Streamlined Domestic Offshore Procedures

Get IRS compliance with Streamlined Domestic Offshore Procedures (SDOP). Contact Tax Relief Counsel today to get started.

Navigating Streamlined Domestic Offshore Procedures (SDOP) with Tax Relief Counsel

For U.S. taxpayers residing within the country who have undisclosed foreign financial accounts or assets, the Streamlined Domestic Offshore Procedures (SDOP) provide an opportunity to come into compliance with IRS regulations while minimizing penalties. This program is designed for taxpayers whose failure to report foreign assets or income was non-willful, meaning it was due to negligence or misunderstanding rather than intentional tax evasion.

At Tax Relief Counsel, we help individuals and businesses across the U.S. and internationally navigate the complexities of SDOP, ensuring a seamless compliance process.

What Is SDOP and Why Does It Matter?

SDOP is an IRS initiative designed to encourage taxpayers to voluntarily disclose unreported foreign income and assets. Failing to report such assets can lead to severe penalties, including substantial fines and even legal action.

The primary benefits of SDOP include:

A streamlined process compared to other IRS voluntary disclosure programs.
A significantly reduced 5% penalty on foreign assets instead of harsher civil penalties.
Protection from criminal prosecution for tax-related non-compliance.
A clear path to becoming fully compliant with U.S. tax laws.

If you have unreported foreign income or financial accounts, taking advantage of SDOP before an IRS audit is crucial.

Who Qualifies for SDOP?

You may be eligible for SDOP if you meet the following criteria:

You do not meet the non-residency requirements for the streamlined foreign offshore procedures
You have filed a US tax return for the most recent 3 years for which they were due
You failed to disclose income from a foreign financial asset and pay taxes as required by US law, and may have also failed to file an FBAR or other international information returns.
Your non-compliance was non-willful, meaning it resulted from an oversight, misunderstanding, or lack of awareness rather than deliberate tax evasion.
You are not currently under an IRS audit or investigation.

If you meet these conditions, SDOP could be your best path toward tax compliance while avoiding significant penalties.

Steps to Filing Under SDOP

Successfully filing under SDOP requires careful attention to detail. Below is an overview of the process:

1. Assess Your Eligibility

Before proceeding, it’s critical to determine whether your non-compliance qualifies as non-willful. Consulting with a tax attorney at Tax Relief Counsel can help establish the best course of action.

2. Gather Required Documentation

To file under SDOP, taxpayers should work with a professional to compile and prepare:

Documentation of unreported foreign income and financial assets
Amended tax returns for the past three years (Form 1040X).,
Any required international information returns for the past three years (e.g. Form 8938, 3520, 8621, 5471, 5472)
FBARs (Foreign Bank Account Reports) for the past six years (FinCEN Form 114), if applicable

3. Certify Non-Willfulness

Taxpayers should work carefully with a tax professional to prepare and submit Form 14654, which is a certification explaining why they failed to comply with IRS reporting requirements. This statement must be carefully prepared to detail the foreign financial assets, calculate the 5% penalty, and, most importantly, ensure the IRS understands the taxpayer’s non-willful intent.

4. Pay Applicable Taxes and Penalties

Under SDOP, taxpayers must:

Pay any additional taxes and interest on previously unreported income.
Pay a 5% penalty on the highest aggregate balance of undisclosed foreign assets over the past six years.

5. Submit the Complete SDOP Package to the IRS

Once all forms, payments, and required documents are compiled, they must be submitted to the IRS per SDOP guidelines.

Questions About SDOP? We Can Help.

Get IRS compliance with Streamlined Domestic Offshore Procedures (SDOP). Tax Relief Counsel can help you reduce penalties and avoid audits.

Call Me Personally

(202) 630-4095

Common SDOP Mistakes to Avoid

1. Misrepresenting Non-Willfulness

The IRS scrutinizes SDOP submissions to ensure that taxpayers genuinely qualify under non-willful standards. Any indication of intentional tax evasion could lead to increased penalties or criminal prosecution.

2. Filing Incorrect or Incomplete Documentation

Errors in tax returns, international information returns, FBAR filings, or Form 14654 certification can result in IRS rejection or further inquiry. Working with a tax law firm like Tax Relief Counsel can help avoid these costly mistakes.

3. Failing to Act Before an IRS Audit

SDOP is only available to taxpayers who are not under IRS audit. Delaying disclosure could result in losing eligibility for the program and facing more severe consequences.

How Tax Relief Counsel Can Help

At Tax Relief Counsel, we understand the complexities of offshore tax compliance. Our legal team assists clients in every step of the SDOP process, ensuring that:

All required documentation is prepared accurately.
Your non-willfulness statement is clear and defensible.
You minimize penalties and avoid unnecessary risks.

We represent clients nationwide and internationally, providing trusted legal counsel in all tax-related litigation and compliance matters.

Take Control of Your Tax Compliance Today

If you have undisclosed foreign financial accounts or income and want to take advantage of Streamlined Domestic Offshore Procedures, now is the time to act. The IRS frequently updates its programs, and delaying could result in losing this opportunity.

Contact Tax Relief Counsel today at (202) 630-4095 for a confidential consultation and start your path to full tax compliance.

Testimonials

Contact Tax Relief Counsel Today

Contact Tax Relief Counsel today for a confidential consultation. We’ll help you understand your obligations, explore your options, and develop a personalized strategy for achieving tax compliance.