Form 14654: IRS PDF, Instructions, and 5% Penalty Example
Last reviewed: July 18, 2026. Educational information only; offshore compliance decisions require review of the taxpayer's complete facts.
IRS Form 14654, Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures, is used by eligible taxpayers making a Streamlined Domestic Offshore submission. The procedure generally requires three years of amended returns, six years of delinquent FBARs when required, a non-willfulness certification, and a 5% Title 26 miscellaneous offshore penalty calculated from the highest aggregate year-end balance or value of covered foreign financial assets.
Download the official Form 14654 PDF
Use the current fillable Form 14654 PDF from IRS.gov. Do not download a saved copy from an unofficial form library: the certification language and instructions can change.
Read the form together with the IRS Streamlined Domestic Offshore Procedures and domestic streamlined FAQs.
Form 14654 eligibility checklist
The domestic streamlined procedure may apply only when all relevant requirements are met, including:
- You are an eligible individual U.S. taxpayer or estate and do not meet the procedure's non-residency requirement.
- You previously filed a U.S. income tax return, if required, for each of the most recent three years whose due dates have passed.
- Foreign income, tax, FBAR, or international-information reporting was incomplete.
- The failures resulted from non-willful conduct, which the IRS defines here as negligence, inadvertence, mistake, or a good-faith misunderstanding of the law.
- The IRS has not initiated a civil examination of a return for any tax year, and you are not under IRS criminal investigation.
- You have a valid Social Security number or meet the procedure's ITIN requirements.
This is not a self-diagnosis checklist. Willfulness is fact-intensive. A taxpayer with possible intentional conduct, prior warnings, false answers, concealment, or other risk indicators should obtain legal advice before submitting a certification under penalties of perjury.
What periods does Form 14654 cover?
| Filing component | General covered period |
|---|---|
| Amended income tax returns | Most recent 3 years for which the return due date, including a properly applied extension, has passed |
| Delinquent FBARs | Most recent 6 years for which the FBAR due date has passed |
| Penalty computation | Assets included across the covered tax-return and FBAR periods |
The domestic procedure uses amended returns; the IRS says delinquent original income tax returns cannot be filed through it.
How is the 5% penalty calculated?
The IRS calculation uses year-end values—not the highest balance reached during each year:
- Identify foreign financial accounts that should have been reported on an FBAR during each covered FBAR year.
- For the three covered return years, identify foreign financial assets that should have been reported on Form 8938, or whose related gross income was not reported.
- Enter the taxpayer's personal-interest value for each included asset as of December 31 of the applicable year.
- Add the included year-end values for each year.
- Select the highest annual aggregate.
- Multiply that amount by 5%.
An asset does not automatically enter the penalty base merely because it is foreign. For example, the IRS FAQ says directly held foreign real estate that is not reportable on FBAR or Form 8938 is not included. Entity interests, trusts, pensions, jointly owned accounts, and other assets can require specialized analysis.
Fictional Form 14654 penalty example
Assume an eligible taxpayer has already determined, with professional review, which assets belong in the penalty base. Their included December 31 totals are:
| Covered year | Aggregate included year-end value |
|---|---|
| Year 1 | $120,000 |
| Year 2 | $155,000 |
| Year 3 | $180,000 |
| Year 4 | $172,000 |
| Year 5 | $210,000 |
| Year 6 | $198,000 |
The highest annual aggregate is $210,000. The fictional miscellaneous offshore penalty is:
$210,000 × 5% = $10,500
This illustrates the arithmetic only. It does not determine whether an account is covered, whether the taxpayer qualifies, or whether streamlined filing is the correct procedure.
Form 14654 questions people ask
Is IRS Form 14654 fillable online?
The IRS provides a fillable PDF, but Form 14654 is part of a paper Streamlined Domestic Offshore submission. Download the current Form 14654 PDF, complete it, and follow the live submission instructions. Delinquent FBARs are filed separately and electronically through FinCEN.
Is the 5% penalty based on the highest account balance?
Not on the highest balance reached at any moment during a year. After determining which assets belong in the penalty base, Form 14654 uses the taxpayer's personal financial interest in those assets on December 31 of each applicable year. The penalty is 5% of the highest aggregate year-end total across the covered period.
Does every foreign asset count toward the Form 14654 penalty?
No. The IRS rules identify specific foreign financial accounts and assets. For example, directly held foreign real estate that is not reportable on either FBAR or Form 8938 is excluded. Ownership through a foreign entity can produce a different result, so the legal owner and reporting rules matter.
Can Form 14654 be used for willful conduct?
No. The streamlined procedures require a certification under penalties of perjury that the relevant failures resulted from non-willful conduct. The IRS defines non-willful conduct as negligence, inadvertence, mistake, or a good-faith misunderstanding of the law. Facts suggesting intentional concealment require legal advice before any submission is made.
What belongs in the non-willfulness narrative?
Form 14654 requires the taxpayer's specific facts, including relevant personal and financial background. A useful review outline asks:
- What reporting failed, and for which accounts, assets, income, forms, and years?
- How and why did the failure begin?
- What did the taxpayer understand at the time, and what advice was requested or received?
- When and how was the problem discovered?
- What actions were taken after discovery?
- If a professional adviser was involved, what was disclosed to that adviser and what was the engagement?
- Are all statements consistent with returns, FBARs, account records, communications, and prior filings?
Do not copy a generic “reasonable cause” or non-willfulness sample letter. The IRS requires the facts of the actual taxpayer, and a polished template that omits adverse facts can create more risk rather than less.
Use the separate Form 14654 non-willfulness statement guide for a records-first drafting process and fictional outline that is deliberately not reusable certification language.
Submission steps
The current IRS instructions generally require the taxpayer to:
- Prepare complete and accurate Forms 1040-X for the three covered return years, with required information returns.
- Write “Streamlined Domestic Offshore” in red at the top of each amended return and information return.
- Complete and sign the original Form 14654 certification and attach copies as directed.
- Pay the tax, statutory interest, and 5% miscellaneous offshore penalty.
- Mail the paper submission to the special IRS address listed in the current procedure.
- Electronically file required delinquent FBARs through FinCEN and use the late-filing explanation specified by the IRS.
Follow the live IRS instructions when assembling a real submission. An incomplete certification or failure to follow the special instructions can cause the returns to be processed normally without the procedure's favorable terms.
For general procedural questions, the IRS domestic streamlined FAQ lists the Streamlined Hotline at 267-466-0020 and says the hotline does not provide case-specific or legal advice.
Form 14654 versus Form 14653
Form 14654 belongs to the domestic procedure and includes the 5% penalty. Form 14653 belongs to the foreign procedure for taxpayers who satisfy its non-residency test. The two procedures have different eligibility and penalty rules; choosing based only on current mailing address is not sufficient.
Compare Form 14654 and Form 14653 side by side →
Why this matters for the EA exam
The EA exam's Part 3 tests representation, practice, procedure, penalties, and practitioner judgment. The durable lesson is not memorizing a client's filing position: it is recognizing eligibility limits, using current primary authority, protecting the accuracy of a certification, and escalating possible willfulness to an attorney.
Practice Part 3 representation questions →
Primary IRS sources
- Form 14654 PDF
- Streamlined Domestic Offshore Procedures
- Streamlined Domestic Offshore FAQs
- General Streamlined Filing Compliance Procedures
Related: FBAR Penalties and Late Filing · How to Find an EA Who Knows Foreign Taxes · EA Exam Part 3 Topic Breakdown