Streamlined Filing for Americans Living in Andorra: How to Catch Up on U.S. Taxes

Some Americans living in Andorra discover, sometimes years after the move, that their U.S. filing obligations continued. U.S. citizens are generally required to file federal tax returns and certain international reporting forms regardless of where they live, and a move abroad does not by itself end those obligations.

If prior-year U.S. tax returns, FBARs or other international forms were missed, the IRS Streamlined Filing Compliance Procedures may be one possible route to catch up — for taxpayers who meet the applicable requirements. This guide explains what the procedures are, how the foreign offshore track works, what "non-willful" conduct means, how many years are generally involved, and which forms may come into play. It is general educational information, not individualized tax or legal advice.

Can Americans Living in Andorra Catch Up on Missed U.S. Tax Filings?

Americans living in Andorra who failed to file required U.S. tax returns or international reporting forms may be able to use the IRS Streamlined Filing Compliance Procedures if they meet the applicable eligibility requirements. The procedures are designed for certain taxpayers whose noncompliance was non-willful, but qualification depends on the individual facts.

For qualifying taxpayers, the Streamlined Foreign Offshore Procedures are the track for U.S. taxpayers residing outside the United States who meet the applicable non-residency requirement and whose noncompliance resulted from non-willful conduct. A submission generally involves filing prior-year tax returns and international information forms, filing delinquent FBARs for the applicable years, paying the full amount of tax and interest due, and providing a certification.

Eligibility depends on the individual facts, and the procedures are not appropriate in every situation. Where noncompliance may not have been non-willful, or where an IRS examination has already begun, other routes or careful professional review may be needed first.

For general background on why these obligations continue abroad, see the IRS's U.S. citizens and resident aliens abroad guidance and our overview of U.S. tax filing for Americans living in Andorra.

What Are the IRS Streamlined Filing Compliance Procedures?

The Streamlined Filing Compliance Procedures are IRS procedures that provide a streamlined way to file amended or delinquent returns, together with terms for resolving tax and penalty obligations, for taxpayers who certify that their failure to report foreign financial assets and pay all tax due did not result from willful conduct.

Key characteristics, per the IRS's own description:

• They are designed for individual taxpayers — both U.S. taxpayers residing outside the United States and those residing in the United States, through two separate tracks.
• They require a certification of non-willful conduct. Taxpayers must certify that failures to report all income, pay all tax and submit all required information returns — including FBARs — were due to non-willful conduct.
• They involve filing prior-year returns and information returns, with the full amount of tax and interest due.
• They are not appropriate in all situations. Taxpayers under IRS civil examination for any taxable year, or under criminal investigation, are not eligible to use the procedures.

The procedures are sometimes informally described online as an "IRS tax amnesty" or "expat tax amnesty." That is an informal search phrase — not the formal IRS name — and it does not describe a legal outcome the IRS promises.

What Is the Streamlined Foreign Offshore Procedure?

The Streamlined Foreign Offshore Procedures are the track for eligible taxpayers residing outside the United States, described by the IRS in its instructions for U.S. taxpayers residing outside the United States. They differ from the Streamlined Domestic Offshore Procedures, which apply to U.S. residents and have different requirements, including a different penalty structure.

At a high level, a U.S. citizen living in Andorra seeking to use the foreign offshore track generally must:

• Meet the general eligibility criteria for the streamlined procedures.
• Meet the applicable non-residency requirement — for U.S. citizens and lawful permanent residents, in any one or more of the most recent three years for which the U.S. tax return due date has passed, the individual must not have had a U.S. abode and must have been physically outside the United States for at least 330 full days.
• Have failures that resulted from non-willful conduct.

Many Americans who have lived in Andorra for several years may meet the foreign-residency test, but the analysis is fact-specific — factors such as time spent in the United States and maintenance of a dwelling there can be relevant. For the IRS's discussion of "abode," see IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

What Does "Non-Willful" Mean?

Per the IRS's streamlined procedures guidance, 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.

