# Foreign Offshore Streamline or Regular Amendments



## sw2b

*Streamlined Foreign Offshore Procedures or Regular Amendments*

I would like to get advice/ help in regard to filing US tax as expat and exit tax for Green Card relinquishment.

I am Japanese citizen with Green Card (more than 8 years) who currently lives in Sweden with non-resident-alien husband. I am planning to relinquish Green Card in 2017. Based on my research about the relinquishment, I need to file Forms 1040 and 1040NR with 8854, and I should avoid being covered expatiate for the exit tax reason. However I am not sure of whether I can say yes to the tax compliance test in Form 8854 because I know that I have made some mistakes on tax returns in previous years. To comply with the test, I believe that it is better for me to amend previous tax returns and FBARs before I will start processing my Green Card relinquishment. 

I believe that there are two different approaches to clean up my mistakes: 1) Streamlined Foreign Offshore Procedures or 2) file just regular amendments 1040x and additional FBARs. I do not know which approach is less risk for me in a term of penalty (hopefully no penalty at all). I would like to get any advice if possible.

The following mistakes on previous taxes that I am aware of are:

A. One year I didn't check yes box to disclose foreign accounts in Schedule B even though I filed FBARs.

B. For three year tax returns, I have filed FBARs for two of my foreign bank accounts, but I forgot to disclose others (in Japan) because I don't use them daily basis. Each undisclosed account is about $10k and collects very minimum interests. 

Both approaches require me to file delinquent FBARs so I have questions with the procedure. Can I file FBARs for the additional undisclosed accounts with a reason of "didn't know" even though I have filed FBARs for other accounts and knew about the FBAR? Or is it better to file with a reason of "other" and explain that I don't use the accounts and I forgot? 

C. For two year tax returns, I have filed with a wrong status. I should have filed as married filed separately, not single.

D. I have received maternity leave benefits and school allowance from local government in Sweden (social benefits). I have never included them as my income because I thought that Sweden and US treaty exempts social benefits. After reading threads here, I am not sure of whether I need to include them as income or not. Do I need to include them?

Other information about me may be helpful to asses the situation.
My aggregate asset (about $120k as foreign assets) is below exit tax threshold of $680k (even if I was a covered expat, I would not be subject to the exit tax?).
I have been away from USA since Oct 2011. 

Please give me some advice on which approach is better and some directions to my questions above.

Thank you for your time in advance,
Sw2b


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## Bevdeforges

If you are currently living outside the US, why are you waiting until 2017 to relinquish your green card? You've been outside the US since 2011 - you should really surrender your green card first and work out the tax consequences after the fact.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> If you are currently living outside the US, why are you waiting until 2017 to relinquish your green card?


There could be _many_ reasons to delay, including getting in some much more reliable U.S. visits. It don't think that's a particularly controversial idea.



> You've been outside the US since 2011 - you should really surrender your green card first and work out the tax consequences after the fact.


That's possible, but I think the original poster is quite prudent in asking about those tax consequences first before embarking on what is an absolutely irrevocable and sometimes costly act.

That all makes sense to me without elaboration, but if the original poster wants to elaborate, that's OK, too. Read on for my next reply....


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## BBCWatcher

sw2b said:


> I am planning to relinquish Green Card in 2017. Based on my research about the relinquishment, I need to file Forms 1040 and 1040NR with 8854, and I should avoid being covered expatiate for the exit tax reason.


If you relinquish in 2017 then, in tax year 2017 (meaning, sometime in 2018) you would file your last U.S. tax return for non-U.S. source income. (You would still keep filing U.S. tax returns -- 1040NRs -- if you have U.S. source income. So a caution here: if you expect future U.S. source income, such as retirement or Social Security income, then relinquishment won't necessarily eliminate all U.S. tax filing requirements.) The year 2017 would be your "dual status" tax year as IRS Publication 519 explains.

Note that the determination of whether you are subject to the U.S. Expatriation Tax (whether you are a "Covered Expatriate") will depend on your total worldwide net worth on the date of relinquishment/renunciation. See below for more on that subject.



> However I am not sure of whether I can say yes to the tax compliance test in Form 8854 because I know that I have made some mistakes on tax returns in previous years.


