.
Understand the Purpose: The 14653 form is designed for U.S. persons living abroad who need to certify their eligibility for the Streamlined Foreign Offshore Procedures. This program helps individuals who failed to report foreign income and assets to correct their tax filings without facing penalties.
Gather Necessary Information: Before filling out the form, collect all relevant documents, including your Tax Identification Number (TIN), mailing address, and details about your foreign financial accounts. Accurate information is crucial for a successful submission.
Document Your Residency: You must provide proof of your physical presence outside the U.S. for at least 330 days during the past three years. This requirement applies to both spouses if filing jointly. Be prepared to detail your residency status clearly.
Explain Your Circumstances: The form requires a narrative statement explaining why you failed to report all income and submit necessary returns. Be honest and thorough, including both favorable and unfavorable facts about your situation.
Retain Records: You are obligated to keep all records related to your income and foreign assets for a minimum of three years after submitting the form. If you have filed delinquent FBARs, maintain those records for six years.
Be Aware of Consequences: If the IRS finds evidence of willful neglect or fraud during the review process, you could face severe penalties. Understanding the implications of your disclosures is essential for navigating this process safely.
This form is intended for U.S. persons residing outside the United States who failed to report income due to non-willful conduct. Non-willful conduct can stem from negligence or misunderstanding, not just intentional evasion.
While the form is part of the Streamlined Foreign Offshore Procedures, it does not guarantee immunity. If the IRS discovers evidence of willfulness or fraud, they may still impose penalties or initiate an investigation.
Both U.S. citizens and lawful permanent residents (green card holders) can utilize this form. It also accommodates certain non-residents who can demonstrate they do not meet the substantial presence test.
A narrative statement explaining the reasons for failing to report income is mandatory. Submissions lacking this narrative will be considered incomplete and will not qualify for streamlined penalty relief.
Individuals must electronically file any delinquent FBARs (Foreign Bank Account Reports) as part of the Streamlined Foreign Offshore Procedures. Failure to do so will render the submission incomplete.
The form requires individuals to provide delinquent or amended tax returns for the three most recent years for which the U.S. tax return due date has passed. It is not limited to just the last year.
Both spouses must independently meet the non-residency requirements and provide individual reasons for any failures to report income. If their circumstances differ, they must disclose that information separately.
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
1545-2241
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
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 non-willful conduct. I understand that non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.
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 three-year assessment limitations period under I.R.C. § 6501(a). Other assessment limitations periods in I.R.C. § 6501 may allow the Internal Revenue Service to assess and collect tax. If I seek a refund for any tax or interest paid for the omitted income that I am reporting on my amended income tax returns because I feel that my payments were made beyond the assessment limitations period, I understand that I will forfeit the favorable terms of the Streamlined Procedures.
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 non-residency requirements for the Streamlined Foreign Offshore procedures as disclosed below.
Note: Both spouses filing a joint certification must meet the non-residency requirements.
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. 10-2017)
Page of
I was physically outside the United States for at least 330 full days (answer Yes or No for each year)
Yes
No
Both spouses filing a joint certification must meet the non-residency requirement. If the number of days physically outside of the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.
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 non-residency requirement. If the number of days inside the U.S. differs for each spouse, disclose that on the chart above or in an attachment to this certification.
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.
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
Signature of Taxpayer (if joint certification)
Name of Taxpayer (if joint certification)
For Estates Only
Signature of Fiduciary
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
Firm’s name
Firm’s EIN
Firm’s address
PTIN
Check if
Self-Employed
Do you want to allow another person to discuss this form with the IRS
Yes (complete information below)
Designee’s name
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
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Incomplete Information: Failing to provide all required personal details, such as names, TINs, and contact information, can lead to delays or rejection of the form.
Missing Narrative Statement: Not including a detailed statement of facts explaining the reasons for failing to report income can render the submission incomplete.
Incorrect Tax Calculations: Errors in calculating the total tax and interest owed may result in a balance due notice or refund issues. Ensure accuracy in all figures.
Failure to Meet Residency Requirements: Not properly documenting physical presence outside the U.S. for at least 330 days can disqualify the application.
