Do I sign Form 14653 or does my preparer sign it?

You sign it. Form 14653 is the taxpayer's own certification that they are eligible for the Streamlined Foreign Offshore Procedures and that their failures resulted from non-willful conduct, and it is signed under penalty of perjury. A preparer can help you organise the facts and present the narrative clearly, but cannot supply the facts or sign in your place. The engagement letter should say this in terms.

Does a streamlined engagement letter cover my UK Self Assessment return?

Not unless it says so. A streamlined engagement is normally limited to the US package: three years of federal returns with required information returns, six years of FBARs and the certification. UK Self Assessment and any correspondence with HMRC are a separate engagement, even where the same income figures are used in both countries. Check the exclusions clause and ask how the two sets of work will be coordinated.

Is there a penalty under the Streamlined Foreign Offshore Procedures?

No. The IRS states that a taxpayer who is eligible for the Streamlined Foreign Offshore Procedures and complies with the instructions will not be subject to failure-to-file, failure-to-pay or accuracy-related penalties on the filings, and tax and interest remain payable. The 5% miscellaneous offshore penalty applies under the Streamlined Domestic Offshore Procedures only. An engagement letter should identify which procedure applies to you.

Why am I asked to sign a section 7216 consent as a UK resident?

Section 7216 of the US Internal Revenue Code restricts how a tax return preparer may use or disclose your tax return information, and IRS guidance requires your signed consent before certain disclosures, including disclosures to preparers located outside the United States. Cross-border work often involves people in more than one country, so the consent identifies who receives your information and why. It sits alongside the privacy notice required under UK GDPR.

What makes the fee go up after I have signed the engagement letter?

The fee changes when the facts differ from the assumptions the letter records. Typical triggers are an additional UK company requiring Form 5471, extra accounts or fund holdings, records that must be reconstructed, a change of procedure, or delay that moves the filing years forward. A sound letter lists these triggers and requires a written change order before extra work starts. Tax and interest paid to the US Treasury are separate from the fee.

IRS Streamlined Filing Experts: Engagement Letter Guide

Q: Are my discussions with a US tax preparer protected by privilege?

Only to a limited extent. Section 7525 extends attorney-style confidentiality protection to tax advice from a federally authorized tax practitioner, but it can be asserted only in noncriminal tax matters before the IRS and noncriminal federal tax proceedings. Information given for the purpose of preparing a return is generally not treated as privileged. If wilfulness may be in question, speak to a US tax attorney first.

IRS Streamlined Filing Experts should put an engagement letter in front of you before a single return is drafted, and that letter should tell you exactly which years, which returns, which FBARs and which information returns are being prepared, what is excluded, what you must supply, how the fee is set and what would change it. An engagement letter is the written contract between a taxpayer and a tax return preparer that defines the scope of the work, the responsibilities of each side and the terms on which the work is done. If the letter you receive for a streamlined submission is one page of generalities, the scope has not been thought through, and scope is where streamlined engagements go wrong.

What should an engagement letter from IRS Streamlined Filing Experts contain?

A streamlined engagement letter is longer than an annual return letter because the submission is a package, not a single return. In the letters we issue, a client with UK investments, a UK company and several years of missed filings should expect to see each of the following as its own clause.

Scope: the procedure being used, the tax years, the returns, the FBAR years and each information return by form number
The certification: who drafts it, who owns it and who signs it
Exclusions: UK returns, US state returns, examination representation and anything else not being done
Client responsibilities for complete and accurate information
Preparer standards: Circular 230, PTIN, due diligence and the preparer signature
Consent to use or disclose tax return information under section 7216
IRS authorisations: Form 2848 or Form 8821
Fee basis and the events that change it
Timetable and the dependencies that drive it
Document retention and return of records
Data protection for a UK-resident client
Confidentiality and the limits of preparer privilege
Referral out where wilfulness is in question
Termination by either side

Which years, returns and forms should the scope clause list?

The scope clause should mirror what the IRS asks for. The IRS page for the Streamlined Foreign Offshore Procedures at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states states that, for each of the most recent 3 years for which the US tax return due date has passed, the taxpayer files delinquent or amended returns together with all required information returns, and for each of the most recent 6 years for which the FBAR due date has passed, files any delinquent FBARs. The same page says the full amount of tax and interest due must be remitted with the submission, that the returns are sent on paper because electronic submissions are not accepted for them, and that FBARs are filed electronically.