You would be lying if you did, a criminal offense, which is really why that form exists (and why Congress mandates it), so I wouldn't recommend it until you get things cleaned up. But fortunately that should be pretty easy to do....



> I believe that there are two different approaches to clean up my mistakes: 1) Streamlined Foreign Offshore Procedures or 2) file just regular amendments 1040x and additional FBARs. I do not know which approach is less risk for me in a term of penalty (hopefully no penalty at all).


I don't think there's any harm in trying to take advantage of the IRS's Streamlined Foreign Offshore program. But either way the amount of U.S. tax owed plus interest and penalties is unlikely to be much. The Streamlined Program waives penalties if you're accepted.



> A. One year I didn't check yes box to disclose foreign accounts in Schedule B even though I filed FBARs.


That's not a problem by itself. If that was your only problem, you wouldn't worry about it. You would only correct this problem if you're going to correct another error on the same tax return.



> B. For three year tax returns, I have filed FBARs for two of my foreign bank accounts, but I forgot to disclose others (in Japan) because I don't use them daily basis. Each undisclosed account is about $10k and collects very minimum interests.


OK, this is where the problem is, but it's a small problem. To correct this problem you would start by filing amended FinCEN Form 114s (whether you use the Streamlined Program or not), since that's the first compliance step no matter which path you take. We have not yet heard any reports of the U.S. Treasury Department assessing any penalties for _voluntary_ late filing.

Then you would report the income through either the Streamlined Program or simple amended tax returns (1040X). Let's suppose the interest is 40,000 yen per year, but that's after your Japanese interest tax is withheld. I think the Japanese bank interest tax is 15.315% starting in 2013 (please check me on that). So, you would report the gross interest on Schedule B of an amended tax return. The gross interest would be 40,000 yen divided by (1 minus 0.15315), or 47,234 yen. Then you would convert 47,234 yen to U.S. dollars and put the U.S. dollar amount on Schedule B.

But, you paid Japanese income tax (bank interest withholding tax) on that income. So you can also file IRS Form 1116 to take a Foreign Tax Credit (or an amended Form 1116 if you already filed that form for passive category income). In this example you would report 7,234 yen (converted to U.S. dollars) as the foreign income tax you paid in that year. If your U.S. tax rate was equal to or less than 15.315% on that income then you don't owe any more U.S. tax.

There might also be a tax treaty between the U.S. and Japan that makes this interest completely U.S. tax free, assuming the savings clause does not apply to you. But the tax treaty would still require you to file FinCEN Form 114. So check the U.S.-Japan tax treaty to see what it says.



> Can I file FBARs for the additional undisclosed accounts with a reason of "didn't know" even though I have filed FBARs for other accounts and knew about the FBAR?


If that answer is truthful, yes. Just answer that question truthfully.



> C. For two year tax returns, I have filed with a wrong status. I should have filed as married filed separately, not single.


Yes, that's a problem that'll need to get cleaned up. Although unlikely, also check to see if you can use "Head of Household" filing status. (Maybe not, but it's worth checking to see if you can.) "Single" effectively reduces your U.S. tax rate versus "Married Filing Separately," so that error is a bit of a problem. (But it may not be a significant problem, especially if you've been living in Sweden this whole time with its comparatively higher income tax rates. Or if your income was almost all covered by the Foreign Earned Income Exclusion.)



> D. I have received maternity leave benefits and school allowance from local government in Sweden (social benefits). I have never included them as my income because I thought that Sweden and US treaty exempts social benefits. After reading threads here, I am not sure of whether I need to include them as income or not. Do I need to include them?


Use IRS Publication 525 to help answer that question, particularly the section on "Welfare and Other Public Assistance Benefits."



> Other information about me may be helpful to asses the situation.
> My aggregate asset (about $120k as foreign assets) is below exit tax threshold of $680k (even if I was a covered expat, I would not be subject to the exit tax?).


No, the threshold is $2 million. _Then_ you get a $680K (increased annually for inflation) exemption on the gains calculation. So if your total worldwide net worth is $120K, you will not be a "Covered Expatriate" and not subject to the U.S. Expatriation Tax.



> I have been away from USA since Oct 2011.


