Americans living overseas have been finding it difficult to comply with the U.S. tax laws after the implementation of the Foreign Account Tax Compliance Act (FATCA). After FATCA came into effect, many American expatriates renounced their U.S. citizenship. As a result, the IRS has decreased the penalty for accidental tax evasion while modifying its Offshore Voluntary Disclosure Program (OVDP).
Streamlined procedures for non-residents are referred to as Streamlined Foreign Offshore Procedures. Taxpayers living overseas can gain back compliance and avoid harsh punishment for tax evasion by taking advantage of the OVDP.
If you are an American living overseas and you want to learn about the eligibility factors and the procedure of submission, you can visit the IRS web page: http://www.irs.gov/Individuals/International-Taxpayers/U-S-Taxpayers-Residing-Outside-the-United-States. If you are considering using the OVDP, you need to submit the Offshore Voluntary Disclosure Letter. You can gain access the letter from the IRS website.
As the IRS is making agreements under FATCA with more and more countries, Americans living overseas must ensure that they are in compliance with the U.S. tax laws. The IRS has already made agreements with various countries, including Ireland, Switzerland, Germany, and the U.K., and is expected to make more. Therefore, gaining back compliance through voluntary disclosure is preferable.