THE TRANSATLANTIC MAGAZINE
Adam Smith, a Partner at London tax and advisory firm Blick Rothenberg, has indicated that the IRS streamlined filing procedure, designed to help Americans become compliant with US tax regulations, could be phased out by the IRS during 2020.
Speaking to The American, Smith explained that the procedure is particularly useful for those who weren't aware they owed US tax. Smith said that "The US tax regime requires non-resident citizens to pay full ongoing 'home country' taxation, even if they live or work elsewhere in the world. In fact, every US bi-lateral tax treaty contains a provision protecting the US's right to continually tax income and gains globally. Failure to comply means you could face significant penalties, with up to 50% penalties on undisclosed funds and up to 35% penalties on distributions from foreign trusts. The good news is that there is a measure called the Streamlined Filing Compliance Procedures that allows you to become compliant, and in most cases without facing penalties. The bad news is that this measure is likely to be phased out by the IRS later this year. This is therefore potentially the last chance to take advantage of these filing procedures, so people need to take advice now or they will lose out."
Pointing out particular problems faced by those known as 'Accidental Americans', Smith said "Many Americans don't even realise they are Americans. The Streamlined Programme has been a huge success for both the IRS and delinquent filers. Now is the final opportunity for 'accidental Americans' to bring their affairs up to date."
Blick Rothenberg have created a hub that addresses the particular issues around streamlined filing - for more details, go to www.blickrothenberg.com
Essential Weekly Reads for Overseas Americans. Free