Can a US private banker in London use the Streamlined Foreign Offshore Procedure?

Yes, if the failures were non-willful, at least one of the last three tax years meets the non-residency test of no US abode and at least 330 full days outside the United States, and the IRS has not opened an examination of those years. Working in finance does not disqualify you, but your Form 14653 must explain specifically why your professional knowledge did not extend to your own US filing obligations.

Do I need to report client accounts I can access at my London bank on my FBAR?

Only if you have signature or other authority, meaning personal power to control the disposition of assets by direct communication with the institution. Passing client instructions to operations usually differs from that, but discretionary authorisations and personal signatory or attorney roles need careful review. The employer exceptions in 31 CFR 1010.350(f) cover the employer's own accounts at specified institutions, not client accounts generally.

Is there any penalty under the Streamlined Foreign Offshore Procedure?

No. Taxpayers who comply with the foreign version are not subject to failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties for the covered years. You pay the tax shown on the three returns plus statutory interest. The miscellaneous offshore penalty applies only to the domestic version, and penalties can return only if an examination finds fraud or a willful FBAR violation.

Does my UK bank report my accounts to the IRS under FATCA?

Very probably. Under the UK-US FATCA agreement and the International Tax Compliance Regulations 2015, UK financial institutions report accounts held by US citizens to HMRC, which exchanges the information with the IRS. That makes coming forward early important, but the self-certifications you gave declaring your US status can also support a non-willful narrative because they show openness rather than concealment.

Is my stocks and shares ISA tax-free for US purposes?

No. The ISA wrapper gives UK tax relief only. The US treats it as an ordinary foreign investment account, so dividends, interest and gains are reportable on your US return. UK and other non-US collective funds held inside it are usually PFICs requiring Form 8621 each year, and the account is reported on the FBAR and, if thresholds are met, on Form 8938.

How many years do I file under the Streamlined Foreign Offshore Procedure?

Three years of US income tax returns, being the three most recent years whose due dates have passed, with all required information returns such as Forms 8938 and 8621, plus FBARs for the six most recent years whose FBAR due dates have passed. FBARs are filed electronically through FinCEN's BSA E-Filing System, while the returns, Form 14653 and payment are sent on paper.

Streamlined Foreign Offshore: US Private Bankers in London

The IRS Streamlined Foreign Offshore Procedure (SFOP) is the penalty-free route back into US compliance for a US citizen or green-card holder working in London as a private banker, wealth manager or relationship manager who has missed US returns and FBARs through non-willful conduct. Most London-based bankers qualify on residence, because only one of the last three tax years has to pass the IRS non-residency test. The harder parts are specific to the job: deciding whether authority over client accounts creates FBAR filings, reporting deferred bonuses and share awards correctly, dealing with UK funds that are PFICs, and writing a non-willful certification that is credible from someone who works in finance.

In the returns we prepare for London bankers, the first question is the one a sceptical examiner would ask: you work in a bank, so how could you not know? This guide answers it, then works through each issue in filing order.

What is the IRS Streamlined Foreign Offshore Procedure (SFOP) and who qualifies?

The Streamlined Foreign Offshore Procedure is an IRS programme for US individuals living outside the United States who failed to report income from foreign financial assets, pay the tax due on it, and possibly file FBARs, where that failure resulted from non-willful conduct. The IRS defines non-willful conduct as conduct due to negligence, inadvertence or mistake, or conduct resulting from a good faith misunderstanding of the requirements of the law. The terms are published on the IRS page for US taxpayers residing outside the United States at https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states.

The penalty position is what makes the programme valuable for a high earner. Taxpayers who comply with the foreign version are not subject to failure-to-file, failure-to-pay or accuracy-related penalties, or to information return and FBAR penalties, for the covered years. There is no miscellaneous offshore penalty in the foreign version at all; that charge belongs only to the domestic version. You pay the full tax shown on the returns plus statutory interest. Returns filed this way can still be examined, and penalties come back only if an examination finds that the original noncompliance was fraudulent or that an FBAR violation was willful. Penalties assessed before the submission for the covered years are not abated.

To qualify, a London banker needs to satisfy three conditions:

Non-residency: in at least one of the three most recent years for which the US return due date has passed, you had no US abode and were physically outside the United States for at least 330 full days. If you file jointly, both spouses must meet the applicable non-residency requirement.
Non-willful conduct: you must certify on Form 14653, under penalties of perjury, that the failures were non-willful and explain the specific facts behind them.
No current IRS examination or criminal investigation of the years in question.

Does a London private banker meet the 330-day non-residency test?

