Can I use streamlined domestic offshore if I live in the US?
The domestic version of the streamlined programme is the one built for filers who are resident in the United States. The foreign version is for filers who are not. Which side you fall on is not a preference, it is a test applied to the years you are catching up on, and it decides the shape of the submission as well as the cost. The domestic route carries a penalty the foreign route does not. So the first piece of work is establishing residence for each year in the catch-up period, because a submission made under the wrong version is not a filing with a small error in it.
What is the streamlined domestic offshore penalty charged on?
It is calculated on the highest aggregate value of the assets that were not reported, not on the tax that was underpaid. That is the single most important thing to understand about this route, because it breaks the intuition that a small tax bill means a small penalty. A dormant account holding a large balance and generating very little income produces a large penalty base and almost no tax. Before anything is submitted, the asset values for every year in scope should be established from statements, because that figure, and not the tax computation, is what the submission will be priced on.
Is streamlined worth it if I do not owe any tax?
It can be, and the reason is that the exposure on these filings does not track the tax. Penalties attach to unfiled reports and to unreported asset values, so a filer whose income was modest or entirely sheltered can still be sitting on a substantial figure while owing nothing. Against that, the domestic streamlined route has a penalty of its own. The comparison worth making is not relief against tax, it is the penalty under this route against the exposure if nothing is done and the position is found later. That comparison needs your actual balances, not a rule of thumb.
How do I show I was non-willful when I file streamlined?
By certification, and the certification has to be built out of facts that the documents support. Non-willfulness is a statement about what you knew and why the accounts went unreported, so it is written from the sequence of events: how the account came to exist, who opened it, what you were told, what your return preparer was asked. A certification drafted as a narrative and then evidenced backwards is the version that fails. Gather the account history, the correspondence and your earlier returns first, and write the certification from what they actually show.
Which years and which forms does the submission cover?
The submission has three parts: amended returns, the account reports, and the certification. The covered period is set by the programme rather than chosen by the filer, and it is not the same period for the returns as it is for the account reports. That is worth confirming in writing before any document is prepared, because a submission that covers the wrong span is incomplete rather than merely late. The practical order is to fix the period first, then reconstruct the balances and income for every year in it, then prepare the returns and the certification together so they say the same thing.
Can I just file the missing forms quietly instead?
Filing the paperwork without going through a route is a decision, not a neutral act, and it is usually made without anyone telling the filer what it costs. The route chosen for the first year affects the relief available for every year behind it, so a set of quiet amended returns can close off the programme that would have capped the penalty. If the forms have already gone in, the position is not necessarily lost, but it has to be reviewed before anything further is sent. Establish what has already been filed and what the authority has already done about it.
Do I need to report a foreign business I own?
Almost certainly, and on more than one form. Canada requires reporting of foreign affiliates on the T1134; the United States has a family of returns keyed to the entity type and your level of control, and several carry penalties that apply whether or not any tax is owed. These are information returns, so the obligation follows the ownership rather than the profit. See T1134.
How would a foreign tax authority know I am resident there?
Mostly from information you or your bank already provided. Account-opening forms ask you to self-certify tax residence, and that certification is reported between authorities under the Common Reporting Standard or, for US accounts, under the FATCA framework. Beyond that: employer and payroll filings, property registries, immigration records and the tax filings of anyone who paid you. The realistic planning assumption is that the data arrives. See FATCA and information reporting.
