Who are Accidental Americans?

The term Accidental Americans refers to people who hold U.S. citizenship—often without realizing it—but who have lived most or all of their lives outside the United States.
This can happen, for example, if someone was born in the U.S. to foreign parents who later returned to their home country, or if they were born abroad to at least one U.S. citizen parent.
Under U.S. law, citizenship is based partly on birthplace and parentage, so it’s possible to be a U.S. citizen even if you’ve never lived there or don’t feel connected to it at all.

Why is this an issue?

The United States is one of the few countries that taxes its citizens on worldwide income—no matter where they live. This means that Accidental Americans technically have U.S. tax obligations, including:

• Filing annual income tax returns with the IRS;
• Reporting foreign bank accounts through the FBAR (Foreign Bank Account Report);
• Potentially owing U.S. taxes, although tax treaties and foreign tax credits often reduce or eliminate double taxation.

Many Accidental Americans only discover this when they open a bank account abroad and are asked to prove they’re compliant with U.S. tax law, due to FATCA (Foreign Account Tax Compliance Act). Banks worldwide are required to report accounts held by U.S. citizens to the IRS.

What is the IRS Streamlined Foreign Offshore Procedure?

Realizing you’re a U.S. taxpayer after years of non-compliance can be stressful. Fortunately, the IRS created the Streamlined Foreign Offshore Procedure to help people catch up without facing severe penalties.

Who is eligible?
You may qualify if:

• You failed to file U.S. tax returns and FBARs because you didn’t know you were supposed to (i.e., your non-compliance was non-willful);
• You’ve lived outside the U.S. for at least 330 days in one of the last three years;
• You have filed a U.S. tax return for at least one of the past three years, or you’re willing to do so now.

How does it work?
The procedure allows you to:

1. File the last three years of tax returns;
2. File six years of FBARs;
3. Certify that your failure to file was non-willful;
4. Pay any taxes due—often reduced by credits for foreign taxes you’ve already paid.

Unlike other offshore disclosure programs, the Streamlined Procedure waives failure-to-file and accuracy penalties for eligible taxpayers, making it one of the most manageable ways to become compliant.

What about renouncing U.S. citizenship?

Many Accidental Americans choose to formally renounce their U.S. citizenship once they’re compliant, to avoid ongoing tax obligations and paperwork. However, you generally must prove you’re up to date with your U.S. taxes before you can renounce without risking an exit tax or other complications.

Key Takeaways

• If you’re an Accidental American, you may have U.S. tax filing and reporting obligations, even if you’ve never lived in the U.S.
• The IRS Streamlined Procedure is a practical, penalty-free way to get compliant.
• Professional advice is strongly recommended—U.S. tax law for expatriates can be complex, and mistakes can be costly.
• Do not hesitate to call US Tax Consultants +351 211 380 833