By Lance Morris, MD US Global Tax
For many individuals who unknowingly held U.S. citizenship or were dual nationals unaware of their U.S. tax filing obligations, the discovery can be deeply unsettling. The fear of owing years of back taxes, being hit with penalties, and facing complex compliance hurdles often discourages action. Fortunately, the IRS Relief Procedures for Certain Former Citizens, introduced in September 2019, offer a powerful and penalty-free path to resolve past U.S. tax obligations — with no tax payable, even if the returns show amounts due.
What Are the Relief Procedures?
The Relief Procedures are a special amnesty initiative from the IRS, designed specifically for “Accidental Americans” those who:
- Were born in the U.S. but have lived abroad most of their lives;
- Inherited U.S. citizenship through a parent but never acted as a U.S. taxpayer;
- Renounced U.S. citizenship but did not file prior U.S. tax returns.
The intent is to help individuals become compliant with minimal burden, provided they are low-risk taxpayers with modest wealth and income.
Key Benefits
- No U.S. tax is payable, even if the returns show tax due.
- No late filing penalties, including those for FBARs (foreign bank accounts) or Form 8938 (foreign assets).
- No need to file IRS Form 8854 or certify five years of tax compliance (which is otherwise required for expatriates).
- The individual is not classified as a covered expatriate, avoiding the potential U.S. exit tax.
This is a one-time opportunity to close the book on U.S. tax obligations, cleanly and affordably.
Who Is Eligible?
To qualify for the program, ALL of the following conditions must be met:
- Relinquished U.S. citizenship after March 18, 2010.
- Never filed U.S. tax returns or IRS forms as a citizen or resident in previous years.
- Net worth under USD $2 million at the time of expatriation.
- Average U.S. income tax liability under USD $25,000 per year for the five years before renunciation.
- No ongoing IRS audits or criminal investigations.
- File six years of U.S. tax returns (five prior years plus year of renunciation).
- Provide a signed statement of eligibility confirming the above.
This relief is available to individuals who renounced citizenship voluntarily and legally, and who are not using complex offshore structures to avoid tax.
What Needs to Be Filed?
Applicants must submit:
- Form 1040 (U.S. Individual Tax Return) for six years.
- FBARs (FinCEN Form 114), if foreign accounts exceeded USD $10,000 in any year.
- Any required international information forms (e.g., 8938, 5471, 3520) for the same years.
- A signed certification statement confirming eligibility for the program.
Returns are mailed directly to a special IRS processing unit:
Internal Revenue Service
3651 S IH35, MS 4301 AUSC
Austin, TX 78741, USA
Why It Matters
The U.S. is one of the few countries in the world that taxes based on citizenship, not residence. This means that even those who haven’t lived in the U.S. for decades — or ever — may have technically been non-compliant. For these individuals, the Relief Procedures offer a safe exit from the U.S. tax system, free from penalties and free from tax.
This is especially important for those seeking to clear their record for FATCA compliance, avoid issues with foreign banks, or finalize their renunciation properly.
How We Can Help
At US Global Tax, we specialise in expatriate tax matters and have guided many clients through the IRS relief process. We assist in:
- Confirming your eligibility;
- Preparing the required tax returns and FBARs;
- Drafting the eligibility certification statement;
- Liaising with your legal adviser on proof of expatriation;
- Submitting the full relief package to the IRS.
This is your chance to move forward — confidently and compliantly — without paying a cent in U.S. tax.
Contact US Global Tax today to find out if you’re eligible for the Relief Procedures and let us help you exit the U.S. tax system — the right way.
Web: usglobaltax.com
Email: [email protected]