The IRS recently changed its' procedure for handling delinquent information returns. The 2012 OVDP FAQ# 18 originally provided automatic penalty relief, but was only available to taxpayers who were fully tax compliant.
Then the IRS modified the Delinquent International Information Return Submission Procedures and clarified how taxpayers may file delinquent international information returns in cases where there was reasonable cause for the delinquency. Taxpayers who had unreported income or unpaid tax were not precluded from filing delinquent international information returns. However, unlike the procedures described in OVDP FAQ#18, penalties may have been imposed under the Delinquent International Information Return Submission Procedures if the Service does not accept the explanation of reasonable cause.What Does This Mean For Streamlined Offshore And Domestic Procedures?