Usually, but it must be proved from records rather than assumed. A full day means a complete 24-hour period outside the United States, so the day you land in New York for a client event and the day you fly home are both lost. Because the test only has to be met in one of the three years, a single heavy travel year is rarely fatal, but if every year is marginal we rebuild the count from passport stamps, airline histories, corporate travel bookings and expense claims, and keep that evidence on file.

The abode limb is seldom a problem for someone employed in London, but a US home kept available for your own use deserves a closer look. If all three years fail the test, the foreign version is closed and the comparison becomes the penalty-bearing domestic version.

What do you file under the Streamlined Foreign Offshore Procedure?

The submission package is fixed by the IRS, and every piece has to be complete before anything is posted:

US federal income tax returns for the three most recent years for which the due date (including valid extensions) has passed: a delinquent Form 1040 for any year never filed, or Form 1040-X for any year filed incorrectly.
Every information return required for those years, which for bankers commonly means Form 8938 and Form 8621, and Form 5471 if you own a stake in a foreign company that meets the filing categories.
FBARs (FinCEN Form 114) for the six most recent years for which the FBAR due date has passed, filed electronically through FinCEN's BSA E-Filing System, selecting Other as the reason for late filing and referencing the Streamlined Filing Compliance Procedures in the explanation box.
A signed Form 14653 certification of non-willful conduct, with the original sent in and copies attached to each return and information return (not to the FBARs).
Payment of all tax due plus statutory interest, with your taxpayer identification number on the payment.
Each return and information return marked Streamlined Foreign Offshore in red at the top of the first page, then sent on paper to the dedicated IRS address in Austin listed on the IRS page; the procedures do not accept electronic submission of the returns.

File the FBARs and the return package together: FBAR balances must reconcile to the income on the returns and the assets on Form 8938.

Do private bankers have to report signature authority over client accounts on an FBAR?

This is the question that separates bankers from every other expat profession. FinCEN's guidance at https://www.fincen.gov/report-foreign-bank-and-financial-accounts confirms that a US person with a financial interest in, or signature authority over, foreign financial accounts must file an FBAR if the aggregate value of those accounts exceeds $10,000 at any time during the calendar year. A London bank account is a foreign financial account from a US perspective, whether it belongs to you, your employer or a client.

The regulation, 31 CFR 1010.350, published at https://www.law.cornell.edu/cfr/text/31/1010.350, defines signature or other authority as the authority of an individual, alone or with another person, to control the disposition of money, funds or other assets held in an account by direct communication, in writing or otherwise, to the person with whom the account is maintained. The test is personal power to direct the account, not job title. In practice we sort client-facing bankers into three groups:

Bankers who take client instructions and pass them to operations for execution, with the bank acting on the client's authority. In the cases we prepare, this does not usually make the banker a person who controls disposition, but it needs to be confirmed against the bank's actual mandate and payment-authorisation process.
Bankers or portfolio managers who can move funds or approve payments on discretionary mandates, or who hold individual authorisation limits on accounts, where the analysis is closer and must be documented account by account.
Bankers who are named personally as signatory or attorney on a particular client's account, often a family member or a long-standing client relationship. This is personal signature authority and is reportable unless an exception applies.

Signature authority alone does not make the money yours, so it does not create income on your return. The IRS comparison page at https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements notes that signature authority without any other interest in the account is generally not reported on Form 8938, while it generally is reported on the FBAR, subject to exceptions. Where a banker has signature authority over 25 or more foreign accounts, the regulation lets the FBAR give the number of accounts and certain basic information instead of full detail for each, with full details to be provided if requested.

Does the employer exception in 31 CFR 1010.350(f) cover bankers at UK banks?

Often not, and this is where London bankers are most frequently misinformed by colleagues. The exceptions in paragraph (f)(2) of the regulation relieve certain officers and employees from reporting signature authority, provided they have no financial interest in the account. They are narrow:

Paragraph (f)(2)(i) covers officers and employees of a bank examined by the Office of the Comptroller of the Currency, the Federal Reserve Board, the FDIC, the Office of Thrift Supervision or the National Credit Union Administration, and only for accounts owned or maintained by the bank itself.
Paragraph (f)(2)(ii) gives similar relief to officers and employees of financial institutions registered with and examined by the SEC or the CFTC.
Paragraph (f)(2)(iii) covers employees of authorised service providers in respect of accounts of SEC-registered investment companies.
Paragraph (f)(2)(iv) covers officers and employees of an entity with equity securities listed on a US national securities exchange, for foreign financial accounts of that entity, and extends to certain US subsidiaries included in the parent's consolidated report.
Paragraph (f)(2)(v) covers officers and employees of an entity with equity registered under section 12(g) of the Securities Exchange Act, for that entity's accounts.

