Five questions, one at a time. You'll land on one of five paths: late FBARs, delinquent information returns, Streamlined Foreign Offshore, Streamlined Domestic Offshore, or a conversation with a person. Nothing here asks for an account balance or any other dollar figure, so it can't estimate a penalty and doesn't try. It's general information and routing. It isn't tax advice for your situation.
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Question 1
What you file: each missed year on FinCEN Form 114, through the BSA E-Filing System, with a reason for filing late selected on the report's cover page.
On penalties: there's no promise attached to this path. The IRS used to publish a named delinquent-FBAR procedure that said it wouldn't penalise a qualifying filer, and that page is gone. What survives is the reasonable-cause exception in the statute, and whether it applies is the IRS's call. Read what filing late FBARs actually involves before you file.
Cost: we don't publish a fee for this one, so you won't get a number here. If you want it priced, that happens at the $249 Cross-Border Assessment, which credits in full toward any engagement. Plenty of people on this path need nothing beyond the late reports and a short reasonable-cause note.
IRS: If the IRS hasn't contacted you about a late FBAR and you're not under civil or criminal investigation by the IRS, you should file late FBARs as soon as possible to keep potential penalties to a minimum. Follow these instructions to explain your reason for filing late.
(IRS, Report of Foreign Bank and Financial Accounts; the reason is picked from a drop-down at FinCEN, Filing Late.)
What you file: the missed form, attached to an amended income tax return. Forms 3520 and 3520-A go on their own, under their own instructions. You can attach a reasonable cause statement to each one.
On penalties: this isn't a penalty-free route, and the IRS doesn't describe it as one. Its own wording is that penalties may still be assessed.
Cost: we don't publish a fee for this one either, so you won't get a number here. It gets priced at the $249 Cross-Border Assessment.
IRS: Taxpayers who have identified the need to file delinquent international information returns who are not under a civil examination or a criminal investigation by the IRS and have not already been contacted by the IRS about the delinquent information returns should file the delinquent information returns through normal filing procedures. Penalties may be assessed in accordance with existing procedures.
(IRS, Delinquent international information return submission procedures)
What you file: for each of the most recent 3 years whose return deadline has passed, delinquent or amended returns with all required information returns, for each of the most recent 6 years whose FBAR deadline has passed, any missing FBARs, and Form 14653, the Certification by U.S. Person Residing Outside of the U.S.
What you still owe: the full tax and interest on those filings goes in with them. What the path takes off the table, if you're eligible and you follow the instructions, is failure-to-file, failure-to-pay, accuracy-related, information return and FBAR penalties.
Cost: streamlined files for a Canadian usually cost US$2,500 to $4,500 in preparer fees, and a typical employee file owes $0 US tax. TFSAs, Canadian mutual funds and rental years push you toward the top of that range. See what a streamlined package costs for a Canadian, what the catch-up work involves and what it costs, and our published cross-border fee card. A firm quote gets fixed in writing at the $249 assessment, never before.
Full walk-through: the full walk-through for a US citizen in Canada who never filed. Cost drivers worth reading first: whether your TFSA needs Form 3520 and whether your Canadian funds are PFICs.
have failed to report the income from a foreign financial asset and pay tax as required by U.S. law, and may have failed to file an FBAR. If you never filed but your foreign accounts are small and their income was never taxable anywhere, there may be no such failure to certify to. Worth a read before you sign anything.
returns submitted under the streamlined procedures may be subject to IRS examination, additional civil penalties, and even criminal liability, if appropriate.
The criterion you cleared: meet the applicable non-residency requirement if, 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, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days
(IRS, U.S. taxpayers residing outside the United States). For a visa holder the same page runs the test through IRC section 7701(b)(3) instead.
The outcome, whole, with its conditions: A taxpayer who is eligible to use these Streamlined Foreign Offshore Procedures and who complies with all of the instructions outlined below will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties.
The sentence before it: The full amount of the tax and interest due in connection with these filings must be remitted with the delinquent or amended returns.
And the clause that follows it: unless the examination results in a determination that the original tax noncompliance was fraudulent and/or that the FBAR violation was willful.
Eligible and instruction-compliant, both.
What you file: for each of the most recent 3 years whose return deadline has passed, amended returns on Form 1040X, for each of the most recent 6 years whose FBAR deadline has passed, any missing FBARs, Form 14654, the Certification by U.S. Person Residing in the U.S., and a Title 26 miscellaneous offshore penalty the foreign path doesn't carry. This path takes amended returns only. Delinquent income tax returns can't go in under it.
What the penalty is: 5 percent of the highest aggregate balance of the foreign financial assets it applies to, across the covered return and FBAR years. It's charged once, against a single year, and it isn't 5 percent per year or per account. Nothing here calculates it, because on Form 14654 that schedule is something you swear to yourself.
What you still owe: tax and interest, same as the foreign path. If you're eligible and you follow the instructions, the miscellaneous offshore penalty is the only penalty you carry.