A well-drafted scope clause therefore names the actual years, not just the phrase three years and six years. Which three and which six depends on the date the package is mailed, so the letter should state the assumed submission window and say what happens if a filing deadline passes before the package goes out and the years roll forward.

It should then list information returns by form number and by count. For the clients we prepare for, the usual candidates are Form 5471 for each foreign corporation in which the client has a reportable interest, Form 8621 for each passive foreign investment company holding such as a UK fund, and Form 8938 for specified foreign financial assets. The phrase all required information returns on the IRS page is the reason this matters: an engagement that prepares three Forms 1040 and omits a required Form 5471 has not delivered a complete streamlined submission. If the letter says information returns as required without numbers, ask for the schedule behind it.

The scope clause should also record which procedure is being used. The foreign procedures carry no penalty. The 5% miscellaneous offshore penalty belongs to the Streamlined Domestic Offshore Procedures only, which use Form 14654 rather than Form 14653. A letter that blurs the two is a warning sign about the preparer's familiarity with the programme.

Who signs the Form 14653 certification, and what does the letter say about it?

The taxpayer signs it. Form 14653 is the taxpayer's own certification, and the IRS page describes the taxpayer completing and signing a statement certifying eligibility for the Streamlined Foreign Offshore Procedures, that all required FBARs have now been filed, and that the failure to file returns, report income, pay tax and submit information returns and FBARs resulted from non-willful conduct. The IRS defines non-willful conduct as 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 engagement letter should say three things about this document. First, that the preparer assists with it: interviewing you, organising the chronology, testing the facts against the eligibility conditions and helping you set out the narrative clearly. Second, that the facts and the statement are yours, and that you sign it under penalty of perjury. Third, that the preparer will not draft a narrative the facts do not support. The IRS page is direct about the consequence of a weak statement: if the certification is missing, incomplete or otherwise deficient, the returns are processed in the ordinary way without the benefit of the streamlined terms.

What is normally out of scope?

Exclusions deserve as much attention as inclusions. The failure mode we see most often is a client who assumed something was covered because nobody said it was not. A streamlined letter typically excludes the following unless they are expressly added.

UK returns: Self Assessment and any HMRC correspondence are a separate engagement, even where the same figures feed both countries
US state returns: a client who left a state without closing off residency there may have a separate state question
Representation in an IRS examination or in correspondence after filing, beyond routine processing notices
Years outside the three-year and six-year windows
Current-year and future-year returns, which usually move to an annual engagement once the package is filed
Returns for a spouse, children or entities not named in the letter
Bookkeeping, valuations and reconstruction of missing records for a company or investment portfolio
Legal opinions, including any opinion on whether conduct was wilful

Examination support is the exclusion to read most carefully. The IRS page states that returns submitted under the streamlined procedures may be selected for audit under the existing audit selection processes. Filing through the programme is not a closing agreement. The letter should say whether post-filing support is included, available at an agreed rate, or not offered, and who would handle it.

What are the client's responsibilities under the letter?

The client responsibilities clause states that the returns are prepared from information you provide and that you are responsible for its completeness and accuracy. For a streamlined engagement that means every non-US account that existed at any point in the six FBAR years, including closed accounts, joint accounts, and accounts where you had signature authority but no ownership; all income for the three return years from UK and other sources; details of every company in which you hold shares or are a director; and your US travel days, because the non-residency condition on the IRS page turns on being physically outside the United States for at least 330 full days in at least one of the three years, without a US abode.

The clause normally adds that you will review the returns before signing, that you will respond to queries within an agreed period, and that you will tell the preparer promptly if anything changes. The last point matters. If the IRS contacts you about an examination before the package is filed, eligibility is affected and the preparer needs to know the same day.

Which preparer standards should the letter refer to?

The letter should tell you who is preparing the returns and what rules bind them. The IRS explains at https://www.irs.gov/tax-professionals/circular-230-tax-professionals that Treasury Department Circular 230 governs practice before the IRS by setting mandatory rules of conduct for tax professionals who engage with the IRS on taxpayers' behalf, that it establishes standards of competency, diligence and other ethical behaviour, and that the rules apply mainly to attorneys, certified public accountants and enrolled agents. The Office of Professional Responsibility has oversight of practitioner conduct and discipline. A letter from a credentialed preparer should say that the work is done in accordance with Circular 230.

