How to apply for IRS tax amnesty program: Streamlined, FBAR amnesty, and more
Many US citizens and green card holders discover far too late that past tax returns and foreign account reports were never filed. The stress builds fast, but this kind of non-compliance is more common than most people realize – and it usually stems from confusion, not intent.
You're probably here because you've realized you have unfiled tax returns, missed FBARs, or both. Maybe you just learned that living abroad doesn't exempt you from US tax obligations. Or perhaps you discovered a foreign account reporting requirement you never knew existed. Whatever brought you here, there's a structured way forward.
In a TFX webinar, Wendy Christiansen, CPA, explained the IRS perspective: "Contrary to popular belief, the IRS really doesn't want to penalize people; they just want people to be in compliance."
That's exactly what these programs are designed to do. The term "tax amnesty" gets used a lot, but the IRS officially calls them compliance procedures. Think of them as structured paths that help you fix past mistakes without facing worst-case penalties – as long as you come forward voluntarily.
The IRS offers several paths back to compliance, and each one has its own rules. When unreported income is part of the picture, working with Taxes for Expats helps you navigate which IRS amnesty program fits your situation:
- Streamlined filing compliance procedures for non-willful offshore issues
- IRS Criminal Investigation Voluntary Disclosure Practice for willful or high-risk cases
- Delinquent FBAR submission procedures and DIIRSP for certain late forms
- Relief procedures for certain former citizens for those giving up US citizenship
- Penalty relief tools like First Time Abate and reasonable cause
Contact us today so we can walk you through every IRS tax amnesty program and find the path that fits your situation.
What are IRS tax amnesty programs?
The IRS tax amnesty program is a structured way to correct past non-compliance by filing missing forms and paying what you owe. These programs exist to help people clean up problems in a calm, organized way instead of facing an audit with unknown stakes.
But let's be clear about what these programs do not do: they don't erase the tax you owe. You'll still pay the actual tax due, plus interest. What the tax amnesty program can do is reduce or waive penalties, depending on which path you qualify for and how you present your case.
What you need to know:
- What you still owe: The underlying tax and interest on any unreported income
- What may be reduced: Civil penalties, FBAR penalties, and late-filing penalties (depending on the program and your facts)
- What can trigger ineligibility: IRS contact or an open examination, willful conduct, incomplete submissions, or inconsistent statements
Many people mistakenly believe that "amnesty" means a free pass, or that the IRS forgives unreported income. In reality, the IRS offers relief programs focused on penalties and filing requirements – not wiping out what you legitimately owe.
To see the difference between outcomes, consider two cases: United States v. Williams shows a taxpayer hit with harsh FBAR penalties for willful foreign-account violations. That stands in sharp contrast to Matthew, a TFX client and English teacher in South Korea, who used streamlined procedures to fix several late years. The gap between those paths captures the heart of an IRS amnesty program: early honesty leads to a controlled process, while silence pushes risk higher.
Here's the help these programs typically provide:
- Penalty relief that removes or reduces civil fines – sometimes replacing them with a single 5% offshore penalty instead of far higher FBAR charges that can reach up to 50% of the highest account balance.
- Lower total fines compared with what an audit could trigger, avoiding the worst-case penalty exposure.
- Filing relief that reduces the number of years to fix – often three tax returns and six FBARs instead of every late year.
- A clear civil path for serious cases, so the process stays structured rather than drifting toward criminal risk.
Is the IRS amnesty program still available?
Yes. The Streamlined filing compliance procedures are currently active per IRS guidance. It's worth noting that many people confuse these with the older Offshore Voluntary Disclosure Program (OVDP), which closed in 2018. OVDP was the predecessor – it had higher penalties and stricter terms. Today's IRS streamlined amnesty program is more accessible and designed specifically for non-willful cases.
Types of IRS amnesty and relief programs
The IRS amnesty programs help people fix past non-compliance – from simple filing mistakes to unreported foreign accounts. Each program has different eligibility rules based on your circumstances.
Which path fits you?
- Non-willful + foreign accounts → Streamlined procedures (SFOP or SDOP). You forgot to file returns or FBARs, but didn't intentionally hide anything. File three years of returns and six years of FBARs with reduced or zero penalties
- Willful or high-risk facts → Voluntary disclosure (VDP). You knew about the requirements but didn't comply. This path reduces criminal exposure
- Only missing FBARs → Delinquent FBAR procedures. You reported all income but forgot the foreign account reports. Submit without penalties
- Missing international forms → Delinquent information return procedures (DIIRSP). You paid tax but forgot forms like 5471 or 3520. File with a reasonable-cause statement
- Former citizen, low assets → Relief for former citizens. You gave up citizenship and met the $2 million net worth limit. Close out obligations without exit tax
These options form the core of the IRS streamlined tax amnesty program, designed to help expats and offshore account holders come into compliance.
