Successfully going through the Streamlined Procedure means a person would be fully up to date with *all* their tax obligations, correct?
If so, then they are also up to date with their tax obligations for the preceding 5 tax years, correct?
If so, is it not the case that they can truthfully and accurately answer "yes" to the question on form 8854 ("Initial and Annual Expatriation Statement") that asks:
[quote]
"Do you certify under penalties of perjury that you have complied with
all of your tax obligations for the 5 preceding tax years (see
instructions)?"
[/quote]
I am having a great deal of difficulty getting a definitive (evidence-based) answer to this.
On a related note, is there any notion of a "Letter of Compliance" or "Certificate of Compliance" that a USC can obtain from the IRS that basically says you are up to date on your tax obligations?
TIA
Streamlined, 8854, tax obligations for 5 preceding tax years
Moderator: Mark T Serbinski CA CPA
Thanks for the response, Taxpoor.
The potential problem with that, as I see it, is that the IRS seems to be unpredictable (to put it nicely). They could easily say, "sorry you didn't file 2008 and 2009 tax returns, so now you're a covered expat". Since they basically make the rules (up as they go along, it appears), I'd have little to no recourse.
Which brings me to another question: what would be the best way to get at least 5 years of returns filed?
1) Quiet disclosure of 5 or 6 years of returns (and 6 years of FBARs)
2) Streamlined Program, but submit 5 years of returns instead of 3 (2008-2012).
3) Streamlined Program, and once through, then submit remaining 2 years of returns (2010-2012, followed later by 2008,2009)
#1 seems to have the problem that the IRS may be taking a dim view of QDs now, due to the GAO report of April 26, 2013.
#2 seems to give the IRS an opening for rejecting you from Streamlined.
#3 seems that it might make the IRS cranky since you're pseudo-reneging on the implied deal.
All I want is a clear path to move forward with.
The potential problem with that, as I see it, is that the IRS seems to be unpredictable (to put it nicely). They could easily say, "sorry you didn't file 2008 and 2009 tax returns, so now you're a covered expat". Since they basically make the rules (up as they go along, it appears), I'd have little to no recourse.
Which brings me to another question: what would be the best way to get at least 5 years of returns filed?
1) Quiet disclosure of 5 or 6 years of returns (and 6 years of FBARs)
2) Streamlined Program, but submit 5 years of returns instead of 3 (2008-2012).
3) Streamlined Program, and once through, then submit remaining 2 years of returns (2010-2012, followed later by 2008,2009)
#1 seems to have the problem that the IRS may be taking a dim view of QDs now, due to the GAO report of April 26, 2013.
#2 seems to give the IRS an opening for rejecting you from Streamlined.
#3 seems that it might make the IRS cranky since you're pseudo-reneging on the implied deal.
All I want is a clear path to move forward with.
My opinion:
#3 is most acceptable. Remember that streamlined etc is for 3-year complaince. The 5 year requiremnt is for expatriation.
Under streamlined, assuming you qualify, IRS is essentially absolving you of any tax consequences for the years 4-6 (the six-year backfiling is only required if IRS requests it, and eligibility for streamlined process follows the same criteria as eligibility for 3-year rather than 6 year back-filing.
To expatriate, you need to show 5 year. So, since, you would have already submitted 3 years under streamlined compliance, and thus shown that you met that criteria, years 4-5 should follow suit.
#1 has gone the way of the dodo bird.
#2 is NOT the agreement.
#3 is most acceptable. Remember that streamlined etc is for 3-year complaince. The 5 year requiremnt is for expatriation.
Under streamlined, assuming you qualify, IRS is essentially absolving you of any tax consequences for the years 4-6 (the six-year backfiling is only required if IRS requests it, and eligibility for streamlined process follows the same criteria as eligibility for 3-year rather than 6 year back-filing.
To expatriate, you need to show 5 year. So, since, you would have already submitted 3 years under streamlined compliance, and thus shown that you met that criteria, years 4-5 should follow suit.
#1 has gone the way of the dodo bird.
#2 is NOT the agreement.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
I will agree with Nelsona, option "3" is probably the best one...and as pointed out, filing only 3 years will not fly as you need the 5 (6) years of returns in order to expatriate.
when I started this mess 2 years ago...I backfiled to year 2005, sent 6 years of FBARs in with a reasonable cause letter...and waited.
I recieved my 'Obamo stimulus check for 2008, so I assumed they accepted my backfilings and proceeded with the next steps of relinquishment. This year (2012) was my final tax filing.
I think things are a bit more difficult now, as in the past I believe the IRS was more understanding when the rush came for compliance for individuals like myself who did not know about our tax requirements...now you have to get a PLR just to backfile 8891s and as of July 1st can no longer send paper FBARs into the Detroit office.
Good luck
when I started this mess 2 years ago...I backfiled to year 2005, sent 6 years of FBARs in with a reasonable cause letter...and waited.
I recieved my 'Obamo stimulus check for 2008, so I assumed they accepted my backfilings and proceeded with the next steps of relinquishment. This year (2012) was my final tax filing.
I think things are a bit more difficult now, as in the past I believe the IRS was more understanding when the rush came for compliance for individuals like myself who did not know about our tax requirements...now you have to get a PLR just to backfile 8891s and as of July 1st can no longer send paper FBARs into the Detroit office.
Good luck
Thanks for the responses, Taxpoor and Nelsona.
#3 does sound safest, I just hate dragging this *&%# thing on. I'd happily file 6 years at once, if I could be guaranteed the same treatment as in Streamlined.
Taxpoor, a quick question: did you also file delinquent 3520 and/or 3520A forms (e.g. you're in Canada and have an RESP and/or a TFSA)?
#3 does sound safest, I just hate dragging this *&%# thing on. I'd happily file 6 years at once, if I could be guaranteed the same treatment as in Streamlined.
Taxpoor, a quick question: did you also file delinquent 3520 and/or 3520A forms (e.g. you're in Canada and have an RESP and/or a TFSA)?
Due to your RRSP you'll need to include in S/L submission:
1. a statement requesting an extension of time to make an election to defer income tax and identifying the pertinent treaty provision;
2. for relevant Canadian plans, a Form 8891 for each tax year and each plan and a description of the type of plan covered by the submission; and
3. a dated statement signed by the taxpayer under penalties of perjury describing:
1. the events that led to the failure to make the election,
2. the events that led to the discovery of the failure, and
3. if the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities.
1. a statement requesting an extension of time to make an election to defer income tax and identifying the pertinent treaty provision;
2. for relevant Canadian plans, a Form 8891 for each tax year and each plan and a description of the type of plan covered by the submission; and
3. a dated statement signed by the taxpayer under penalties of perjury describing:
1. the events that led to the failure to make the election,
2. the events that led to the discovery of the failure, and
3. if the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities.