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Connect on LinkedInYou filed your U.S. tax return. You dotted your I’s, crossed your T’s, maybe even triple-checked your 1040. And yet—somewhere in the IRS’s massive labyrinth of rules—you missed one tiny-but-critical detail: an international information return.
If you’ve got ties to a foreign trust, corporation, or financial asset, the IRS wants more than your income. It wants the paperwork. And if you don’t give it up? You could face penalties that seem wildly disproportionate to the mistake.
Enter the Delinquent International Information Return Submission Procedures (DIIRSP)—a merciful (but strict) off-ramp for otherwise-compliant taxpayers who accidentally skipped a form like 5471, 3520, or 8938. No extra tax due? No shady offshore schemes? Just forgot to file?
Then this IRS program might just save your bacon. Let’s break it down.
📋 Key Updates for 2025
- IRS is increasing scrutiny of late-filed Forms 3520 and 5471, especially where reasonable cause information is vague or incomplete.
- DIIRSP now clearly excludes amended returns that report new income, even if penalties aren’t expected.
- IRS guidance in the IRM (Internal Revenue Manual) highlights tougher enforcement on incomplete delinquent information returns.
What are the Delinquent International Information Return Submission Procedures (DIIRSP)?
The DIIRSP is the IRS’s way of saying, “We’ll let it slide—if you’ve got a good reason.”
This process allows U.S. taxpayers who didn’t report required international forms (but don’t owe additional tax) to catch up without penalties—as long as the omission was due to reasonable cause, not willful neglect or fraud.
It’s commonly used for missed forms like:
- Form 5471: For U.S. persons with ownership in foreign corporations
- Form 3520/3520-A: For foreign trusts, gifts, or inheritances
- Form 8865: For interests in foreign partnerships
- Form 8938: For reporting foreign financial assets under FATCA
Unlike Streamlined Filing Compliance Procedures, DIIRSP isn’t about underreported income. It’s about paperwork—and the IRS wanting it in order, even if your taxes are already paid.
💡 Pro Tip:
You’ll need to clearly state why the form wasn’t filed on time. "I didn’t know" isn’t enough. But "I misunderstood the filing requirements" might qualify—if documented properly.
Who is eligible for DIIRSP?
The DIIRSP is not a free pass—it’s for U.S. taxpayers who are otherwise compliant but slipped up on the paperwork.
You may qualify if:
- You’re not under IRS audit or involved in a criminal investigation for tax fraud.
- You have no unreported income and no unpaid U.S. tax liability.
- Your failure to file was non-willful—meaning it wasn’t intentional, reckless, or part of a pattern of evasion.
- You haven’t already amended a tax return to report related income.
This program is for missed information returns, not missed income. If you’re trying to correct underreporting, you’ll need to look at Streamlined Procedures or the Voluntary Disclosure Program instead.
💡 Pro Tip:
Think of DIIRSP as a penalty-free lane on a very strict highway. If you meet the criteria, stay in it. If not, veering into other programs is safer than hoping for the best.
DIIRSP vs. Streamlined Procedures and Voluntary Disclosure
Not all IRS compliance programs are built for the same mistakes. Here’s how DIIRSP stacks up against other options:
- DIIRSP is for U.S. citizens and residents who timely filed their income tax return but forgot to include international information forms (like 3520 or 5471). There’s no unreported income, no unpaid tax, and no audit on the horizon.
- Streamlined Domestic Offshore Procedures are designed for taxpayers who did fail to report foreign income—but did so non-willfully. It includes filing amended income tax returns and paying any back taxes with interest.
- Voluntary Disclosure Practice (VDP) is for more serious cases—willful non-compliance, potential criminal exposure, or long-standing issues involving undisclosed financial accounts. This one usually comes with penalties, but also protection.
- OVDP, the Offshore Voluntary Disclosure Program, was the go-to for high-risk taxpayers until it closed in 2018. VDP has taken its place for similar circumstances.
💡 Pro Tip:
Think of it this way—DIIRSP is for paperwork slips. Streamlined is for income you forgot to report. VDP is for when things went really off-track and you need a clean way back.
How to file under DIIRSP
Filing through the Delinquent International Information Return Submission Procedures (DIIRSP) isn’t complicated—but it must be done exactly right.
- Use standard mailing procedures. Submit your tax return with the delinquent international forms attached (such as Form 3520, 5471, or 8938). DIIRSP does not allow e-filing—mail is required.
- Include a reasonable cause statement for each late-filed form. This is critical. The IRS wants to know why you didn’t file on time, and “I forgot” won’t cut it. Explain the situation factually and clearly, showing that your failure was non-willful.
- Make sure the return is otherwise complete. If you’re filing an amended income tax return, use Form 1040-X and attach all relevant documents. DIIRSP only applies if there’s no unreported income and your tax year is otherwise correct.
- Double-check everything. Even small errors—like misreporting the tax year, skipping a signature, or leaving out a form—can void your submission or trigger penalties.
💡 Pro Tip:
The IRS doesn’t offer second chances under DIIRSP. If your reasonable cause statement doesn’t hold up, you may be kicked out of the program—and stuck with penalties.
What if you also missed FBAR or had unreported income?