This is a key concept, because the streamlined procedures are only for taxpayers whose noncompliance was non-willful. A lack of knowledge of U.S. filing requirements may be relevant — for example, among Americans who moved abroad and believed, in good faith, that living outside the United States ended their U.S. filing obligations — but eligibility depends on the complete facts and circumstances, and no general article can determine whether any particular taxpayer's conduct was non-willful.

Because this determination is fact-specific, the underlying facts should be reviewed carefully before any submission. A professional review may be appropriate — particularly where the taxpayer had prior U.S. filings, prior professional advice, or a history of unresolved IRS notices.

How Many Years of Tax Returns and FBARs Are Required?

Per the current IRS instructions, a Streamlined Foreign Offshore submission generally involves:

• Tax returns — most recent 3 years. For each of the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) has passed, file delinquent or amended tax returns, together with all required information returns.
• FBARs — most recent 6 years. For each of the most recent 6 years for which the FBAR due date has passed, file any delinquent FBARs (FinCEN Form 114).

The full amount of tax and interest due must be remitted with the delinquent or amended returns. Which calendar years fall within the lookback depends on the relevant due dates, so the applicable years should be determined for each taxpayer's situation rather than assumed.

What U.S. Tax Forms May Need to Be Filed?

The forms involved depend on the taxpayer's facts. Depending on the circumstances, a catch-up submission may potentially involve:

• Form 1040 — delinquent U.S. federal individual income tax returns (or Form 1040X amended returns, where earlier returns were incomplete or inaccurate).
• FBAR / FinCEN Form 114 — for reportable foreign financial accounts, for the applicable six-year period.
• Form 8938 — where specified foreign financial assets exceed applicable thresholds.
• Form 8621 — where foreign investment products, such as certain European funds, are PFICs and PFIC reporting applies.
• Form 5471 — where the taxpayer owns or controls an interest in a foreign corporation in applicable circumstances (see our Form 5471 guide for Americans living in Andorra).
• Other international information returns depending on the facts — the IRS instructions give Forms 3520 and 5471 as examples of information returns that must be included where required. Current IRS guidance also addresses previously non-reported income related to specified foreign corporations and section 965, where applicable.

Whether any of these forms applies in a specific case should be reviewed before filing. For the reporting regimes most common in an Andorra context, see our guides to the FBAR for Americans living in Andorra, Form 8938 and FATCA for Americans living in Andorra and PFIC for Americans living in Andorra.

Can Streamlined Apply If I Owe Little or No U.S. Tax?

Possibly. Eligibility for the streamlined procedures is not determined solely by whether U.S. income tax is due. U.S. citizens may meet filing thresholds in some years and not others, and international reporting obligations — such as the FBAR or Form 8938 — can exist in years where little or no U.S. income tax is owed.

What the procedures require is the full amount of tax and interest due in connection with the delinquent or amended returns. Where little or no tax is due, that element may be straightforward — but the reporting, certification and eligibility requirements still apply, and no outcome is a zero-tax or zero-penalty guarantee. Each person's facts must be reviewed.

Are Penalties Waived Under Streamlined Foreign Offshore Procedures?

Per the IRS's current instructions, an eligible taxpayer who complies with all of the instructions for 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. This treatment is specific to the foreign offshore track for qualifying taxpayers; the domestic track has different penalty terms.

Important conditions and exceptions apply:

• If returns filed under the procedures are later examined and the IRS determines the original tax noncompliance was fraudulent, or that an FBAR violation was willful, the penalty protections do not apply in the manner described.
• Previously assessed penalties are not abated.
• If the IRS determines an additional tax deficiency for a return submitted under the procedures, it may assert applicable additions to tax and penalties relating to that additional deficiency.
• Returns submitted under the procedures are processed like any other return and may be selected for audit under the existing audit selection processes.

Accordingly, the procedures should not be described as a guaranteed penalty-free outcome in every scenario, and the informal term "amnesty" does not capture these conditions.

What If I Also Missed FBARs?

