On September 1, 2012, the IRS first offered the streamlined offshore voluntary disclosure program to bring non-resident taxpayers back into compliance.  The key factor of the streamlined offshore voluntary disclosure program is that failure to file must not have been willful. As the program proved popular, the IRS has made major changes to the program to make it available to a broader base of taxpayers. First, the taxpayer has to certify that their failure to report foreign financial assets and pay all the tax due did not result from willful conduct on their part. If the failure to file was not willful, the program provides a streamlined process for filing amended or delinquent returns, and terms for resolving the tax penalty obligation. At this point, the program is in place for an indefinite time.
As the program has developed the IRS has made major changes to the streamlined offshore voluntary disclosure program. Originally the program was only available to U.S. taxpayers residing outside of the United States. It is now available taxpayers residing domestically. The service has eliminated the original threshold of $1,500 of back due tax obligations. Under the old process the taxpayer was assigned as high or low risk determination by the IRS after initial review. They have also eliminated the risk assessment process associated with the original program in 2012.
To be eligible for the domestic program, which is virtually identical to the streamlined offshore voluntary disclosure program, you must be a U.S. based individual taxpayer or the estate of an individual tax payer and follow the required procedures. Under the modified rules, you may be a U.S. taxpayer residing inside or outside the United States, but it should be noted that there are different requirements for residents and non-residents. Taxpayers residing domestically will be using the Streamlined Domestic Offshore Procedures. Non-residents will use the Streamlined Offshore Voluntary Disclosure program. All taxpayers will be required to certify, in accordance with the specific instructions set forth below, that the failure to report all income, pay all tax, and submit all required information returns, including FBARs (FinCEN Form 114), was due to non-willful conduct.
A taxpayer is not eligible to use either Streamline program if the IRS has initiated a civil examination of a taxpayer’s returns for any taxable year. This is the policy regardless of whether the examination relates to undisclosed foreign financial assets or other issues with thte return. 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.
If a taxpayers previously filed delinquent or amended returns in an attempt to address U.S. tax and information reporting obligations with respect to foreign financial assets as a quiet disclosures made outside of the streamlined offshore voluntary disclosure program he may still use the streamlined procedures. However, any penalty assessments previously made with respect to the quiet disclosure filings will not be abated.
 Statement of IRS Commissioner John Koskinen, https://www.irs.gov/uac/Newsroom/Statement-of-IRS-Commissioner-John-Koskinen
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