Cost: streamlined files for a Canadian usually cost US$2,500 to $4,500 in preparer fees, and a typical employee file owes $0 US tax. The domestic path sits at the higher end of that range because of the penalty computation and the amended returns. See what a streamlined package costs for a Canadian and our published cross-border fee card. A firm quote gets fixed in writing at the $249 assessment, never before.
Cost drivers worth reading first: whether your TFSA needs Form 3520 and whether your Canadian funds are PFICs.
returns submitted under the streamlined procedures may be subject to IRS examination, additional civil penalties, and even criminal liability, if appropriate.
Amended returns only: You may not file delinquent income tax returns (including Form 1040, U.S. Individual Income Tax Return) using these procedures.
The penalty this path carries: The Title 26 miscellaneous offshore penalty is equal to 5 percent of the highest aggregate balance/value of the taxpayer's foreign financial assets that are subject to the miscellaneous offshore penalty during the years in the covered tax return period and the covered FBAR period.
On how that base is built: the highest aggregate balance/value is determined by aggregating the year-end account balances and year-end asset values of all the foreign financial assets subject to the miscellaneous offshore penalty for each of the years in the covered tax return period and the covered FBAR period and selecting the highest aggregate balance/value from among those years.
(IRS, U.S. taxpayers residing in the United States)
The outcome, whole, with its conditions: A taxpayer who is eligible to use these streamlined domestic offshore procedures and who complies with all of the instructions below will be subject only to the Title 26 miscellaneous offshore penalty and will not be subject to accuracy-related penalties, information return penalties, or FBAR penalties.
Read that list against the foreign one: the domestic list doesn't include failure-to-file or failure-to-pay penalties, and the foreign one does.
What couldn't be established: the contact criterion. An open examination or a criminal investigation takes both streamlined paths off the table outright, and the other two paths carry their own contact conditions.
IRS: If the IRS has initiated a civil examination of taxpayer's returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the streamlined procedures. Taxpayers under examination may consult with their agent. Similarly, a taxpayer under criminal investigation by IRS Criminal Investigation is also ineligible to use the streamlined procedures.
(Streamlined filing compliance procedures)
What couldn't be established: whether the contact you had is a civil examination. That word is a hard disqualifier for both streamlined paths, and the IRS doesn't publish a line between an examination and an automated notice.
A letter from your Canadian bank about FATCA is very often nothing at all, and so is a balance-due notice. An examination is a different animal. The conversation is to work out which one you got, and it's a short conversation.
IRS: If the IRS has initiated a civil examination of taxpayer's returns for any taxable year, regardless of whether the examination relates to undisclosed foreign financial assets, the taxpayer will not be eligible to use the streamlined procedures.
(Streamlined filing compliance procedures)
What couldn't be established: the non-willfulness certification. Both streamlined paths need you to certify, under penalties of perjury, that the failures were due to non-willful conduct, and a web form is the wrong place to work out whether yours were.
This tool isn't saying anything about you. It's saying a person should look at the facts before anyone signs a certification.
The IRS definition: 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
.
Where the IRS itself points: Taxpayers who are concerned that their failure to report income, pay tax, and submit required information returns was due to willful conduct and who therefore seek assurance that they will not be subject to criminal liability and/or substantial monetary penalties should consider participating in the IRS Criminal Investigation Voluntary Disclosure Practice and should consult with their professional or legal advisers.
(Streamlined filing compliance procedures) That's a different practice from the ones on this page.
What couldn't be established: your status. A green card you stopped using but never formally surrendered is a fact pattern the published criteria don't cover, and it moves two things at once: which non-residency test applies to you, and what you were obliged to file in the first place.
The two tests it sits between: Non-residency requirement applicable to individuals who are U.S. citizens or lawful permanent residents (i.e., "green card holders")
and Non-residency requirement applicable to individuals who are not U.S. citizens or lawful permanent residents
(IRS, U.S. taxpayers residing outside the United States).
What couldn't be established: the 330-day limb. It's a count, so it's answerable, and it's worth answering properly because one qualifying year out of the three is enough.
IRS: meet the applicable non-residency requirement if, 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, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days
(IRS, U.S. taxpayers residing outside the United States).
What couldn't be established: the abode limb. It isn't a bright line and you were right not to guess. Keeping a place in the US doesn't automatically mean your abode is there, and which way it cuts on your facts decides whether you're on the foreign path or the domestic one.
IRS: Under IRC section 911 and its regulations, which apply for purposes of these procedures, neither temporary presence of the individual in the United States nor maintenance of a dwelling in the United States by an individual necessarily mean that the individual's abode is in the United States.
(IRS, U.S. taxpayers residing outside the United States)
What couldn't be established: the substantial presence test, for at least one of the three years. It's a day count with a weighting formula, so it's answerable. Our companion tool will count your US days for each of those years, and if it lands you outside the test in any one of them, come back and answer yes.