Important: If the IRS already contacted you, stop and reassess. Programs close once the IRS initiates contact.
The key to understanding how to get tax amnesty from the IRS is timing. The earlier you come forward voluntarily, the more options you have and the lower your penalties will be. Whether you need the IRS foreign bank account amnesty or help with other compliance issues, acting before IRS contact is crucial.
Streamlined filing compliance procedures
The streamlined filing compliance procedures help people catch up when past non-compliance was a genuine mistake. There are two tracks, and which one you use depends on where you live:
| Streamlined Foreign Offshore Procedures | Streamlined Domestic Offshore Procedures | |
|---|---|---|
| Who qualifies | Meet non–residency requirement + non–willful | Don’t meet non–residency (generally U.S. resident) + non–willful |
| What you file | 3 years amended/late returns + 6 years FBARs | 3 years amended/late returns + 6 years FBARs |
| Penalty | 0% offshore penalty (tax + interest still due) | 5% offshore penalty on in–scope foreign assets (tax + interest still due) |
| Certification form | Form 14653 | Form 14654 |
Both paths require the same filings – three years of amended or late tax returns plus six years of FBARs – but the penalty treatment differs. SFOP has no offshore penalty if you meet the non–residency test, while SDOP carries a 5% penalty on the highest aggregate balance of your foreign financial assets.
How to apply:
- Package contents: Three years of amended or delinquent tax returns, six years of FBARs, and payment for any tax due
- Certification forms: Form 14653 (for SFOP) or Form 14654 (for SDOP) with a signed statement explaining your non–willful conduct
- Where to file: SFOP is mailed to a specific IRS address; SDOP returns can be e–filed, but the certification statement must be mailed
Common mistakes to avoid:
- Inconsistent non–willful narrative across forms
- Missing years in the filing package
- Applying when you don't qualify (e.g., IRS already contacted you)
The IRS Criminal Investigation Voluntary Disclosure Practice – often called VDP – helps in cases where past actions may look willful.
Unlike streamlined procedures, VDP isn't a form you mail in. It's a structured process managed by IRS Criminal Investigation. You start with a preclearance request to confirm the IRS isn't already investigating you. Once you're cleared, you submit a full disclosure package that includes returns, information returns, FBARs, and cooperation with the IRS review.
When VDP is appropriate:
VDP is designed for willful or high-risk situations – cases where you knew about the filing requirement and chose not to comply, or where the facts could reasonably be interpreted that way. It might also be the right path if you have unreported income from foreign sources that could draw criminal scrutiny, or if you've already been through a "quiet disclosure" attempt that failed.
The penalties under VDP are significant. You'll face civil fraud penalties and willful FBAR penalties, but the trade-off is a lower chance of criminal prosecution. For people facing serious exposure, VDP is often the safest option – even though it's the most expensive one.
Delinquent FBAR submission procedures
If your tax returns were correct but you forgot to file FBARs, the Delinquent FBAR submission procedures might be the closest thing to what people mean by "FBAR amnesty."
This path works when you reported all your income and paid the tax you owed, but you simply didn't know about – or forgot – the FBAR requirement. The IRS lets you file the late forms with a short explanation, and if you meet the conditions, it will not impose an FBAR penalty.
Two conditions you must meet:
- No underreported income – Your tax returns are already correct and complete
- No IRS contact – The IRS hasn't reached out about these accounts or opened an examination
How to file:
- File electronically via FinCEN – Use the FinCEN BSA E-Filing System
- Include a late-filing explanation – Attach a statement explaining why the FBARs are late
- Choose the correct reason code – Select from the dropdown menu
- Keep records – Save your submission confirmation
Delinquent international information return submission procedures (DIIRSP)
If you missed filing international forms but reported the income and paid your taxes, the Delinquent International Information Return Submission Procedures – or DIIRSP – provide a path forward. This program covers late forms like Form 5471 (foreign corporations), Form 3520 (foreign trusts and gifts), Form 8938 (foreign financial assets), and Form 926 (property transfers).
You file the late forms with amended or late returns, along with a reasonable-cause statement explaining why the forms are late. The IRS reviews each case individually.
Important: Unlike the FBAR procedures, penalties aren't automatically waived under DIIRSP. The IRS can waive them if you show reasonable cause, but weak explanations or any tax underreporting can still trigger penalties.
Relief procedures for certain former citizens
This path helps former citizens with low net worth and simple cases. If you relinquished US citizenship and meet the IRS thresholds, you can file six years of returns and close out all filing duties with no extra fines.
Who this is really for:
This program is designed for “accidental Americans” – people who became US citizens by birth but never lived in the US or maintained meaningful ties. If you gave up citizenship and your situation was straightforward, this might be your cleanest exit.