Separately, the IRS states at https://www.irs.gov/tax-professionals/ptin-requirements-for-tax-return-preparers that anyone who prepares or assists in preparing federal tax returns for compensation must have a valid Preparer Tax Identification Number. You are entitled to know that the person preparing your returns holds one, and the returns you receive for signature should show the paid preparer's details and signature alongside yours. A paid preparer who asks you to file a return they prepared as though you had prepared it yourself is not someone to engage.

Why is there a separate consent under section 7216?

Section 7216 of the Internal Revenue Code restricts what a tax return preparer may do with your tax return information. The IRS maintains a Section 7216 Information Center at https://www.irs.gov/tax-professionals/section-7216-information-center, which describes the regulations as setting rules and consent requirements for the disclosure or use of tax return information by tax return preparers. The IRS frequently asked questions page on the section, which the IRS now marks as historical content, describes section 7216 as a criminal provision that prohibits preparers from knowingly or recklessly disclosing or using tax return information, with a separate civil penalty under section 6713, subject to permitted purposes and to taxpayer consent.

For a UK-resident client this clause is not boilerplate. Cross-border engagements routinely involve a preparer in one country and reviewers, software or support staff in another. The same IRS material explains that consent must be obtained before the disclosure, must be knowing and voluntary, and must be signed and dated by the taxpayer, and it addresses disclosure of return information to preparers located outside the United States, including specific conditions around Social Security numbers. It also notes that where no period is specified a consent runs for one year from the date of signature.

What you should expect, then, is a consent document that names who will receive your information, where they are located and for what purpose. In the engagements we run it arrives as a separate signed document alongside the engagement letter rather than a sentence buried in it, following the format set out in IRS Revenue Procedure 2013-14, which the Information Center lists. If you are asked to consent to your information being used for marketing or shared with unrelated parties, you are free to decline that part.

Form 2848 or Form 8821: which authorisation will you be asked to sign?

These two forms do different jobs, and the letter should say which is being requested and why. IRS Tax Topic 311 at https://www.irs.gov/taxtopics/tc311 explains that Form 2848, Power of Attorney and Declaration of Representative, allows the individual or individuals named to represent you before the IRS and to receive your tax information for the matters and tax years or periods specified, and that the representative must be an individual authorised to practise before the IRS. Form 8821, Tax Information Authorization, allows a person to receive your tax information where you do not want that person to represent you.

A streamlined submission can be prepared and filed with neither form in place. Preparers often request one so they can obtain IRS transcripts, confirm what the IRS already holds and receive copies of notices after filing. If representation in correspondence or examination is excluded from scope, a Form 8821 is consistent with that exclusion. If a Form 2848 is requested, check that the tax years and matters listed on it match the scope clause and no more. Topic 311 also notes that joint filers each execute their own Form 2848, which is relevant where both spouses are US persons.

How is the fee set, and what changes it?

The fee clause should state the basis, fixed or time-based, and the assumptions the figure rests on. A fixed fee for a streamlined package is only meaningful if the letter records the counts it was priced on: number of return years, number of FBAR years, number of accounts, number of foreign companies, number of fund holdings requiring Form 8621, and whether the certification narrative is included.

It should then list the events that change the fee. The common ones are additional entities coming to light, additional accounts or fund holdings, records that have to be reconstructed because statements are unavailable, a change of procedure, the three-year window rolling forward because the timetable slipped, and work that turns out to need a different professional. A clear letter says how you will be told, normally by a written change order agreed before the extra work is done. Tax and interest payable to the US Treasury are not part of the fee and should be described separately, since the IRS requires them to be remitted with the submission.

What does the timetable clause depend on?

A timetable clause that gives a completion date without conditions is not credible. The honest version sets out the sequence, typically fact-finding, document collection, preparation, review, certification, signature, payment and mailing, and attaches each stage to a dependency: your delivery of complete records, responses from UK banks and fund managers, receipt of company accounts, and your availability to review and sign. The IRS does not publish a processing time for streamlined submissions on its procedures page, and a letter should not promise one. What the preparer can commit to is turnaround from the date the record set is complete.

How are document retention and UK data protection handled?

The retention clause covers two different things: your original documents, which remain yours and should be returned on request, and the preparer's working papers and copies of filed returns, which the preparer keeps for a stated period. The letter should give that period, say how records are destroyed at the end of it, and say how you obtain copies in the meantime. For a streamlined client, keep your own complete copy of the package as mailed, including the signed certification and proof of posting. You will want it if a query arrives years later.

