What are the Streamlined Filing Compliance Procedures in one sentence?

The Streamlined Filing Compliance Procedures are the IRS programme that allows an individual whose failure to report foreign financial assets was non-wilful to become compliant by filing three years of returns, six years of FBARs and a signed certification, and paying the tax and interest due. There are two branches: foreign offshore for people living abroad and domestic offshore for US residents.

Is there a penalty under the Streamlined Foreign Offshore Procedures?

No. The IRS states that a taxpayer who is eligible for and complies with the Streamlined Foreign Offshore Procedures will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties or FBAR penalties. Tax and interest are still paid in full. The 5% miscellaneous offshore penalty belongs to the Streamlined Domestic Offshore Procedures only.

What is the difference between an FBAR and Form 8938?

The FBAR, FinCEN Form 114, is filed electronically with FinCEN when foreign financial accounts exceed $10,000 in aggregate at any time in the year. Form 8938 is filed with the IRS as part of the tax return and covers specified foreign financial assets above higher thresholds, starting at $200,000 at year end for a single filer living abroad. Filing one does not replace the other.

Does a UK ISA have to be reported to the IRS?

Yes. An ISA is free of UK tax, but the United States does not recognise the wrapper. Interest, dividends and gains arising inside it are reportable on a US citizen's Form 1040, and the account counts towards the FBAR and Form 8938 thresholds. Funds held in a stocks and shares ISA may also be passive foreign investment companies, which are reported on Form 8621.

Why does my P60 not match my US tax return?

A P60 reports pay and tax for the UK tax year, which runs from 6 April to 5 April. A US individual return covers the calendar year. One P60 therefore spans parts of two US tax years. US wages are normally rebuilt month by month from payslips, and the UK tax deducted is matched to the correct US year for the foreign tax credit on Form 1116.

Can I rely on HMRC Self Assessment instead of filing a US return?

No. Self Assessment satisfies your UK obligation only. A US citizen must file Form 1040 on worldwide income wherever they live, and the saving clause in the US-UK tax treaty preserves that right for the United States. What Self Assessment does provide is evidence of UK tax paid, which usually supports a foreign tax credit that reduces or eliminates the US tax on the same income.

IRS Streamlined Filing Experts: Plain-English Glossary

IRS Streamlined Filing Experts use a compact vocabulary of procedure names, form numbers and penalty terms, and this glossary defines each one in plain English for Americans living in the UK. In short: the Streamlined Filing Compliance Procedures are the IRS route for taxpayers whose missed US filings were non-wilful, the Streamlined Foreign Offshore Procedures are the version for people living abroad and carry no penalty, and the Streamlined Domestic Offshore Procedures are the version for US residents and carry a 5% miscellaneous offshore penalty.

In the files we prepare for wealthy Americans in the UK, most early confusion is vocabulary. Each definition below can be quoted on its own and was checked against the IRS, FinCEN or GOV.UK page that governs it.

What do IRS Streamlined Filing Experts mean by the procedure names?

Three names describe one programme and its two branches. The IRS sets out the parent programme at https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures and each branch has its own page. The branch is decided by where you lived, not by where your money was held.

Streamlined Filing Compliance Procedures (SFCP): the Streamlined Filing Compliance Procedures are the IRS programme that lets an individual taxpayer correct a non-wilful failure to report foreign financial assets and pay the tax due on them, by filing a defined set of returns with a signed certification. It is the umbrella term covering both branches below.
Streamlined Foreign Offshore Procedures (SFOP): the Streamlined Foreign Offshore Procedures are the branch for taxpayers who meet the non-residency requirement. The filer submits delinquent or amended returns for each of the most recent 3 years and FBARs for each of the most recent 6 years, with Form 14653, and pays the tax and interest due. No miscellaneous offshore penalty applies. The IRS states that a compliant filer will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties or FBAR penalties.
Streamlined Domestic Offshore Procedures (SDOP): the Streamlined Domestic Offshore Procedures are the branch for taxpayers who do not meet the non-residency requirement and who have already filed a US return for each of the most recent 3 years. The filer submits amended returns for those 3 years and FBARs for 6 years, with Form 14654, and pays a 5% miscellaneous offshore penalty in addition to tax and interest.

What do the eligibility terms mean?

Eligibility turns on a handful of defined terms. These are the ones we spend the most time on, because a submission that fails any of them is not a streamlined submission at all.

Non-wilful conduct: the IRS defines it in these words: 'Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.' The taxpayer certifies this under penalty of perjury, and the certification must be supported by specific facts.
Non-residency requirement: for a US citizen or green card holder, the non-residency requirement is met if, in any one or more of the most recent three years for which the return due date has passed, the individual did not have a US abode and was physically outside the United States for at least 330 full days. The IRS sets this out at https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-outside-the-united-states. For joint filers, both spouses must meet it.
ITIN: an Individual Taxpayer Identification Number is a tax processing number issued by the IRS to people who need to file but are not eligible for a Social Security number. A taxpayer without one can still use the streamlined procedures by submitting the ITIN application with the package.

What do the form numbers mean?

Certifications and core returns:

Form 14653: Form 14653 is the Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures. It certifies eligibility, that all required FBARs have now been filed, and that the failures resulted from non-wilful conduct.
Form 14654: Form 14654 is the Certification by U.S. Person Residing in the U.S. used on the domestic branch. It carries the same non-wilful certification and also the calculation of the 5% miscellaneous offshore penalty.
Form 1040-X: Form 1040-X is the Amended U.S. Individual Income Tax Return, used to correct a return that has already been filed.

Account and asset reporting:

FBAR: the FBAR is the Report of Foreign Bank and Financial Accounts. A US person must file it when the aggregate value of their foreign financial accounts exceeded $10,000 at any time during the calendar year. The IRS summary is at https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar.
FinCEN Form 114: FinCEN Form 114 is the form number of the FBAR. It is filed electronically with the Financial Crimes Enforcement Network through the BSA E-Filing System at https://bsaefiling.fincen.gov, not with the tax return. It is due on 15 April with an automatic extension to 15 October.
FATCA: FATCA is the Foreign Account Tax Compliance Act, the US law under which foreign financial institutions report accounts held by US persons and under which individuals report foreign assets on Form 8938. It is the reason UK banks ask customers whether they are US citizens.
Form 8938: Form 8938 is the Statement of Specified Foreign Financial Assets, filed with the income tax return. For a taxpayer living abroad, the IRS comparison table at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements gives the threshold as more than $200,000 on the last day of the tax year or more than $300,000 at any time for a single filer, and $400,000 or $600,000 for a married couple filing jointly.
Specified foreign financial asset: a specified foreign financial asset is a foreign financial account or a foreign investment asset held outside an account, such as shares in a foreign company, an interest in a foreign partnership or fund, or a foreign-issued life insurance contract with a cash value. Directly held foreign property and directly held foreign currency are not specified foreign financial assets.

Investment and company reporting:

PFIC: a passive foreign investment company is a foreign corporation that meets either an income test (75% or more of its gross income is passive income) or an asset test (at least 50% of its assets, on average, produce passive income or are held to produce it). Many UK-domiciled funds and exchange-traded funds fall within the definition.
Form 8621: Form 8621 is the information return a US shareholder of a PFIC files to report distributions, gains on disposal and elections. The current instructions are at https://www.irs.gov/instructions/i8621.
CFC: a controlled foreign corporation is a foreign corporation in which US shareholders own more than 50% of the total voting power or value on any day of its tax year. A US shareholder for this purpose is a US person owning 10% or more of the voting power or value.
Form 5471: Form 5471 is the information return filed by certain US persons who are officers, directors or shareholders of certain foreign corporations. It is attached to the income tax return, and the instructions at https://www.irs.gov/instructions/i5471 sort filers into categories that decide which schedules are required. The instructions state a $10,000 penalty for each annual accounting period of each foreign corporation for which the required information is not furnished.

Double-tax relief:

Form 1116: Form 1116 is the form on which an individual claims the foreign tax credit, which reduces US tax by income tax paid or accrued to another country on the same income. For most higher-earning UK residents it is the main mechanism that prevents double taxation.
Form 2555: Form 2555 is the form used to claim the foreign earned income exclusion, which removes a capped amount of earned income from US tax for a person who meets either the bona fide residence test or the physical presence test. It applies to earned income only, not to dividends, interest or gains.
Form 8833: Form 8833 is the Treaty-Based Return Position Disclosure. A taxpayer attaches it when relying on a provision of a tax treaty to override or modify a rule of US domestic law in a way that must be disclosed.

What do the penalty and time-limit terms mean?

Penalty language is where precision matters most. The headline point is simple and often reported wrongly: the foreign branch has no penalty, and the 5% figure belongs to the domestic branch only.

