Richard S. Lehman, Esq., answers the top 10 questions about the I.R.S. Streamlined Compliance Program
Question 1
Will a taxpayer qualify for the Streamline Program if they are under examination?
a) Yes
b) No
c) They will qualify unless they are under criminal examination
Question 2
Can a U.S. Taxpayer who is living in the U.S. qualify for the Streamlined Disclosure Program if the Taxpayer has not filed tax returns for the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed?
a) Yes
b) No
c) Yes, if the taxpayer has filed a tax return for at least one of the last three years
Question 3
Which of the following forms do not need to be filed by a U.S. resident taxpayer qualifying for the Streamline Procedure if the taxpayer does not own any foreign entities?
a) FBAR
b) Form 1040
c) Form 5471
d) Form 8938
Question 4
What is willful conduct?
a) The voluntary, intentional violation of a known legal duty
b) Failure to file tax information returns if the taxpayer had no knowledge of the requirements to do so
c) Failure to file if there is a reasonable cause
Question 5
If a taxpayer is concerned that his or her failure to report income, pay tax and submit required information returns was due to willful conduct and the taxpayer wants more assurances that they will not be subject to criminal liability and/or substantial monetary penalties, what action should the taxpayer consider?
a) Filing a “Silent Disclosure” which is to file all proper forms and returns without entering any I.R.S. Program
b) Enter the I.R.S. Offshore Voluntary Disclosure Program
c) Do not file any disclosure of tax and related information
Question 6
When is an alien individual considered to be a U.S. taxpayer because of a “substantial presence” in the U.S.?
a) When the taxpayer owns a home in the U.S.
b) When the taxpayer owns a home and a business in the U.S.
c) When the taxpayer is in the U.S. for at least 31 days and in that same calendar year is considered to have been in the U.S. for a combined total of 183 days or more over the past two years pursuant to a formula that counts time in the U.S. for a portion of the two previous years and the year under consideration
Question 7
What are the exceptions that permit the Taxpayer who has a substantial presence” in the U.S. to stay longer in the U.S. without being taxed as a U.S. taxpayer?
a) There is a U.S. Tax Treaty with the U.S.
b) If the Taxpayer is only on vacation in the U.S.
c) If the taxpayer has a “closer connection” with another country during the year
d) Answer (a) and (c)
Question 8
What is the percentage of the highest foreign asset value that must be paid as a penalty if a taxpayer is involved in the Offshore Voluntary Compliance Program?
a) 20%
b) 25%
c) 27.5%
Question 9
Can a Taxpayer enter the Voluntary Compliance Program and then choose to “Opt Out”?
a) Yes
b) No
c) Only if they owe no income taxes
Question 10
What kinds of assets does the offshore penalty apply to?
a) financial accounts holding cash, securities or other custodial assets
b) tangible assets such as real estate or art
c) intangible assets such as patents or stock or other interests in a U.S. or foreign business
d)all of the above
c) They will qualify unless they are under criminal examination
Question 2
Can a U.S. Taxpayer who is living in the U.S. qualify for the Streamlined Disclosure Program if the Taxpayer has not filed tax returns for the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed?
a) Yes
b) No
c) Yes, if the taxpayer has filed a tax return for at least one of the last three years
Question 3
Which of the following forms do not need to be filed by a U.S. resident taxpayer qualifying for the Streamline Procedure if the taxpayer does not own any foreign entities?
a) FBAR
b) Form 1040
c) Form 5471
d) Form 8938
Question 4
What is willful conduct?
a) The voluntary, intentional violation of a known legal duty
b) Failure to file tax information returns if the taxpayer had no knowledge of the requirements to do so
c) Failure to file if there is a reasonable cause
Question 5
If a taxpayer is concerned that his or her failure to report income, pay tax and submit required information returns was due to willful conduct and the taxpayer wants more assurances that they will not be subject to criminal liability and/or substantial monetary penalties, what action should the taxpayer consider?
a) Filing a “Silent Disclosure” which is to file all proper forms and returns without entering any I.R.S. Program
b) Enter the I.R.S. Offshore Voluntary Disclosure Program
c) Do not file any disclosure of tax and related information
Question 6
When is an alien individual considered to be a U.S. taxpayer because of a “substantial presence” in the U.S.?
a) When the taxpayer owns a home in the U.S.
b) When the taxpayer owns a home and a business in the U.S.
c) When the taxpayer is in the U.S. for at least 31 days and in that same calendar year is considered to have been in the U.S. for a combined total of 183 days or more over the past two years pursuant to a formula that counts time in the U.S. for a portion of the two previous years and the year under consideration
Question 7
What are the exceptions that permit the Taxpayer who has a substantial presence” in the U.S. to stay longer in the U.S. without being taxed as a U.S. taxpayer?
a) There is a U.S. Tax Treaty with the U.S.
b) If the Taxpayer is only on vacation in the U.S.
c) If the taxpayer has a “closer connection” with another country during the year
d) Answer (a) and (c)
Question 8
What is the percentage of the highest foreign asset value that must be paid as a penalty if a taxpayer is involved in the Offshore Voluntary Compliance Program?
a) 20%
b) 25%
c) 27.5%
Question 9
Can a Taxpayer enter the Voluntary Compliance Program and then choose to “Opt Out”?
a) Yes
b) No
c) Only if they owe no income taxes
Question 10
What kinds of assets does the offshore penalty apply to?
a) financial accounts holding cash, securities or other custodial assets
b) tangible assets such as real estate or art
c) intangible assets such as patents or stock or other interests in a U.S. or foreign business
d) all of the above