Because you live in the UK, UK data protection law applies to the handling of your personal data. GOV.UK states at https://www.gov.uk/data-protection that data protection in the UK is governed by the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018, and that personal data must be used fairly, lawfully and transparently, for specified and explicit purposes, kept for no longer than is necessary, and handled in a way that ensures appropriate security. The same page lists your rights, including to be informed about how your data is used, to access it and to have incorrect data updated, and points to the Information Commissioner's Office for complaints.

The engagement letter, or a privacy notice it refers to, should therefore tell you who the data controller is, what the data is used for, how long it is held, whether it leaves the UK and on what basis, and who to contact. Notice the interaction with the US rules. The section 7216 consent and the UK privacy notice address the same flow of information from two legal directions, and a letter drafted by someone who works in both systems will make them consistent with each other.

Are your conversations with a preparer privileged?

Confidential, yes. Privileged, only in a narrow sense, and a careful letter says so. Section 7525 of the Internal Revenue Code, the text of which is at https://www.law.cornell.edu/uscode/text/26/7525, extends the common law protections of confidentiality that apply between a taxpayer and an attorney to communications with a federally authorized tax practitioner, but only with respect to tax advice and only to the extent the communication would be privileged if it were with an attorney. The statute then limits where the protection can be asserted: noncriminal tax matters before the IRS and noncriminal tax proceedings in federal court brought by or against the United States. It also contains an exception for certain written communications connected with tax shelters.

Two consequences follow for a streamlined client. First, on the face of the statute the protection has no application in a criminal matter. Second, it attaches to tax advice, and information handed over so that a return can be prepared and filed with the IRS is generally not treated as privileged. Preparation work is the core of a streamlined engagement, so you should assume that what you tell a preparer for the purpose of the returns and the certification is confidential but not shielded from compulsory disclosure. This is a general description rather than a legal opinion, and it is one reason the next clause exists.

When is a case referred out because wilfulness is in question?

The streamlined procedures are for non-willful conduct only, and the IRS page makes clear what is at stake if that characterisation is wrong: the protection from penalties on the filed returns holds unless an examination determines that the original noncompliance was fraudulent or that the FBAR violation was willful. A responsible letter therefore includes a referral clause. It says that if, during fact-finding, information emerges suggesting the failure to file may not have been non-willful, the preparer will stop work on the certification, tell you plainly, and recommend that you consult a US tax attorney before anything further is prepared or said.

How does termination work?

Either side should be able to end the engagement in writing. The letter should set out the preparer's grounds, typically non-payment, failure to provide information, a request to file something the preparer believes to be inaccurate, or a conflict of interest, and should confirm that you can leave at any time. It should say what you pay for work done to the date of termination, that your original records are returned, and what happens to partly prepared returns. It should also say that any Form 2848 or Form 8821 will be withdrawn, and that the engagement ends automatically once the package is filed unless annual compliance is separately agreed.

Worked scenario: reading the letter against a real fact pattern

This is an illustration with assumed facts and counts, not a client case and not a fee quote. A US citizen has lived in London for fourteen years, works in investment banking, and has never filed a US return. She tells the preparer she has nine UK accounts, a wholly owned UK limited company used for consultancy income, and four UK funds in a general investment account.

On those assumed facts the scope clause would list three Forms 1040, six FBARs covering nine accounts plus any company accounts over which she has signature authority, three Forms 5471 for the company, Form 8938 for each of the three years if the filing thresholds are met, and Forms 8621 for the four funds across the return years, which is up to twelve forms. It would name Form 14653 as her certification, prepared with assistance and signed by her. UK Self Assessment, post-filing examination support and the following year's return would be listed as excluded.

During document collection two things emerge. A second dormant UK company appears on the public register with her as sole shareholder, and a tenth account, an old savings account opened by a parent, turns up in a bank's summary. Under the fee clause, the second company triggers a change order for three further Forms 5471, and the extra account is added to each FBAR year in which it existed. Under the client responsibilities clause, she confirms in writing that the record set is now complete. Under the timetable clause, the completion date moves because the company's accounts have to be obtained.

What should you check before you sign?

Read the letter against your own facts rather than in the abstract. Confirm that every company, every fund and every account you know of is reflected in the counts. Confirm the years. Confirm who signs what, who holds a PTIN, what you are consenting to under section 7216 and where your data will be held. Confirm what happens if the IRS writes to you after filing. Ask the preparer to explain any clause you do not follow, and treat reluctance to explain as information in itself.