That means you've lost the benefits of U.S. permanent residency since you've been away too long, but you still have the ordinary tax obligations. _Usually_ it's prudent to terminate those tax obligations as well in these circumstances, but there are some rare, exceptional cases when you have U.S. source income and being subject to ordinary U.S. tax and financial reporting obligations is more favorable. (U.S. source income is often subject to tax withholding once you relinquish/renounce.) I'll assume it's better to terminate those ordinary tax obligations and flip to true "foreigner" status.

Chances are quite good that re-running the calculations will show that you still don't owe any more U.S. income tax. If you don't owe any more U.S. income tax then there's no interest and no penalty. If you didn't owe U.S. income tax when you filed the first time, then the two chances (correcting your filing status, and correcting the unreported small amount of bank interest) probably won't change that fact. So I think this is going to be a very low cost or zero cost process for you to get everything tidied up nicely. I could be wrong, but I'm optimistic.


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## BBCWatcher

By the way, you are not _required_ to take the Foreign Tax Credit to account for that Japanese income tax you paid on your Japanese bank interest. If Form 1116 is too troublesome, and you're happy with the results without it, no problem, you can skip that particular form.

Note that Foreign Tax Credits can be applied to future tax years, up to 10 years into the future, to offset U.S. income tax within the same income category. So if you're expecting some future U.S. income tax, then it might still be worth taking a trip through Form 1116 to get that credit "banked." But there's not much income tax here, so it's probably not worth worrying about much.


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## Bevdeforges

BBCWatcher said:


> There could be _many_ reasons to delay, including getting in some much more reliable U.S. visits. It don't think that's a particularly controversial idea.


I would be careful if trying to get in "more reliable U.S. visits" - it's entirely possible that Immigration Services can and will deny entry to the US on an invalidated green card - or at the very least give you a very difficult time. (And the green card is invalid if the holder has not been resident in the US for over a year.)

On the tax issues, if none of the omissions or "technical errors" result in additional taxes due, it's possible to say in good conscience that you have fulfilled your obligations by filing. And no, according to pub 525, "public assistance" benefits are not considered income and do not need to be reported on your US tax forms.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> I would be careful if trying to get in "more reliable U.S. visits" - it's entirely possible that Immigration Services can and will deny entry to the US on an invalidated green card - or at the very least give you a very difficult time.


That wasn't what I had in mind, actually.



> On the tax issues, if none of the omissions or "technical errors" result in additional taxes due, it's possible to say in good conscience that you have fulfilled your obligations by filing.


I wouldn't share that interpretation when it comes to FinCEN Form 114.


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## sw2b

First, I would like to say thank you all for your detailed advice with very clear explanations. 



> Originally Posted by Bevdeforges View Post
> If you are currently living outside the US, why are you waiting until 2017 to relinquish your green card?


The earliest year that I can amend my tax return is only from 2012 because I filed my 2011 tax return with my ex and he does not want to co-sign the amendment with me. To comply with the 5 year tax compliance test in Form 8854, I can relinquish my Green Card earliest in 2017. I wish I can relinquish earlier. 

Based on advice from this thread, I should calculate my back taxes first and then file FBARs as a part of the Streamlined Foreign Offshore Procedures process. In the case, should I do the following? I just want to be sure.

Before April 15, 2016, amend 2012, 2013, and 2014 tax returns by using Form 1040x and file delinquent FBARs for 2009, 2010, 2011, 2012, 2013, 2014 and then file 2015 tax return and FBARs (if I relinquish Green Card in 2017).

Other question in regard to Form 2555 and 1116
I am confused on how to file Form 2555 and 1116. I read that I cannot use Form 2555 and 1116 back and forth unless there is a situation. I wonder if my situation can be allowed to use both or switch from Form 2555 to 1116.

My situation: 
In 2012, I received salary from a US company (W-2 income) while I was in Japan.

In 2013, I received salary from a US company for 1 month (W-2 income) and from Japanese company for 3 months (foreign income in Form 2555) while I was in Japan. 

Due to my income in 2012, I believe that I have some back taxes for the interest from the Japanese bank account. Even though it may be too much work to calculate, it may be better and cleaner so that I do not owe any tax to IRS in both situations: previously and with the amendment. With 2012 tax amendment, can I file Form 1116 even though I previously filed Form 2555 for the 2013 tax return? 

In addition to Form 2555 that I previously filed for the 2013 tax return, can I use Form 1116 for the delinquent interest from the Japanese account?

Just notes:
Based on my research, I am still subject to US tax according to IRS until I file I-407 (Record of Abandonment of Lawful Permanent Resident Status) to the nearest embassy even if Green Card expires. 

When I will start filing 1040x, I will probably have more questions and post them here or create new thread.

Thank you for your time and consideration.


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## BBCWatcher

sw2b said:


> Based on advice from this thread, I should calculate my back taxes first and then file FBARs as a part of the Streamlined Foreign Offshore Procedures process.


Well, the FBAR issue is the more serious one in terms of published penalties. So that's actually the first thing to resolve since it's the same step with or without the Streamlined Program. Fortunately you shouldn't have to pay any penalty for voluntary, unprompted filing of those FinCEN Form 114s.



> Before April 15, 2016, amend 2012, 2013, and 2014 tax returns by using Form 1040x and file delinquent FBARs for 2009, 2010, 2011, 2012, 2013, 2014 and then file 2015 tax return and FBARs (if I relinquish Green Card in 2017).


Not exactly. You're already past the deadlines to file _correct_ tax returns and FBARs for tax year 2014 and prior. So there's no deadline of April 15, 2016 here. If you intend to get compliant you should do so as soon as you reasonably can, i.e. "now," starting with the FBARs. Theoretically the Treasury Department could send you a letter tomorrow inquiring about the missing accounts in your FBARs, and they would likely assess penalties if they contact you before you file amended FBARs. If you owe any U.S. tax from those prior years the interest and penalties continue to accrue the longer you wait. So "now" is a good time to take care of those issues, starting with the FBARs since that's the more potentially serious, and they also happen to be very easy to correct.

Your 2015 tax return is due (at the IRS) on June 15, 2016, assuming you attach the simple overseas residency statement described in IRS Publication 54. (Your deadline to pay any outstanding U.S. tax for 2015 is still April 15, 2016.) You can obtain an extension of that filing deadline to October 15, 2016, if you file IRS Form 4868. (I recommend that. It can't hurt, other than the cost of a postage stamp.) Your 2015 FinCEN Form 114 is due June 30, 2016. (I don't think the deadline for FinCEN Form 114 follows the tax deadlines yet, but that change is coming in future tax years.) So you've still got plenty of time to worry about 2015.

If you're relinquishing/renouncing sometime in 2017 then you'll also have 2016 and 2017 tax and financial filings in your future.



> I am confused on how to file Form 2555 and 1116. I read that I cannot use Form 2555 and 1116 back and forth unless there is a situation.


OK, there are two separate issues here. Yes, you are correct that when you take the Foreign Earned Income Exclusion (FEIE, IRS Form 2555) then, if you stop taking the FEIE when eligible for it, you cannot then switch back to taking the FEIE in a subsequent tax year without getting special permission from the IRS. _For your foreign earned income_ (only) you have to be consistent in your choice.

However, using Form 2555 to exclude your foreign earned income does not mean you cannot also use Form 1116. You can still use Form 1116, but it would be only for your other income and for your foreign earned income (if any) above the exclusion limit. You are not required to take the Foreign Tax Credit (Form 1116) in a particular tax year. You can take the FTC in 2012, not in 2013, then in 2014, etc. -- that's allowed (even if it's hard to understand why you'd do that, but allowed). But the FTC only deals with non-FEIE income.

Did all that make sense?



> In 2012, I received salary from a US company (W-2 income) while I was in Japan. In 2013, I received salary from a US company for 1 month (W-2 income) and from Japanese company for 3 months (foreign income in Form 2555) while I was in Japan.


OK, it doesn't actually matter _where you were paid_, into what bank account. What matters is _where you worked_ -- where you were physically located when you provided services to your employer(s). You wrote that you haven't stepped foot inside the United States since October, 2011 (as I recall), so that means you can take the FEIE for all of your earned income in all of 2012 and 2013 (and even part of 2011 as well) since you were not physically present inside the United States. The major exception to this general rule is if you worked for some part of the U.S. government while you were outside the United States.

