Form 14653 (Certification of Streamlined Filing Eligibility)

Form 14653, titled "Certification of Streamlined Domestic Offshore Procedures", is used by U.S. taxpayers who are eligible for the Streamlined Domestic Offshore Procedures (SDOP) to certify their eligibility for this special program. This form is a part of the IRS’s efforts to help taxpayers with undisclosed foreign assets or income come into compliance with U.S. tax laws, especially for those who may not have intentionally evaded taxes.

Overview of Form 14653

The Streamlined Domestic Offshore Procedures (SDOP) are a part of the IRS’s Streamlined Filing Compliance Procedures. These procedures are designed for U.S. taxpayers living in the United States who have failed to report foreign financial assets or income but are not willfully evading taxes. The SDOP is a voluntary program, allowing eligible taxpayers to come into compliance by filing delinquent returns and paying any taxes, penalties, and interest.

Purpose of Form 14653

Form 14653 serves as a certification that the taxpayer is eligible for the SDOP, specifically confirming that:

• The failure to file the required reports (e.g., FBAR (Foreign Bank Account Report) or Form 8938) was non-willful.
• The taxpayer is seeking to correct their tax filings using the Streamlined procedures.
• The taxpayer is aware of their obligations to report foreign income and assets going forward.

Key Sections of Form 14653

1. Taxpayer Certification: The taxpayer certifies that the failure to report the foreign income or assets was non-willful (i.e., not intentional).
2. Details of Non-Willful Behavior: The form requires the taxpayer to provide an explanation for why the failure to file was non-willful, such as misunderstandings or lack of knowledge regarding filing requirements. The taxpayer must provide a clear narrative about how and why they failed to comply with their U.S. tax reporting obligations.
3. Filing Requirements and Penalties: The taxpayer acknowledges that they are required to file delinquent tax returns (Form 1040, including schedules like Schedule B for foreign income) and pay any due taxes, interest, and penalties under the Streamlined procedures. They may also have to file FBAR (FinCEN Form 114) and Form 8938 if they have foreign assets.
4. Failure to Comply in the Future: By signing the form, the taxpayer agrees to continue to meet their future U.S. tax reporting obligations, including reporting foreign financial accounts and income.

Eligibility for Streamlined Domestic Offshore Procedures

Taxpayers who are eligible for SDOP must meet certain criteria:

• Non-Willful Failure: The failure to report foreign income and assets must be non-willful, meaning it was due to a lack of knowledge or misunderstanding, rather than intentional tax evasion.
• Delinquent Filings: The taxpayer must submit all delinquent returns (including any associated forms like FBAR and Form 8938).
• Foreign Assets/Income: The taxpayer must have foreign financial assets or foreign income that was not reported in previous years.
• No Criminal Tax Fraud: The taxpayer must not have been involved in any criminal tax fraud or evasion.