Delinquent FBARs for the applicable years are part of a Streamlined Foreign Offshore submission where the procedures apply — the instructions call for FBARs for each of the most recent 6 years for which the FBAR due date has passed.

Separately from the streamlined procedures, the IRS also describes delinquent international information return submission procedures, and delinquent FBAR submission procedures exist as well. These routes are not automatically interchangeable: which route is appropriate depends on the taxpayer's facts, whether prior returns were filed, and the reasons for the noncompliance. Self-selecting a route without a full factual review can create complications later.

For a detailed Andorra-focused explanation of the FBAR itself, see FBAR requirements for Americans living in Andorra.

What If I Also Missed Form 8938 or PFIC Reporting?

Missing international forms can complicate catch-up filings. Where Form 8938 was required but not filed, it is generally addressed through the required information returns included with the prior-year returns, where a streamlined route is used. Where foreign investment funds are PFICs, Form 8621 reporting may need review for the applicable years — and PFIC analysis can involve historical account information, which may take time to gather from European institutions.

How these forms are treated in any catch-up submission depends on the individual facts. For background, see our guides to Form 8938 and FATCA for Americans living in Andorra and PFIC for Americans living in Andorra.

What Is the Streamlined Certification?

A Streamlined Foreign Offshore submission generally includes a certification of non-willful conduct. For U.S. citizens residing outside the United States, the certification is made on Form 14653, Certification by U.S. Person Residing Outside of the United States, under the current IRS instructions.

The certification asks the taxpayer to explain the reasons for the failure to file tax returns, report all income, pay all tax and submit all required information returns — and it must be accurate and complete. Per the IRS, an incomplete or otherwise deficient statement results in the returns being processed in the normal course without the benefit of the procedures' terms.

Because the certification is personal and fact-specific, it should not be drafted from generic templates or boilerplate language. The explanation must reflect the taxpayer's own circumstances and history — a professional review can help identify which facts are relevant, while the content must remain truthful and the taxpayer's own.

What If My Noncompliance May Not Have Been Non-Willful?

If the facts suggest the conduct may not have been non-willful, the streamlined procedures may not be appropriate. Submitting a certification that is not accurate or complete is a serious matter, and the facts should be reviewed before any filing is made.

In such situations, other options may need to be considered. The IRS notes that taxpayers concerned their failure was due to willful conduct may consider the IRS Criminal Investigation Voluntary Disclosure Practice and should consult with their professional or legal advisers. Other paths — such as delinquent international information return procedures — may also be relevant in specific fact patterns. Which option fits depends entirely on the facts, and this article does not provide legal or criminal-defense advice.

Streamlined Filing Checklist for Americans Living in Andorra

Use this checklist as a starting point for organizing a possible catch-up — not as individualized advice:

• Identify missing U.S. tax years — which of the most recent 3 return years are outstanding.
• Identify missing FBAR years — which of the most recent 6 FBAR years are outstanding.
• Gather income records for each applicable year.
• Gather foreign account statements, including Andorran and other European institutions.
• Identify Form 8938 assets and the applicable thresholds for each year.
• Identify foreign investment funds that may be PFICs and gather account history.
• Identify foreign companies or entities that may require information returns.
• Determine whether the foreign-residency requirement is met.
• Review whether the conduct may qualify as non-willful on the complete facts.
• Calculate any tax and interest due for each year.
• Prepare the required returns and information forms.
• Prepare an accurate, complete, fact-specific certification (Form 14653).
• Retain supporting records, including statements and confirmations.
• Seek professional review before submission where facts are complex.

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U.S. Tax Professional in Andorra
Aleksandr Isakov, CPA, Principal of US CAN Tax Group, is based in Andorra and has 25+ years of experience in U.S. tax and cross-border tax matters.

For how the firm works with clients there, see U.S. tax services for Americans living in Andorra.

The information in this article is general educational information and does not constitute individualized tax, legal, immigration, investment, or financial advice. U.S. filing and reporting requirements depend on each person's circumstances and applicable law.