Joint Certification Misunderstandings: If submitting jointly, both spouses must meet the eligibility criteria. Failing to disclose differing residency days can complicate the process.
Neglecting Record Retention: Not agreeing to retain necessary records for the required timeframes can lead to complications if the IRS requests documentation.
When filling out Form 14653, it is essential to approach the task with care and attention to detail. Here are four important dos and don'ts to keep in mind:
Form 1040 is the standard individual income tax return form used by U.S. taxpayers. Like Form 14653, it requires the taxpayer to report income, deductions, and credits. Both forms necessitate accurate reporting of financial information to ensure compliance with U.S. tax laws. Additionally, both forms may involve the submission of supporting documents, such as W-2s or 1099s, to substantiate the reported income. While Form 1040 is used for general tax filing, Form 14653 specifically addresses the needs of U.S. persons residing outside the country who are seeking to rectify their tax filings under streamlined procedures.
Form 1040X is the amended U.S. individual income tax return. This form allows taxpayers to correct errors made on their original Form 1040. Similar to Form 14653, Form 1040X is used when a taxpayer needs to report changes in income, deductions, or credits. Both forms require a clear explanation of the changes made and may necessitate the submission of additional documentation to support the amendments. The main distinction lies in the purpose: Form 1040X is solely for amendments, while Form 14653 is part of a broader process for those residing abroad.
Form 8938, the Statement of Specified Foreign Financial Assets, is another document that shares similarities with Form 14653. Both forms require U.S. taxpayers to disclose foreign financial assets. Form 8938 is specifically for reporting specified foreign financial assets, while Form 14653 deals with the certification process for taxpayers who failed to report income from such assets. Both forms aim to ensure compliance with U.S. tax laws and may involve penalties for non-compliance.
In the realm of financial agreements, understanding the legal implications is crucial; for those seeking a formalized way to document a loan, the use of a Promissory Note becomes essential. This document not only clarifies the terms of repayment but also protects both parties involved by outlining expectations and obligations clearly.
The Foreign Bank Account Report (FBAR), FinCEN Form 114, is crucial for U.S. persons with foreign bank accounts. Like Form 14653, the FBAR is part of the compliance framework for reporting foreign financial interests. Both documents require taxpayers to disclose information about foreign accounts, but the FBAR focuses specifically on account balances and transactions, while Form 14653 encompasses a broader range of tax-related issues. Failure to file the FBAR can lead to significant penalties, similar to those associated with non-compliance in the context of Form 14653.
Form 8854, the Initial and Annual Expatriation Statement, is used by individuals who have expatriated from the United States. This form is similar to Form 14653 in that it deals with U.S. tax obligations for individuals living abroad. Both forms require detailed financial information and compliance with U.S. tax laws. However, Form 8854 specifically addresses the tax implications of giving up U.S. citizenship or residency, while Form 14653 focuses on rectifying past non-compliance for those still maintaining their U.S. status.
Form 5471, the Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is another document that shares common ground with Form 14653. Both forms require U.S. persons to report foreign financial interests and activities. Form 5471 specifically targets U.S. persons who are officers, directors, or shareholders in foreign corporations, while Form 14653 is geared towards individuals seeking to rectify their tax filing status. Both forms emphasize the importance of transparency and compliance with U.S. tax regulations.
Form 8862, the Information to Claim Earned Income Credit After Disallowance, is relevant for taxpayers who have had their earned income credit denied in the past. Similar to Form 14653, it requires a detailed explanation of the taxpayer's situation. Both forms emphasize the importance of accurate reporting and compliance with tax laws. However, Form 8862 specifically addresses eligibility for the earned income credit, while Form 14653 focuses on rectifying past non-compliance related to foreign income.
Form 8888, the Allocation of Refund (Including Savings Bond Purchases), allows taxpayers to designate how they want their tax refund distributed. While it may seem unrelated at first glance, both Form 8888 and Form 14653 involve financial reporting and compliance with IRS regulations. Form 8888 is used to manage refunds, whereas Form 14653 is utilized to correct past filing errors. Both forms require careful attention to detail to ensure that the taxpayer's intentions are accurately reflected.