Streamlined domestic offshore — meaning in cross-border tax

Residence first, and then the penalty. The domestic route is for non-willful filers resident in the United States; the foreign route is for filers living abroad. The consequence that follows is the one people care about: the domestic route carries a penalty computed on the values of the unreported assets, while the foreign route's requirements are the back filings, the account reports and the signed certification. Which route you are in is therefore established from residence facts for each covered year before anything at all is prepared.

It is computed on the value of the unreported assets rather than on the tax that was underpaid, which is why a file with modest income and a large balance can produce a penalty out of all proportion to the tax. That makes it a valuation exercise as much as a tax one. The work is identifying which assets fall into the base, establishing their values from statements rather than estimates, and documenting the reasoning where an account could arguably sit inside or outside it. Getting the base wrong in either direction is the common expensive error.

Assume they do until it has been checked properly. Accounts held outside the United States come into the assessment whether or not they produce income, whether or not the money was ever taken out, and whether or not tax was already paid where the account sits. Dormant balances, accounts opened by a parent in your name and joint accounts with relatives all belong in the exercise. List every account first and decide reportability second, because a list built the other way round reflects what you assumed rather than what the rules say.

No. The route is built for non-willful conduct, and the certification is where that is set out: what you knew, when, and what you did about it. The word does not describe a moral position; it describes conduct that fell short of a deliberate choice to evade. It is also not a phrase to be adopted casually. The certification is signed, and a narrative that does not withstand comparison with the filings beside it is exactly what turns an application for relief into an examination.

That has to be looked at before anything further is filed. These routes are open only while the disclosure is still voluntary, and an amendment filed on its own can be the event that closes one. Bring what was filed, when it was filed and what it said, rather than a description of it. Sometimes the earlier filings can be accommodated within a submission and explained in the narrative; sometimes they cannot, and the honest answer is that a different route is what remains.

Account statements for each covered year, in the account's own currency, showing values through the year rather than a single closing balance. The returns as they were originally filed. Anything in writing that bears on when you first learned of the reporting requirement. And for anything inherited or gifted, whatever establishes how and when it came to you. Where statements no longer exist, the gap is documented and the basis of any estimate is stated in the file rather than left implicit for someone else to discover.

They overlap but are not the same report. The FBAR goes to FinCEN and covers foreign financial *accounts*; Form 8938 goes to the IRS with the return and covers a wider class of specified foreign financial *assets*, with thresholds that vary by filing status and whether you live abroad. Many people must file both for the same accounts, and satisfying one does nothing for the other. See filing both.

No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.