What you need to qualify:
- Net worth less than $2 million at the time of expatriation
- Aggregate US tax liability of $25,000 or less for the five years before expatriation, plus the year of expatriation itself
What you file:
You submit six years of tax returns plus the required expatriation forms (typically Form 8854). If you meet the criteria, you avoid the exit tax and all associated penalties.
Federal tax amnesty program: is there one?
Not exactly. There isn't one single universal “federal tax amnesty program” that covers all US taxpayers in every situation.
What exists instead are specific IRS compliance procedures designed for different circumstances: Streamlined Filing Compliance Procedures for non-willful offshore cases, Delinquent FBAR Submission Procedures for late FBARs, VDP for higher-risk situations, and Relief Procedures for Certain Former Citizens.
Each of these serves a different purpose, so the right “amnesty” path depends on your specific facts.
Comparison table of IRS amnesty and relief paths
Here's how the main programs compare at a glance:
| Program | Who qualifies | What you file | Typical penalty outcome | Key gotcha |
|---|---|---|---|---|
| Streamlined Foreign Offshore Procedures (SFOP) | You lived outside the U.S. (meet non-residency test) and your noncompliance was non–willful | 3 years amended/late tax returns + 6 years FBARs + Form 14653 (non–willful certification) | 0% offshore penalty (but you still pay any tax + interest due) | If the IRS thinks facts look willful, you can be removed from streamlined and face much higher exposure |
| Streamlined Domestic Offshore Procedures (SDOP) | You’re a U.S. resident (don’t meet SFOP non-residency) and noncompliance was non–willful | 3 years amended/late tax returns + 6 years FBARs + Form 14654 (non–willful certification) | 5% offshore penalty on in-scope foreign financial assets (plus any tax + interest) | The 5% base can be misunderstood; also, incomplete asset lists or inconsistent facts can create big risk in review |
| Delinquent FBAR Submission Procedures (DFSP) | You have late/missing FBARs but reported and paid tax on all income, and the IRS hasn’t contacted you about the accounts | Missing FBARs (FinCEN Form 114) + explanation for lateness (no amended 1040 needed if tax reporting was correct) | IRS says it will not impose an FBAR penalty if you meet conditions (still possible if facts don’t fit) | If there’s unreported income, DFSP is the wrong path – streamlined or another route may be needed |
| Delinquent International Information Return Submission Procedures (DIIRSP) | You didn’t file required international forms (e.g., 3520/5471/8938) but reported income and paid tax, and have reasonable cause | Late international information returns (with a reasonable-cause statement); typically filed with amended/late returns as needed | Penalties may be waived, but IRS can still assess penalties depending on facts/review | Not an “automatic amnesty” – weak reasonable-cause statements or tax underreporting can trigger penalties |
| IRS Criminal Investigation Voluntary Disclosure Practice (VDP) | You have willful / high-risk facts (e.g., intentional nonreporting) and want to proactively come into compliance | Preclearance request then a full disclosure package (returns/information returns/FBARs, cooperation) | Not penalty-free: designed to reduce criminal risk, with significant civil penalties still possible | It’s a process, not a form. Timing matters; if IRS is already onto the issue, options can narrow |
| Relief Procedures for Certain Former Citizens | You relinquished citizenship and meet IRS thresholds (e.g., net worth < $2M and tax liability cap) and you were noncompliant | Specific compliance package for prior years + required forms tied to expatriation status | Designed to provide penalty/tax relief if you meet strict criteria | Very eligibility-driven; if thresholds aren’t met, you may need a different approach |
Benefits of using the IRS tax amnesty programs
The IRS tax amnesty programs make the path back to compliance clear and manageable. As Wendy Christiansen, CPA, says, “This is an amnesty program – it’s a way to get into compliance with the IRS without penalties.”
- An IRS amnesty program can cut huge fines, and many people using streamlined procedures pay only tax and interest on past unreported income instead of facing sharp FBAR and late-file penalties.
- When a case looks willful, a voluntary disclosure can lower the risk of charges and stop harsh actions like seizures or fast collection steps.
- Fixing old non-compliance gives you a clean tax record, which helps with loans, audits, and even future plans to leave the US for good.
- Once filings are fixed, each tax year becomes simple, steady, and stress-free, which makes long-term planning far easier.
Important: Interest keeps accruing even when penalties are reduced – the sooner you act, the less you’ll pay.
How to apply for IRS tax amnesty (step-by-step)
Getting back into compliance isn't as complicated as it seems once you know the steps. Here's the process in six clear stages:
Step 1 – Choose your path
Review the eligibility rules for each program – streamlined (SFOP or SDOP), DFSP, DIIRSP, VDP, or relief for former citizens. If you're unsure which one fits, work with a CPA who specializes in compliance cases. The wrong choice can delay your case or trigger deeper scrutiny.
