Streamlined Procedure: What Still Applies Under Trump

The "Streamlined Foreign Offshore Procedure" was introduced in 2012 and significantly expanded in 2014. Its goal was to give honest taxpayers abroad who had not willfully violated US tax law a simplified, penalty-free way to file their overdue returns.

The procedure is aimed in particular at:

• US citizens abroad who did not know they had to file

• Green card holders who have moved back to their home country

• Accidental Americans who have never lived in the US but hold US citizenship by birth or descent

Instead of paying heavy penalties, those affected can file three years of tax returns and six years of FBARs (reports of foreign bank accounts) retroactively, with the prospect of having penalties waived.

Not everyone qualifies. The key requirements are:

• No US residence in at least one of the last three years and at least 330 full days outside the US (for the foreign procedure)

• No willful tax evasion

• A credible explanation of why past failures were not willful but the result of ignorance or error

• Willingness to fully disclose all worldwide income

It is especially important that every year concerned is filed completely and correctly, including all schedules, forms and statements.

A complete Streamlined submission includes:

• Three complete US tax returns (Form 1040)

• Six complete FBARs (FinCEN Form 114)

• Form 14653: certification that the failure to comply was due to "non-willful conduct"

• Supporting documents, such as bank statements or tax assessments from your home country

Any tax that results must of course be paid, but without penalties or sanctions. Interest on the back taxes does apply, however.

Between 2016 and 2020, during Trump's first term, plenty of rumors went around:

• The Streamlined Procedure would soon be shut down

• It had become stricter

• The IRS would no longer show leniency

In reality, nothing changed formally. The procedure stayed untouched, even though some voices within the IRS pushed for tighter rules. Neither Trump nor his Treasury Secretary Mnuchin abolished the program.

As of today (July 2025), the Streamlined Procedure remains fully in effect.

The current administration (Trump 2.0 with Treasury Secretary Scott Bessent) has not made any formal changes either. But, as in previous years, the IRS has tightened its review process and looks more closely at submitted cases. That means:

• Formal errors are forgiven less often

• Doubts about the honesty of the "non-willful" statement can lead to rejection

• If willfulness is suspected, the IRS can reject the submission retroactively

Bottom line: the procedure is still there, but you should use it with the utmost care and professional support.

For "Accidental Americans" in particular (people who inherited citizenship through birth in the US or through American parents), the Streamlined Procedure is often the only way to:

1. become tax compliant

2. avoid the exit tax, and

3. renounce US citizenship cleanly

To avoid being treated as a "covered expatriate" (and therefore paying no exit tax), you must be tax compliant for the past five years. That is exactly what the Streamlined Procedure makes possible, but only if it is done properly.

What happens if a Streamlined submission is rejected? It depends on the reason:

• Formal errors: corrections are possible

• An implausible explanation: the IRS may open an investigation for willful evasion

• Incorrect residence information: redirection to the domestic Streamlined Procedure (with a 5% penalty)

In the worst case, you face:

• Criminal proceedings

• Interest and penalties for every year

• Renunciation refused until penalties are paid

That is why you should never go it alone with this procedure.

Yes, there are some alternatives, but they usually carry higher risks:

• "Quiet disclosure" (filing late returns without flagging them): explicitly rejected by the IRS. It can be treated as an admission of guilt.

• Offshore Voluntary Disclosure Program (OVDP): Closed in 2018. Since then, there has been no alternative for willful cases.

• Relief Procedures for Certain Former Citizens: Now only applicable in very limited cases. It applies only to people who have already renounced their citizenship and had a tax liability of less than $25,000.

In the vast majority of cases, the Streamlined Procedure is the only viable route, provided you act honestly and meet the requirements.

A client of Mount Bonnell Advisors, a Swiss man born in Zurich, only found out at 43 that he was a US citizen: through his father, who emigrated to the USA shortly after he was born.

He had never lived in the USA and had never filed a tax return, and suddenly his Swiss bank closed his account because of FATCA.

With the Streamlined Procedure, we were able to:

• Correctly file three years of US tax returns and six FBARs

• Word the Form 14653 statement in a plausible, credible way

• Avoid the exit tax

• Prepare a successful renunciation at the consulate in Bern

Today the client is "clean", has no further IRS obligations and can once again live and invest normally in Europe.

If you think the Streamlined Procedure could be right for you, we recommend the following steps:

1. Confirm your US citizenship

2. Analyze your tax obligations

3. Gather your documents

4. Prepare your US tax filings

5. Carefully word your statement (Form 14653)

6. Submit and monitor your case

Mount Bonnell Advisors guides you through every step together with experienced US tax advisors: individually, confidentially and with a clear roadmap. You'll find all the details of our service on the Streamlined Filing page, and the background in Everything you need to know about Streamlined Filing. Our article on the first filing shows how a first filing works for an Accidental American. You'll find more articles under News.

Book your personal consultation now

Mount Bonnell Advisors: your English-speaking partner for US tax questions.

Consultation & implementation

If you'd like to find out what this means for your own situation, the best step is to book a consultation.