Accidental Americans are U.S. citizens (by birth in the United States or by descent from U.S. citizen parents) who grew up abroad and never filed U.S. tax returns. Under citizenship-based taxation, you remain a U.S. taxpayer on your worldwide income and worldwide financial accounts no matter where you live or how long you have been away. This means Form 1040 filing obligations, FBAR (FinCEN 114) when the aggregate value of all foreign financial accounts exceeds $10,000 at any time in the year, and FATCA Form 8938 when asset thresholds are met can all still apply.
First steps
- Confirm citizenship status (U.S. passport, birth certificate, prior U.S. residence or parental citizenship records). Dual citizenship or foreign naturalization generally does not terminate U.S. citizenship or tax obligations.
- List all unfiled years (starting from the year you first had filing threshold income) and all foreign financial accounts, including bank, brokerage, retirement, and insurance products with cash value.
- Screen for the appropriate IRS relief program(s), most commonly the Streamlined Foreign Offshore Procedures (SFOP) or the Relief Procedures for Certain Former Citizens, with a qualified preparer. Eligibility depends on your residency status, whether you have expatriated, net worth/tax liability, and whether the noncompliance was non-willful.
Two main IRS relief programs for Accidental Americans
There are two distinct IRS programs for individuals with non-willful past noncompliance to come into compliance. Eligibility is highly fact-specific and requires certification of non-willful conduct (conduct due to negligence, inadvertence, mistake, or good-faith misunderstanding of the law). You must generally apply before the IRS contacts you about the years at issue. Consult a qualified tax professional to determine which (if either) may apply to your situation.
Streamlined Foreign Offshore Procedures (SFOP)
Available to U.S. citizens and green-card holders who reside outside the United States. It allows you to file three years of delinquent income tax returns and six years of FBARs. If you meet the eligibility criteria, including a non-residency test (generally, no U.S. abode and physically outside the U.S. for at least 330 full days in at least one of the last three years for which a return was due), and certify that your failures were non-willful, the IRS typically imposes no or very limited penalties.
This program is for people who are still U.S. persons and want to catch up on their ongoing filing and reporting obligations.
Relief Procedures for Certain Former Citizens
A separate program (announced in 2019) specifically for individuals who have relinquished (or intend to relinquish) U.S. citizenship after March 18, 2010. It can allow you to come into compliance and avoid being treated as a "covered expatriate" under the exit tax rules of IRC §877A, while also providing relief from unpaid taxes, interest, and penalties for the year of expatriation and the five prior years, provided you meet strict low-net-worth and low-tax-liability thresholds (net worth under $2 million at expatriation and submission; aggregate tax liability of $25,000 or less for the relevant years), your noncompliance was non-willful, and you have no filing history as a U.S. citizen or resident.
This program is particularly relevant for Accidental Americans who have already expatriated or are considering expatriation and had limited U.S. ties and low income/net worth.
Partner screening for Streamlined options: Streamlined Amnesty, accidental Americans. The Relief Procedures have their own specific submission requirements; a qualified preparer can help evaluate both pathways.