Miscellaneous offshore penalty: the Title 26 miscellaneous offshore penalty is a payment of 5% of the highest aggregate balance or value of the taxpayer's foreign financial assets that are subject to the penalty during the years in the covered tax return period and the covered FBAR period. It applies under the Streamlined Domestic Offshore Procedures only. The IRS describes the base at https://www.irs.gov/individuals/international-taxpayers/u-s-taxpayers-residing-in-the-united-states.
Information return penalties: these are the fixed-sum penalties attached to forms such as Form 5471 and Form 8938. The IRS comparison table gives the Form 8938 penalty as up to $10,000 for failure to disclose, with a further $10,000 for each 30 days of non-filing after an IRS notice.
Interest: interest is the statutory charge on tax paid late. It is not a penalty and it is not waived under either branch. Tax and interest are paid in full with the submission.
Reasonable cause: reasonable cause is a defence to many penalties, available where the taxpayer exercised ordinary business care and prudence and still failed to comply. It is a separate argument made on its own facts and is not the same test as non-wilful conduct.
Statute of limitations: the statute of limitations is the period within which the IRS can assess additional tax on a return. It generally runs for three years from the date the return was filed, and it does not begin to run for a year in which no return was filed. That is why unfiled years stay open indefinitely until a return is submitted.

What do the UK terms mean on a US return?

This is the gap in almost every glossary we have read. US guides define US terms. They rarely explain how the documents a UK resident actually holds translate onto a US return. The two systems use different tax years, different names for similar things and, in a few important cases, opposite treatment of the same account.

UK tax year: the UK tax year runs from 6 April to the following 5 April. The US tax year for an individual is the calendar year. Every UK figure therefore has to be re-cut to a January to December basis before it goes on Form 1040.
Self Assessment: Self Assessment is the HMRC system under which an individual reports income and gains on an annual UK tax return. GOV.UK states that a UK resident who needs to pay tax on foreign income usually reports it in a Self Assessment return (https://www.gov.uk/tax-foreign-income). On the US side, the Self Assessment return is evidence of UK tax paid or accrued for the foreign tax credit.
SA302: an SA302 is the HMRC tax calculation produced once a Self Assessment return has been submitted, described by GOV.UK at https://www.gov.uk/sa302-tax-calculation as evidence of your earnings. For US purposes it is a supporting document showing the UK income tax computed for a UK tax year. It is not itself on a calendar-year basis.
P60: a P60 is the end-of-year certificate an employer gives each employee, showing pay and tax deducted for the UK tax year. It straddles two US calendar years, so US wages are normally rebuilt from monthly payslips, with the P60 used as a reconciliation check.
ISA: an Individual Savings Account is a UK account in which savings and investments grow free of UK tax. GOV.UK lists four types at https://www.gov.uk/individual-savings-accounts: cash, stocks and shares, innovative finance and Lifetime. The United States does not recognise the wrapper. Interest, dividends and gains inside an ISA are reportable on Form 1040, the account counts towards the FBAR and Form 8938 thresholds, and funds held inside a stocks and shares ISA may be PFICs requiring Form 8621.
SIPP: a self-invested personal pension is a UK personal pension in which the holder chooses the investments. Its US reporting depends on how the US-UK tax treaty applies to the particular scheme, and that is settled scheme by scheme during preparation.
Arising basis: the arising basis is the UK rule under which a UK resident is taxed on worldwide income and gains as they arise, whether or not the money is brought to the UK. GOV.UK puts the current position plainly: if you are UK resident, you will normally pay tax on your foreign income. Because the United States also taxes its citizens on worldwide income, a US citizen resident in the UK sits inside two worldwide systems at once, reconciled by foreign tax credits and the treaty.
Saving clause: the saving clause is the provision in a US tax treaty that preserves the right of the United States to tax its own citizens largely as if the treaty did not exist, subject to listed exceptions. The IRS summarises the effect at https://www.irs.gov/individuals/international-taxpayers/tax-treaties: with certain exceptions, treaties do not reduce the US taxes of US citizens. It is why a US citizen in London cannot simply point to the treaty and stop filing.

Which terms do people most often confuse?

Three pairs cause most of the misunderstanding we correct in first meetings.

Delinquent return versus amended return. A delinquent return is an original return filed after its due date for a year in which no return was filed at all. An amended return is a correction, on Form 1040-X, to a return that was filed on time or late but was incomplete or wrong. The foreign branch accepts either, described by the IRS as delinquent or amended returns for each of the most recent 3 years. The domestic branch is built on amended returns, because eligibility requires that a US return was previously filed for each of those 3 years. The distinction therefore helps decide which branch is open to you.

FBAR versus Form 8938. The FBAR goes to FinCEN and covers foreign financial accounts once their aggregate value passes $10,000. Form 8938 goes to the IRS with the tax return and covers a wider class of specified foreign financial assets at much higher thresholds. Filing one does not satisfy the other. The IRS states that the Form 8938 requirement does not replace or otherwise affect the obligation to file FinCEN Form 114, and many of our clients file both for the same accounts.

