Catch-Up
Streamlined Filing for Past Korean Inheritance
In Brief
Missed Form 3520, FBAR, or Form 8938 from a Korean inheritance years ago? The IRS Streamlined Filing Compliance Procedures let you catch up with 0% penalty (if you lived abroad) or 5% penalty (if US-resident) — versus 25-50% if discovered through audit.
Who Qualifies as "Non-Willful"
Conduct due to negligence, inadvertence, mistake, or a good-faith misunderstanding of the law. Common qualifying scenarios: "My Korean father passed in 2018; I didn't know about Form 3520 until 2025" or "I assumed my US accountant was handling foreign reporting."
Disqualifying: knowingly concealing assets, ignoring prior IRS correspondence, or creating structures to hide the inheritance.
Two Tracks
| Track | Who | Penalty |
|---|---|---|
| Streamlined Foreign Offshore (SFOP) | Lived outside US 330+ days in one of past 3 years | 0% |
| Streamlined Domestic Offshore (SDOP) | US residents | 5% of highest aggregate balance |
Worked Example (SDOP)
US citizen inherited ₩300M (~$215K) in Korean accounts in 2019, never filed. Highest 6-year balance: $240K. SDOP penalty: 5% × $240K = $12,000, plus ~$3,500 attorney fees = ~$15,000 total. Without Streamlined, audit-discovery exposure could exceed $100,000 in Form 3520 + FBAR penalties.
What You File
- 3 most recent years of amended/late tax returns
- 6 most recent years of FBARs
- Form 3520 for the inheritance year (if applicable)
- Form 14653 (SFOP) or Form 14654 (SDOP) — sworn non-willful certification
Critical Mistakes to Avoid
- Quiet disclosure (filing without the cover letter) — treated as willful
- Filing during an open IRS audit — disqualifies you
- A weak non-willful narrative — engage a US tax attorney for privilege
How We Help
We handle the Korean side — converting Korean assets to USD, gathering bank statements, documenting Korean inheritance tax paid. Our partner US tax attorneys prepare the Streamlined package and the sworn certification.
General information only, not legal advice. Streamlined Filing involves sworn certifications with potential criminal exposure if misrepresented. Engage qualified US tax counsel.