So "no problem." The tiny bit of interest income you received is unlikely to have any effect on your (likely zero) U.S. tax obligation for 2012 onward. But yes, you can use Form 1116 to take into account the Japanese tax that you paid on your Japanese bank interest. Bank interest is not earned income, so it cannot be part of Form 2555. Anything that is outside Form 2555 can still use Form 1116.

Just to explain Form 1116 a bit further, you actually file a separate Form 1116 for each category of income where you have a Foreign Tax Credit to take. The instructions to Form 1116 explain what the FTC income categories are. As a simple example, let's suppose you earned $150,000 from work (while you were in Sweden, let's suppose) and received $100 in Japanese bank interest, and that's your total worldwide income. In this example, assuming you take the Foreign Earned Income Exclusion, you would file:

1. Form 2555 (to exclude the first part of your $150,000 in earned income in Sweden up to the limit, approximately $100,000)
2. Form 1116 number 1 (to take a Foreign Tax Credit for the Swedish income tax paid on the approximately $50,000 of earned income above the FEIE limit)
3. Form 1116 number 2 (to take a Foreign Tax Credit for the Japanese income tax paid on your Japanese bank interest)

This looks a little bit confusing, but yes, that's how it works. In this example you end up attaching two 1116s to your tax return because you have two FTC categories of income.

As a reminder, tax preparation software (such as the free editions of TaxAct, TaxSlayer, etc.) is really helpful and much easier than filling out the forms manually.



> Based on my research, I am still subject to US tax according to IRS until I file I-407 (Record of Abandonment of Lawful Permanent Resident Status) to the nearest embassy even if Green Card expires.


Correct. The U.S. requires long-term permanent residents to take specific action to "check out," even if their actual permanent residency has lapsed due to long absence from the U.S. or some other reason. You mentioned you plan to relinquish sometime in 2017.


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## sw2b

I have another question in regard to Form 2555. 

My employer in US sent me to Japan for 14 months (I went back to USA about 5 days for business trips during the time) and deposited paychecks to my US bank directly. My employer withheld a little US tax on the income, and I was qualified to receive 401K during the time. 

In this case, am I qualified to use Form 2555 for foreign earned income even though I did not pay any foreign tax on the income during the time? It is probably no, but I just want to make sure of that I am not missing anything to reduce tax. 

Thank you,


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## BBCWatcher

sw2b said:


> In this case, am I qualified to use Form 2555 for foreign earned income even though I did not pay any foreign tax on the income during the time?


Perhaps you should have paid foreign (Japanese) tax. (How do you work in Japan for 14 months without owing Japanese tax? That seems...odd.)

That said, and regardless of the answer to that question, you appear to qualify for the FEIE under the physical presence test for that period of time. I don't see any impediment, assuming your employer is an "ordinary" employer -- not the U.S. government, as one example.

That also said, if you owe Japanese income tax, you'll probably want to explore taking the Foreign Tax Credit and not the FEIE. The Japanese tax is likely higher, but you should be able to "recover" the higher tax as credits against your U.S. income tax owed. You can carry such credits forward (and/or one year backward) if necessary.


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## Bevdeforges

The fact that you were working outside the US for at least 12 consecutive months means that you can use form 2555 to exclude your earned income from US taxation. If taxes were withheld on that income, you should be able to get them refunded. There is no requirement that you pay foreign taxes on that income.

However, your 401K contributions may not be deductible during the time you were outside the country. But check here: https://www.irs.gov/Retirement-Plans/401k-Plans If you exclude your total salary (i.e. earned income) using the 2555 form, that may affect your ability to participate in the plan. (The rules keep changing, but that's how I understood them to be a few years ago.)
Cheers,
Bev


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## sw2b

I started preparing amendments and FBARs for previous years. I am done with FBARs now. 

As part of Streamlined Foreign Offshore Procedures, I must attach Form 14653 (which I couldn't download the most recent one rev 2016 from IRS so I googled it) and read it through. Now I have a new concern about 330 days requirement. I am not sure of whether I can be qualified to file Streamline Foreign Offshore Procedures because I don't know whether my situation can be qualified to call my adobe was in Japan for 2012 tax return and I also did not claim Foreign Tax Exclusion for 2012 tax return even though I was in Japan entire 2012. 