IRS: Individuals who are not U.S. citizens or lawful permanent residents ... meet the applicable non-residency requirement if, in any one or more of the last three years for which the U.S. tax return due date (or properly applied for extended due date) has passed, the individual did not meet the substantial presence test of IRC section 7701(b)(3).
(IRS, U.S. taxpayers residing outside the United States)
What couldn't be established: your spouse's side of the non-residency requirement. On a joint return the foreign path needs both of you to meet it, and the domestic path is written for the case where one or both of you fail it. A couple split across the two is a case the IRS pages don't address.
Foreign path: for joint return filers, both spouses must meet the applicable non-residency requirement described below
(IRS, U.S. taxpayers residing outside the United States). Domestic path: for joint return filers, one or both of the spouses must fail to meet the applicable non-residency requirement
(IRS, U.S. taxpayers residing in the United States).
What couldn't be established: a path, and this one's a gap in the published criteria rather than a gap in your answers. You didn't file the returns, and you don't meet the non-residency requirement, which lands you outside both streamlined paths at once. No IRS page says what someone in this position should do instead, which is why this needs a person.
The domestic path requires that you have previously filed a U.S. tax return (if required) 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
, and its instructions add: You may not file delinquent income tax returns (including Form 1040, U.S. Individual Income Tax Return) using these procedures.
(IRS, U.S. taxpayers residing in the United States) That second sentence sits in the instructions rather than the eligibility list, which is why most pages route people like you to the domestic path by mistake.
The current list of compliance options names three, and none of them is written for this.
What happens next: no exposure figure, because there isn't one worth giving you. The $249 Cross-Border Assessment is 60 minutes with a dual-licensed CPA plus a written summary of your file: what you owe where, what needs filing, and your exact quote. It credits in full toward any engagement and it's non-refundable. On this path you're not buying the fix, you're buying an answer to which of these applies to you.
What this tool can't see: it reads the published IRS criteria and nothing else, so it can't see the facts an examiner would weigh. US abode and what counts as a civil examination aren't bright lines, and on both of them "I am not sure" is a real answer. The three-year return window and the six-year FBAR window roll every filing season, which is why this page names no specific years. State filing obligations, your Canadian-side filing obligations and the CRA Voluntary Disclosures Program sit outside this tool.
What a streamlined or late-FBAR package actually needs from you: the account statements, the years, the forms, and the order to do them in.
These are the published limits, not your number. Working out what someone actually faces takes their balances and their history, which is a conversation rather than a form.
the amount of any civil penalty imposed under subparagraph (A) shall not exceed $10,000. For a willful one,
the maximum penalty under subparagraph (B)(i) shall be increased to the greater of ... (I) $100,000, or (II) 50 percent of the amount determined under subparagraph (D)(31 U.S.C. 5321(a)(5)). Those are ceilings on what an examiner may assess, not a bill.
No penalty shall be imposed under subparagraph (A) with respect to any violation if ... (I) such violation was due to reasonable cause, and (II) the amount of the transaction or the balance in the account at the time of the transaction was properly reported.It can take the number to zero. It does not apply to willful violations: for those, the same statute says
subparagraph (B)(ii) shall not apply.
a single non-willful reporting violation can only result in a single penalty, but a single willful reporting violation can result in multiple penalties depending on the number of accounts which were not properly reported.Non-willful counts per report. Per-account counting survives for willful violations only (IRM 4.26.16).
should not be imposed if: The violation was due to reasonable cause, and Accurate delinquent or amended FBAR(s) are filed, rectifying prior violation(s).The manual also caps the total:
In no event will the total amount of the penalties for non-willful violations (among all open years) exceed 50 percent of the highest aggregate balance of all foreign financial accounts to which the violations relate for the years under examination.And on the delinquent-filing situation specifically:
A penalty will not be asserted for an account if it is determined that the failure to report the account on a timely filed FBAR was not willful, the failure to report the account on a timely-filed FBAR was due to reasonable cause, and the account was properly reported on the delinquent FBAR.Read the words
if it is determined. That's internal guidance to examiners, and a filing position you can rely on isn't the same thing.
Want the magnitude question answered properly, in prose, with the hedges attached? That's how FBAR penalty exposure really works.
will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties(IRS). Interest still applies. There are two versions, one for people living outside the US and one for people living in it, and they aren't interchangeable.
due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law(IRS). You certify it yourself, in the first person, under penalties of perjury, on Form 14653. That's a judgement about your own history that no questionnaire can make for you, and anyone telling you otherwise online is overreaching.
any one or more of the most recent three years(IRS), not at where you live today. A single qualifying year inside that window can be enough, which is why the question is worded the way it is.
The Cross-Border Assessment is a flat $249. Sixty minutes with a dual-licensed CPA plus a written summary of your file: what you owe where, what needs filing, and your exact quote. It credits in full toward any engagement.
See the $249 assessment