Step 2 – Collect your records
Gather bank statements, foreign account records, income documents, prior-year tax returns (if you filed any), and any correspondence from the IRS. You'll need a complete picture of your financial activity for the years you're fixing.
Step 3 – Prepare returns and forms
File the required number of amended or original tax returns (typically three years for streamlined procedures), plus all missing FBARs (typically six years), plus any required international information returns like Form 8938, Form 5471, or Form 3520.
Step 4 – Write your certification or statement
If you're using streamlined procedures, you must complete Form 14653 (SFOP) or Form 14654 (SDOP) with a clear, honest explanation of why your non-compliance was non-willful. If you're using DFSP or DIIRSP, include a statement explaining why the forms are late. This step is critical – weak or inconsistent explanations can disqualify you.
Step 5 – File the package
Follow IRS instructions carefully. Streamlined submissions typically go by mail to a specific address. FBARs must be filed electronically through FinCEN. VDP requires preclearance before submission. Double-check addresses, signatures, and required attachments.
Step 6 – Keep filing going forward
Once you're back in compliance, stay there. File your returns on time every year, report all foreign accounts on FBARs, and keep up with any required information returns. Future filings are much simpler once your compliance history is clean.
Risks of using the IRS tax amnesty programs
Think of someone who steps forward to fix old tax gaps and hands the IRS a complete set of facts. Once the IRS sees that file, they can look deeper. That simple act can open the door to more scrutiny, costs, or limits that shape how the case unfolds.
What can disqualify you:
- IRS contact or audit already underway
- Facts that show willful conduct (when you're applying to a non-willful program)
- Incomplete package or missing years
- Inconsistent or contradictory non-willful statement
Don't DIY if:
- You have high unreported income (€100K+)
- You own foreign entities, trusts, or partnerships
- You previously made a "quiet disclosure" (filed without using official procedures)
- You're not sure whether your conduct could be considered willful
- You have complex investments or accounts in multiple countries
Common mistakes to avoid
| Mistake | What happens | Safer move |
|---|---|---|
| Using DFSP when there’s unreported income | DFSP may not apply; higher review/penalty risk | Switch to Streamlined (SFOP/SDOP) or VDP (fact-dependent) |
| Prior quiet disclosure + then filing Streamlined | Can look suspicious; more scrutiny | Disclose full history; pick one coherent path (often Streamlined/VDP) |
| Thin/inconsistent non-willful statement | Credibility issues; deeper review | Write a clear timeline: what happened → why → what changed |
| Missing accounts/assets in your inventory | Wrong penalty base; “incomplete package” risk | Do a full inventory (all accounts, entities, pensions, crypto if relevant) |
| Choosing the wrong lane (SFOP vs SDOP) | Rework, delays, worse outcome | Confirm non-residency criteria before filing |
| Wrong year coverage (not 3 yrs returns + 6 yrs FBARs) | The package doesn’t match the program rules | Build a “years matrix” first |
| Fixing FBAR but missing Intl forms (8938/5471/3520, etc.) | Penalty exposure remains | Run a forms checklist by asset/entity type |
| Submission errors (signatures, statements, wrong address) | Delays or rejection | Use a final submission checklist + proof of filing |
| Thinking “amnesty” = no tax | Surprise tax/interest bill | Estimate tax early; plan payment options |
| Filing after IRS contact/audit | Options may narrow | Stop and reassess immediately before submitting anything |
IRS tax amnesty programs FAQ
Yes. Some IRS tax amnesty programs and relief rules can help small firms, companies, and other entities, especially for missed forms and payroll issues. But most of the programs we’ve covered today are built for individuals, not large corporations.
If the IRS has already sent you a letter or started an audit, some programs may no longer be open. The streamlined procedures and FBAR relief paths usually require that you’re not already under examination. In that case, you still have options, but you need a plan fast especially if any items might look willful.
There’s no single deadline for every IRS tax amnesty program. But programs can change, and interest grows every month you wait. If you know there’s non-compliance, it’s almost always better to act soon, before the IRS reaches you first.
No. An IRS amnesty program is not a free pass. You’ll still pay the real tax and interest. The amnesty part is about relief on penalties and, in some cases, a lower risk of criminal action in willful cases. The good news is that, for many expats and simple late filers, the final bill is far less painful than they feared.
Follow the six-step process outlined above: choose your path, collect records, prepare returns and forms, write your certification or statement, file the package according to IRS instructions, and keep filing going forward. If you’re unsure about any step, work with a CPA who specializes in compliance cases.
Yes. You need a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to file US tax returns. If you don’t have one yet, apply for an ITIN first using Form W-7. The process can take several weeks, so start early.