Two limits matter for a London private banker. First, the exceptions describe accounts of the employer, meaning accounts owned or maintained by the bank or the listed entity; they do not on their face reach a client's own account, so a banker relying on them for client accounts needs a far more careful analysis. Second, a bank incorporated and supervised only in the UK is not examined by the US federal regulators named in (f)(2)(i), so that paragraph does not help its staff unless another limb, such as a US listing, applies. Employees of a London branch of a US-examined bank are in a different position for the bank's own accounts. We document which limb is relied on, and why, in the working papers behind each FBAR.

How are deferred bonuses and share awards reported on the US return?

Private bank remuneration in London commonly mixes salary, an upfront cash bonus, deferred cash and deferred shares that vest over several years, sometimes with retention conditions after vesting. The US and UK systems do not always tax these at the same moment or attribute them to the same period, and the US return has to report the income in the year US rules treat it as received, not simply copy the UK payslip.

The practical problems we see are recurring. Awards granted while you worked partly in the US or in another country may need part of their value sourced to that period. UK tax deducted under PAYE on vesting must be matched to the same income on the US return so that foreign tax credits line up with the right category and year. Shares sold to cover tax at vesting create a US cost basis that UK paperwork rarely shows, which leads to overstated gains later.

Shares held after vesting in a nominee or employee share account in the UK are themselves held in a foreign financial account, which brings them into the FBAR and Form 8938 analysis. Unvested awards are a different question and are assessed on their terms rather than reported automatically.

How are UK workplace pensions handled in a Streamlined Foreign Offshore filing?

Banks in London typically operate generous workplace pension arrangements, and senior bankers often also hold personal pensions and older schemes from previous employers. The UK grants tax relief on contributions and growth; the US does not automatically follow. Whether employer contributions and growth inside a UK scheme are taxable in the US each year, or deferred, depends on the scheme type, the US-UK income tax treaty, and the elections made, so each scheme is analysed separately rather than lumped together.

The IRS page itself recognises this area: it offers retroactive relief for taxpayers seeking a late treaty-based election to defer income on certain retirement and savings plans, requested with a signed statement under penalties of perjury and supporting documents. On the reporting side, the IRS comparison of Form 8938 and FBAR requirements does not specifically address foreign pensions, which is exactly why practice varies. Where the reporting position is uncertain, we disclose rather than omit, because an omission can undermine the whole certification.

Are UK funds and ISAs a PFIC problem requiring Form 8621?

Usually yes, and bankers are especially exposed because their personal portfolios are often built from the same UK-domiciled or Irish-domiciled collective funds they recommend to clients. Most non-US pooled funds are passive foreign investment companies for US purposes. Each PFIC holding generally requires Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, described at https://www.irs.gov/forms-pubs/about-form-8621.

An ISA wrapper changes nothing for US purposes. UK income and gains inside an ISA are free of UK tax, but the US sees an ordinary investment account holding foreign funds, so the income is taxable and the funds remain PFICs. Without an election in place, the default PFIC regime can produce a much heavier result on distributions and sales than ordinary capital gains treatment, so for a Streamlined filing we gather full transaction histories, distribution records and, where the fund publishes them, reporting statements, and model the alternatives before choosing a method. Direct holdings of individual UK or US shares are not PFICs and are usually far simpler.

Do you need Form 8938 as well as FBARs?

Very likely. Form 8938 is attached to the income tax return and covers specified foreign financial assets, while the FBAR goes to FinCEN separately; filing one does not satisfy the other. According to the IRS comparison page, a taxpayer living abroad files Form 8938 if foreign assets exceed $200,000 on the last day of the year or $300,000 at any time during the year when unmarried or filing separately, and $400,000 or $600,000 respectively when married filing jointly. A London banker with a home-country current account, savings, an ISA, vested shares and pension balances often passes those levels. Signature-only client accounts are generally left off Form 8938, while foreign mutual funds held personally are reported on both forms.

Your bank already reports you under FATCA: what does that mean for your filing?

It means the IRS may already hold data on your UK accounts. HMRC's International Exchange of Information Manual, at https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim400040, explains that the UK and the US signed an agreement on 12 September 2012 to implement FATCA, and that the International Tax Compliance Regulations 2015 require UK financial institutions to identify and report to HMRC information on financial accounts held by US citizens, which is then exchanged with the IRS.