I don't know whether it really matters or not as long as I can show the proof of I was in Japan in 2012. 

My situation is as following: 
I was working in Japan entire 2012, and I received salary and 401K from US company. I filed US tax without claiming Foreign Tax Exclusion because I did not pay Japanese tax. I kept my driver license and bank accounts in USA. 

I need your suggestion/ opinion on whether I am qualified to file Streamline Foreign Offshore Procedures or not.

If anyone who has a copy of Form 14563 Rev 2016, please share with me. I cannot download it from IRS website even after I updated Adobe on my computer.

Thank you


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## Bevdeforges

Neither the physical presence test, nor the bona fide residence test requires anything about having taken (or not) the FEIE, nor do you have to have actually paid tax to the jurisdiction where you were living at the time. Physical presence is based upon your having been physically present outside the US for 330 days in a period of 12 consecutive months.

I get the same error message when trying to download the form. In my case, it's because I'm on Linux and Adobe doesn't seem to make its software available for Linux systems any more, so the "latest edition" won't work.
Cheers,
Bev


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## sw2b

Thank you.
I could open the form only with Internet Explore.

I have some other questions in regards to Form 14653 rev 2016.
The statement that I need to provide in the form:
_Provide specific reasons for your failure to report all income, pay all tax, and submit all required information returns,including FBARs. Include the whole story including favorable and unfavorable facts. Specific reasons, whether favorable or unfavorable to you, should include your personal background, financial background, and anything else you believe is relevant to your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Additionally, explain the source of funds in all of your foreign financial accounts/assets. For example, explain whether you inherited the account/asset, whether you opened it while residing in a foreign country, or whether you had a business reason to open or use it. And explain your contacts with the account/asset including withdrawals, deposits, and investment/management decisions. Provide a complete story about your foreign financial account/asset. If you relied on a professional advisor, provide the name, address, and telephone number of the advisor and a summary of the advice. If married taxpayers submitting a joint certification have different reasons, provide the individual reasons for each spouse separately in the statement of facts. The field below will automatically expand to accommodate your statement of facts. Under penalties of perjury, I declare that I have examined this certification and all accompanying schedules and statements, and to the best of my knowledge_

Do you think my statement below is acceptable?

I am Japanese citizen and green card holder. I did not know that I needed to include interests from bank accounts in Japan, my country, as US income and file FBARs for them. Based on the tax return amendments, the amounts of tax that I owe did not change after adding interests from banks in Japan. My XX Bank account was opened by my parents when I was young. I do not use the account regularly. After I moved back to Japan in 2011, I opened YY account for basic living use such as paying bills.


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## Bevdeforges

That's probably more than adequate. Most folks use a simple "I didn't realize I had to include non-US source income" and are done with it.
Cheers,
Bev


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## iota2014

Bevdeforges said:


> That's probably more than adequate. Most folks use a simple "I didn't realize I had to include non-US source income" and are done with it.
> Cheers,
> Bev


Unfortunately the revised form requires a much more detailed statement:



> Note: You must provide specific facts on this form or on a signed attachment explaining your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Any submission that does not contain a narrative statement of facts will be considered incomplete and will not qualify for the streamlined penalty relief.
> 
> Provide specific reasons for your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Include the whole story including favorable and unfavorable facts. Specific reasons, whether favorable or unfavorable to you, should include your personal background, financial background, and anything else you believe is relevant to your failure to report all income, pay all tax, and submit all required information returns, including FBARs. Additionally, explain the source of funds in all of your foreign financial accounts/assets. For example, explain whether you inherited the account/asset, whether you opened it while residing in a foreign country, or whether you had a business reason to open or use it. And explain your contacts with the account/asset including withdrawals, deposits, and investment/management decisions. Provide a complete story about your foreign financial account/asset. If you relied on a professional advisor, provide the name, address, and telephone number of the advisor and a summary of the advice. If married taxpayers submitting a joint certification have different reasons, provide the individual reasons for each spouse separately in the statement of facts. The field below will automatically expand to accommodate your statement of facts.


Quite daunting.


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## Bevdeforges

Probably more daunting for those who have filed something but simply omitted the non-US source income. For those who haven't filed at all, the specific reason is very often "I didn't know I had to." Just don't give more detail than you are asked for.
Cheers,
Bev


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## sw2b

Thank you for your help. Now I amended 2012, 2013 and 2014 tax forms and FBARs through the Streamlined Foreign Offshore Procedures, and all amendments were accepted. 

