Filing U.S. Tax Returns

Any U.S. citizen or green card holder with more than a de minimis income is obliged to file an annual U.S. income tax return, even if no U.S. tax is owed.

A taxpayer who has previously filed U.S. returns on a calendar year basis (i.e. reporting income from January 1 to December 31 each year) must continue to use that basis, unless an application (along with a fee) to switch to a fiscal year is accepted.

New taxpayers, however, can use a fiscal year basis for their first return, and continue to do so in subsequent years. This is appealing to Australia-based taxpayers as their Australian returns report income from July 1 to June 30 of the following year.

Because the IRS data system tracks returns for a limited number of past years, a U.S. taxpayer re-entering the system via the Streamlined program who has not filed a U.S. tax return after a certain year may be  treated as a new taxpayer, and allowed to use a fiscal year basis.

For simple returns ( those where no information returns, such as forms 8938, 5471, 3520 etc. are required) there will generally be no penalty for late filing if no tax is owed. However, steep penalties can attach to non-filing of FBARs (FinCen 114). Using the Streamlined Foreign Offshore compliance procedures, if appropriate, allows the taxpayer to come into compliance without the imposition of penalties.