For a banker, this cuts two ways. Your personal accounts, including those at your own employer, have very probably been reported against your US status, so the case for coming forward before the IRS makes contact is strong: the Streamlined procedures are not available once you are under examination. But FATCA self-certification also helps the non-willful narrative. When you opened those accounts, you declared your US citizenship to the bank. Someone who openly certifies their US status to financial institutions is not behaving like someone trying to hide assets from the IRS.

How can someone who works in banking credibly certify non-willful conduct?

Form 14653 requires a specific, factual explanation of why the failures happened. Generic statements such as I did not know I had to file are weak from anyone, and from a financial professional they invite challenge. The IRS judges non-willfulness on the full facts, and a reviewer will consider your education, your role and your exposure to compliance training. Sophistication does not make a failure willful, but it raises the bar for the explanation.

The credible narratives we see share one feature: they explain why this person's specific expertise did not extend to their own US filing. A London private banker typically works under UK regulation, serves clients who are mostly not US persons, and is trained on UK conduct rules, suitability and anti-money-laundering, not on US individual income tax. Knowing that clients have tax obligations is not the same as knowing that a US citizen who has paid full UK tax through PAYE still owes US returns, FBARs and PFIC statements. Many came to London young, assumed UK withholding settled everything, or were told by someone that no US filing was needed because no US tax would be due.

What the narrative must not do is contradict documents. If you attended a firm training session on FBARs, held a role covering US-person accounts, or received a letter about your US filing obligations, the certification must address that honestly. If those facts make non-willfulness genuinely doubtful, the right answer may be a different route, and that decision is made before filing, not after.

What evidence supports a banker's non-willful narrative?

The gap angle almost no guide covers is that bankers have unusually good evidence of openness, because their employers require it. We assemble the following before drafting Form 14653:

Personal account dealing disclosures and pre-clearance records held by the employer's compliance function, which show your personal accounts and trades were openly declared rather than concealed.
FATCA self-certification forms or account-opening documents showing you declared US citizenship or US tax residence to each UK institution.
Job descriptions, mandates and client-segment policies showing your role excluded US individual tax and, often, US-person clients.
Training records showing the compliance content you actually received, which usually concerns UK regulation and client due diligence rather than personal US filing.
UK tax returns, P60s and payslips showing full UK tax paid, which supports a good faith belief that your tax affairs were in order.
Correspondence or notes of anything you were told suggesting no US filing was required, and evidence of when you first learned otherwise and how quickly you acted.

Worked scenario: a US private banker in London coming forward

Illustration only, with figures invented for the example and an assumed exchange rate of 1.30 US dollars to the pound. Dana is a US citizen who has lived in London for nine years and works as a relationship director at a UK-incorporated private bank whose shares are not listed in the United States. She last filed a US return before moving. She files UK self assessment, pays UK tax through PAYE, and was physically outside the United States for well over 330 full days in each of the last three years.

Her personal assets at the end of the most recent year: a current account and savings of about 60,000 pounds, a stocks and shares ISA of 180,000 pounds invested in four UK-domiciled funds, vested deferred shares of 150,000 pounds held in an employee share account, and a workplace pension of 400,000 pounds. She is also named as attorney on her mother's UK account and has authority under a discretionary mandate over a handful of client accounts.

Our preparation follows the evidence. Her own accounts plainly exceed the $10,000 FBAR aggregate, so six FBARs are needed. Her personal foreign assets, before the pension is even counted, come to about 390,000 pounds, roughly $507,000 at the assumed rate, which is over the $200,000 year-end level for an unmarried taxpayer abroad, so Form 8938 is required for the returns. The four ISA funds need Form 8621 in each year, with income and gains reported despite the ISA wrapper. The deferred share vestings are reconstructed from award statements, with UK tax matched for foreign tax credits. Her mother's account is reported on the FBAR as signature authority, and the discretionary client accounts are analysed against the bank's mandate documents, because no (f)(2) exception applies to a UK-only bank. Her Form 14653 narrative cites her personal account dealing disclosures and FATCA self-certifications. Because UK tax on her salary is high, foreign tax credits are likely to cover much of the US liability on earned income; the residual cost usually sits in the fund income and gains, plus interest.

How we prepare a Streamlined Foreign Offshore submission for a London banker

We confirm eligibility from travel records, map every account with a financial interest or signature authority across six FBAR years with the regulatory analysis documented, prepare the three returns with information returns, PFIC computations, award reconstructions and foreign tax credits, then draft Form 14653 from your evidence and file the package, payment and FBARs together.

If you are a US citizen or green-card holder working in private banking or wealth management in London and you are behind on US filings, the Streamlined Foreign Offshore Procedure remains the cleanest way back. You can learn more about our US expat tax preparation and Streamlined filing compliance services, or book a confidential consultation through our contact page.