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These procedures are available for nonresident U.S. taxpayers
who have resided outside of the U.S. since Jan. 1, 2009, and who
have not filed a U.S. tax return during the same period. These
taxpayers must present a low level of compliance risk.
The IRS will determine the level of compliance risk presented by
the submission based on information provided on the returns filed,
and based on additional information provided in response to a
questionnaire required as part of the submission. The determination
of low risk will be predicated on simple returns with little or no
U.S. tax due. Absent any high-risk factors, if the submitted
returns and application show less than $1,500 in tax due in each of
the years, they will be treated as low risk and processed in a
streamlined manner.
Taxpayers wishing to use these streamlined procedures must
submit:
complete and accurate delinquent tax returns, with appropriate
related information returns, for the last three years for which a
U.S. tax return is due;
payment of all tax due and owing as reflected on the returns
and statutory interest due and owing;
complete and accurate delinquent Reports of Foreign Bank and
Financial Accounts FBARs for the last six years for which an FBAR
is due; and
a complete, accurate and signed questionnaire.
Any taxpayer seeking relief for failure to timely elect deferral
of income from certain retirement or savings plans where deferral
is permitted by relevant treaty will be required to submit:
a statement requesting an extension of time to make an election
to defer income tax and identifying the pertinent treaty
provision;
for relevant Canadian plans, a Form 8891 for each tax year and
each plan, and a description of the type of plan covered by the
submission; and
a dated statement signed by the taxpayer under penalties of
perjury describing the events that led to the failure to make the
election, the events that led to the discovery of the failure, and
if the taxpayer relied on a professional adviser, the nature of the
adviser's engagement and responsibilities.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Internal Revenue Service has recently published an IRS Large Business & International Directive, which updates an earlier directive to field agents addressing the examination of capitalization and repair costs issues.
A state cannot include income in the apportionable base and then exclude the receipts and related factors that generated that very same income from the apportionment formula.
