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The short answer
If you live in the US and left Nigerian interest, rent or other income off past returns by mistake, the IRS Streamlined Domestic Offshore Procedures let you amend the last three years of returns, file six years of FBARs and pay a 5% penalty on the highest year-end total of the foreign assets involved. You must certify on Form 14654 that the failure was non-wilful, and you must already have filed returns for those three years.
Who the procedures are for
The IRS page for US taxpayers residing in the United States, reviewed on 10 July 2026, sets out the conditions:
- You fail the non-residency requirement of the foreign version of the procedures; in plain terms, you live in the US. For joint filers, one or both spouses fail it.
- You filed a US return, where one was required, for each of the most recent three years whose due dates have passed.
- You failed to report income from a foreign financial asset and pay the tax, and may also have failed to file FBARs or information returns, because of non-wilful conduct.
- You are a US citizen, a lawful permanent resident, or meet the substantial presence test.
The IRS describes non-wilful conduct as negligence, inadvertence, mistake, or conduct that results from a good-faith misunderstanding of the law. Not knowing that Nigerian interest had to go on a US return is the kind of case the procedures were built for. Hiding money deliberately is not.
What you file
- Amended returns (Form 1040-X) for the most recent three years, adding the Nigerian income, with any information returns that were required, such as Form 8938 or Form 3520.
- Delinquent FBARs for the most recent six years whose FBAR due dates have passed, filed electronically through FinCEN's BSA E-Filing System. Select "Other" as the late-filing reason and enter "Streamlined Filing Compliance Procedures".
- Form 14654, the certification that you are eligible, that all required FBARs are filed, that the failure was non-wilful, and that the penalty figure is correct.
- Payment of all tax and interest shown on the amended returns, plus the miscellaneous offshore penalty.
The returns go on paper to the IRS in Austin, Texas, at the Streamlined Domestic Offshore address on the IRS page, with "Streamlined Domestic Offshore" written in red at the top of the first page of each amended return. Use that address only for these filings.
The 5% penalty, worked through
The penalty is 5% of the highest aggregate balance or value of the foreign financial assets subject to it. For each year in the covered period, you add up the year-end balances and values; the highest of those yearly totals is the base.
Example only, with invented values in US dollars. Kunle, in Georgia, failed to report interest on two Nigerian accounts. Their combined year-end values were:
| Year | Combined year-end value (US$) |
|---|---|
| Year 1 | 30,000 |
| Year 2 | 42,000 |
| Year 3 | 38,000 |
| Year 4 | 35,000 |
| Year 5 | 28,000 |
| Year 6 | 33,000 |
The highest total is US$42,000, so the penalty is 5% × US$42,000 = US$2,100, on top of the tax and interest on the amended returns. Check with an adviser which years and assets fall inside the covered period for your case.
Before you start: the non-wilful question
Everything turns on the certification. Form 14654 asks you to describe, in your own words, why the income and accounts were not reported. The IRS page says that if the statement is incomplete or deficient, the returns are processed in the normal way, without the benefits of the procedures. That means the 5% penalty structure would not apply and ordinary penalties could.
Questions worth answering frankly before you sign:
- Did anyone, such as a preparer or a bank, ever tell you about foreign account reporting, and what did you do?
- Did you move money in ways designed to avoid notice, such as many small transfers?
- When a preparer or a form asked about foreign accounts, did you answer "no" while knowing about them?
- Is there a simple, documented reason you did not know, such as an account opened years before you moved to the US?
If any answer makes you uneasy, speak to a tax lawyer before filing.
When another route fits better
| Your situation | Usual route |
|---|---|
| All Nigerian income was reported; only FBARs are late | Late FBARs with a reasonable-cause explanation (see FBAR penalties and catching up) |
| Income left off by mistake, living in the US | Streamlined Domestic Offshore Procedures |
| Living outside the US | The foreign version of the Streamlined procedures, which has its own conditions |
| Possible wilful conduct or criminal exposure | A tax lawyer and the IRS Voluntary Disclosure Practice |
Getting the numbers right
- Gather Nigerian statements for every account for at least six years.
- Convert the income and the year-end balances to dollars with a consistent, published rate (which rate to use for naira).
- Claim any Nigerian income tax already withheld as a foreign tax credit on the amended returns (the foreign tax credit).
- Keep the workings behind the penalty figure; the IRS says you should keep them in case they are requested.
Where Pryme fits
Catching up is easier when statements are available on demand. Pryme customers can generate regular or verifiable statements through VerifyDoc.ai (receipts and statements). This page is information, not tax advice.
Questions people ask
What is the Streamlined Domestic Offshore Procedure?
An IRS route for US residents whose failure to report foreign income and assets was non-wilful: three years of amended returns, six years of FBARs and a 5% penalty.
How is the 5% streamlined penalty calculated?
On the highest of the yearly totals of year-end balances and values of the foreign assets involved, across the covered years.
Can I use the streamlined procedure if I did not file returns?
Not for missing original returns. The IRS says you must have filed returns for the most recent three years, and delinquent original returns cannot be filed under these procedures.
Where do I send streamlined domestic returns?
On paper to the IRS address in Austin, Texas, given on the IRS Streamlined Domestic Offshore page, marked in red at the top.
Sources
- IRS: U.S. taxpayers residing in the United States, Streamlined Domestic Offshore Procedures (reviewed 10 Jul 2026) · accessed Oct 2026
- Kaufman Rossin: The IRS quietly ended the Delinquent FBAR Submission Procedures (27 Aug 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.