I have some other questions in regards to Form 8854 and other. 

Just give you brief information about my situation. My goal is to abandon my Green Card in 2017. Due to my personal reason and compliance with Form 8854 question Part IV Section A 5 (tax compliance test), I cannot abandon my Green Card earlier than 2017. I had some discrepancies/ mistakes in my previous taxes (2012, 2013, and 2014) so I amended them and now they were accepted. In addition, I have filed 2015 tax on time. All I need to do before I abandon my GC is to file 2016 tax (Form 1040) in 2017 and send I 407 sometime in 2017 so I can file 2017 tax (1040NR along with 1040) with Form 8854 in 2018. I am a LTR and non covered expatriate. 

Since all previous taxes have been amended, I have been contemplating about when to send I 407 in 2017. The following questions are, I believe, keys to determine when to send it.


1.	What date should I use for the date of termination of LTR on Form 8854? I have read the Instruction for From 8854, and I am not certain whether the following situation is applicable to me or not. 

“If you were a dual resident of the United States and a country with which the United States has an income tax treaty, the date you commenced to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident of the treaty country and gave notice to the Secretary of such treatment. See Regulations section 301.7701(b)-7 for information on other filing requirements if you are such an individual.”

I have been filing US tax even after I left USA in 2011 and have never filed 1040NR since I obtained Green Card. In 2012 tax form, I used Form 2555. 

What does it mean by the “notice to the Secretary..”? Am I applicable to the situation described above?

2.	When shall I transfer the funds from USA Bank to a foreign one? Can I transfer them now without any trouble when I will file Form 8854? If troublesome, should I transfer them after filling I 407 or 2017 tax form in 2018? 

3. When should I send I 407? I have higher chance to get a job offer in Sweden sometime in April 2017. 

Any advice or sharing experiences will help me. Thank you in advance,


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## JustLurking

Your date of termination for form 8854 will be the date stamped on the I-407 receipt that the US consulate will send back to you once you file it. On my reading you don't qualify for the "notice to the secretary" part for using a tax treaty. To use a treaty you would have to have filed form 8833, and that would go with a 1040NR if you elected to be treated as a non-resident alien. The fact that you have -- as is conventional and usually correct for green card holders -- filed plain 1040 up to now indicates no use of treaty.

(Put differently, if you file a 1040NR and 8833 as a green card holder the US can take this as evidence of you having expatriated yourself, even though you don't and may never file I-407. Fairly ridiculous, but there it is.)

You can transfer the cash out of the US whenever you like. If you are ultra-paranoid you might want to wait until after you have filed the I-407. That way, the US will have no visibility at all of the non-US account into which you put it, since (I believe*) you can omit it on both FATCA and FBAR forms. You could find non-US accounts that are denominated in USD to be helpful here, since these separate the move of cash out of the US from the forex transaction.

(*) My view is that a part-year FBAR/FinCEN 114 only up to the date of 'expatriation' -- in as much as one can 'expatriate' if not actually a citizen in the first place! -- and excluding all after is the appropriate thing to do. When I ditched my own green card I queried the IRS on that point, and they said part-year, though I am fairly sure the IRS respondent made up their answer on the spot. More conservative folk suggest filing an FBAR/FinCEN 114 for the _full_ year of renunciation, but because neither the IRS nor FinCEN has ever ruled on this, as with so much else in US tax law for expats it's up to you to interpret (guess, mind-read).

Note that you don't have to wait until you've filed the 8854 to transfer money as a bona-fide non-resident alien. Your US tax connections end entirely with the filed I-407. The 8854 is just later paperwork, filed after the end of the tax year in which you expatriate.

As for when to send the I-407, sooner is better. If you have no plan to return to the US then spending even one more day than is necessary struggling to comply with convoluted US tax law while not living there is just a pointless and time consuming constriction on your financial life, not to mention a potential dead-weight expense and the danger of life-destroying penalties. If you really can't do it in 2016 for some reason (not clear what that might be, but you may have your reasons), then 1st Jan 2017 looks good to me.


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