What do the missed years actually cost?
The honest answer for most expats: far less than feared — if the clean-up uses the relief routes rather than quietly filing forward.
Figures on this page are stated for tax year 2025/26 UK · 2025 US. Thresholds change annually.
The stack, and what removes it
On paper the stack is frightening: 5% a month failure-to-file, up to $16,536 per missed FBAR, $10,000 per missed Form 5471 or 8938. In practice, Streamlined Foreign Offshore wipes all of it for non-willful people living abroad, leaving only tax actually owed plus interest — and with foreign tax credits, UK residents often owe nothing at all. The Domestic route charges 5% instead.
The estimate worth running is the comparison: exposure if the IRS finds you first, versus the cost of a Streamlined package. The gap is usually the strongest argument for going first.
- Failure-to-file and failure-to-pay penalties compound monthly
- Form 5471 and 8938 carry $10,000 penalties; Form 3520 is proportional and Form 8621 has none
- Streamlined removes penalties entirely for non-willful cases filed from abroad
Exposure versus the Streamlined route
A quick orientation, not advice — real positions have edges this cannot see.
Enter the years behind to see the comparison.
Questions we get about this
Sometimes. Reasonable-cause relief and first-time abatement exist, and appeals are possible.
It is considerably harder than avoiding them by coming forward under a disclosure programme first.
Treat it as a starting point. If it says an obligation applies, the next question is what the filing actually involves and whether earlier years are affected.
If it says nothing applies, it is worth re-running whenever your circumstances change - a move, a property, a new account.
No. Where the failure was non-wilful, programmes such as Streamlined waive the penalties entirely, and reasonable-cause relief exists separately.
The estimate shows exposure if nothing is done, not what you are likely to end up paying if you come forward properly.
Interest runs on unpaid tax, and it runs from the original due date rather than from when the return was eventually filed.
An extension to file is not an extension to pay, which is where the surprise usually comes from.
It covers the common cases and will tell you reliably whether the basics apply to you. It is a guide, not a filing position.
Edge cases - trusts, business ownership, unusual residence patterns - can change the answer, which is why the result flags when a position is worth checking properly.
Last reviewed · Figures stated for tax year 2025/26 UK · 2025 US. Thresholds and rates change annually — check figures against the current tax year before relying on them.
Got your answer and it looks complicated?
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