SFOP versus SDOP. The two branches share a non-wilful certification, a three-year return period and a six-year FBAR period. They differ in three ways: who qualifies (the non-residency requirement), which certification is signed (Form 14653 or Form 14654) and whether the 5% miscellaneous offshore penalty applies (domestic only). A wealthy American who has lived in London for a decade and travels to New York for a few weeks a year is normally looking at the foreign branch. A person who spent long stretches in the United States in each of the last three years may fail the 330-day test in every year and fall into the domestic branch, with a materially different cost.

How do the terms fit together in one file? A worked illustration

The following is an illustration only. The person and all figures are assumed for the purpose of showing how the vocabulary connects, and the exchange rate of $1.30 to £1 is an assumption, not an official rate. Real filings use the exchange rates prescribed for each form.

Assume a US citizen, born in Boston, who has lived in London for twelve years and founded a UK software company in which she holds 60% of the shares. She has never filed a US return since leaving. She spends about three weeks a year in the United States and has no home there. Her assumed position in the latest year is a salary of £250,000 shown on her P60, dividends from her company reported through Self Assessment, a stocks and shares ISA worth £180,000 invested in UK-domiciled funds, a SIPP, and UK bank and brokerage accounts with a combined highest value of £900,000.

Branch: she had no US abode and was outside the United States for at least 330 full days in at least one of the last three years, so she meets the non-residency requirement. The route is the Streamlined Foreign Offshore Procedures and no miscellaneous offshore penalty applies.
Returns: because no US returns were filed, the three returns are delinquent returns on Form 1040, not amended returns on Form 1040-X.
FBAR: £900,000 at the assumed rate is $1,170,000, far above the $10,000 aggregate threshold, so six years of FinCEN Form 114 are filed through the BSA E-Filing System. On the foreign branch the IRS instructs filers to select 'Other' as the reason for late filing and enter 'Streamlined Filing Compliance Procedures' as the explanation.
Form 8938: the same $1,170,000 exceeds the $200,000 year-end and $300,000 any-time thresholds for a single filer living abroad, so Form 8938 is attached to each of the three returns.
Form 8621: the ISA, worth $234,000 at the assumed rate, holds UK-domiciled funds. Each fund is tested as a PFIC and, where it is one, reported on Form 8621. The ISA's UK tax-free status changes nothing on the US side.
Form 5471: at 60% she is a US shareholder and the company is a controlled foreign corporation, so Form 5471 is attached to each return, with the filing category and schedules taken from the current instructions.
Double-tax relief: her salary and dividends have already borne UK tax under the arising basis. The UK figures, drawn from payslips, the P60 and the SA302, are re-cut to calendar years and the UK tax is claimed as a foreign tax credit on Form 1116.
Certification: Form 14653 sets out, in her own factual account, why twelve years of returns were missed, and she signs it under penalty of perjury.

What terms sit outside the streamlined route?

Some terms describe alternatives rather than parts of a streamlined file. They matter because choosing the wrong route is harder to undo than choosing late.

IRS Criminal Investigation Voluntary Disclosure Practice: the Voluntary Disclosure Practice is the IRS route for taxpayers whose non-compliance was wilful. The IRS describes a voluntary disclosure as a truthful, timely and complete disclosure of wilful non-compliance through designated procedures, made on Form 14457, and says it will not automatically guarantee immunity from prosecution but may result in prosecution not being recommended. The page is https://www.irs.gov/compliance/criminal-investigation/irs-criminal-investigation-voluntary-disclosure-practice. It does not apply to taxpayers with illegal sources of income.
Late FBAR with a reason: where only FBARs are missing and no tax was under-reported, the IRS tells filers who have not been contacted and are not under investigation to file late FBARs as soon as possible through the BSA E-Filing System, following FinCEN's instructions for explaining the reason for late filing.
Delinquent FBAR Submission Procedures: this is a withdrawn term. It was the title of an IRS web page that the IRS took down around July 2026. It should not be treated as a current, named IRS route, and older articles that describe it as one are out of date.

The routes are mutually exclusive in an important sense. The IRS states that a taxpayer who begins the streamlined procedures cannot afterwards use the voluntary disclosure route for the same matters, and the reverse is also true. A taxpayer with any doubt about wilfulness should resolve that question with a US tax attorney before anything is filed.

How should you use this glossary before speaking to a specialist?

Use it to turn a vague worry into a short list of answerable questions. In our experience the fastest first meetings are with clients who arrive knowing five things: how many days they spent in the United States in each of the last three years, whether they have ever filed a US return, the highest combined balance of their non-US accounts in each of the last six years, what sits inside any ISA, and whether they own 10% or more of any non-US company.

We are a tax preparation and compliance practice, and we handle the full file for Americans in the UK: the US returns, the information returns, the FBARs and the certification package, coordinated with the UK Self Assessment position. If the terms in this glossary describe your situation, the next step is a scoping conversation with one of our specialists, with your day counts and account list to hand.