The Delinquent International Information Return Submission Procedures (DIIRSP) only apply when your tax return is otherwise squeaky clean—no missed FBAR, no unreported income.
If that’s not the case, the IRS has other pathways:
- Missed FBAR, but no income issues? Look into the Delinquent FBAR Submission Procedures. Like DIIRSP, they’re designed for non-willful errors—just specific to FinCEN Form 114.
- Missed income, but it wasn’t willful? The Streamlined Filing Compliance Procedures (domestic or foreign) might be a better fit. They allow qualifying taxpayers to catch up on both income and information reporting—with reduced penalties.
- Willfulness, fraud, or years of non-compliance? The Voluntary Disclosure Program (VDP) is your safest bet. It’s for taxpayers with significant risk—including possible criminal exposure—and requires careful legal guidance.
💡 Pro Tip:
If you’re unsure which track applies, don’t guess. A qualified tax attorney or cross-border CPA can help you assess eligibility and avoid choosing the wrong path—which could lead to denied relief, penalties, or worse.
Avoiding common mistakes with DIIRSP
The Delinquent International Information Return Submission Procedures can offer penalty relief—but only if you use them correctly. Here’s where many taxpayers slip up:
- Filing under DIIRSP when you actually owe tax: These procedures are strictly for information returns. If there’s any unreported income, you’ll need to explore the Streamlined Procedures or VDP.
- Skipping or rushing the reasonable cause statement: The IRS expects a complete, specific explanation for each form. Generic excuses or missing details can invalidate your submission.
- Mixing up FBARs and information returns: FBARs (FinCEN Form 114) follow a separate process. DIIRSP won’t help with missed FBARs or income-reporting forms like Form 1040.
- Going it alone: International tax filings are tricky. If you’re not working with a CPA or attorney who understands this landscape, you’re increasing the risk of rejection—or penalties.
💡 Pro Tip:
The IRS doesn’t offer second chances with DIIRSP. If your submission is incomplete or ineligible, you may not get another shot at penalty relief.
Penalty relief under DIIRSP
The biggest upside of using the Delinquent International Information Return Submission Procedures? Potential penalty relief—if you qualify.
When your submission is accepted, the IRS generally waives failure-to-file penalties associated with late Forms 5471, 3520, 8865, 8938, and similar filings. That means:
- No late-filing penalties or interest
- No additional tax assessments
- No enforcement follow-up—assuming all conditions are met
But relief isn’t automatic. You must follow normal filing procedures, attach each reasonable cause statement, and ensure your forms are complete and accurate. Even a small error—or a vague explanation—could put that relief at risk.
💡 Pro Tip:
Think of the reasonable cause statement as your one-page defense brief. Treat it with care—it carries the weight of your entire submission.
Why DIIRSP matters for U.S. expats and foreign asset holders
If you’re a U.S. expat with foreign bank accounts, trusts, or gift receipts, there’s a good chance you’ve missed an international information return or two. It happens more often than you think—and DIIRSP is one of the few ways to fix it quietly.
This IRS program offers a low-risk path back to compliance—if you haven’t underreported income and your mistake was non-willful. That’s key. Used properly, DIIRSP can protect you not just now, but also in future audits, IRS correspondence, or legal precedents where past behavior is reviewed.
The catch? You have to act before the IRS reaches out. Once you’re on their radar, DIIRSP is off the table.
💡 Pro Tip:
Think of DIIRSP as your tax reset button—but only if you press it before the audit alarm goes off.
Don’t let missed forms become a major problem
With international tax forms, silence isn’t golden—it’s expensive. Even if you don’t owe additional tax, missing a required information return can lead to steep penalties and long-term IRS scrutiny.
That’s where the Delinquent International Information Return Submission Procedures come in: a second chance for U.S. taxpayers abroad to catch up—quietly, accurately, and penalty-free, if you qualify.
Whether you’re dealing with foreign gifts, international partnerships, or just a stack of forms you didn’t know you needed, Bright!Tax can help. We’ll review your eligibility, draft a compelling reasonable cause statement, and handle your filing—before the IRS steps in.
Not sure what you’ve missed? Reach out today. One smart move now can save years of stress later.
Frequently Asked Questions (FAQ)
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What is the difference between DIIRSP and other IRS amnesty programs?
DIIRSP is specifically for delinquent information returns when no tax is owed, unlike Streamlined Filing or Voluntary Disclosure, which apply when there’s underreported income or willful noncompliance.
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Do I need to file amended returns to use DIIRSP?
Only if you’re submitting the delinquent forms alongside a previously filed return. If no original return exists, you’ll submit the full return with the attached reasonable cause statement for each missed form.
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What counts as 'reasonable cause information'?
Reasonable cause must show that your failure to file was due to circumstances beyond your control, not intentional avoidance. Think unclear IRM guidance, third-party errors, or a lack of awareness about your foreign account reporting obligations.
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How do I know if I’m eligible for penalty relief under DIIRSP?
You must timely file under the DIIRSP framework, have no underreported income, and not be under IRS audit or investigation. If you meet all conditions, tax law allows the IRS to waive penalties typically tied to delinquent information returns.
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What if I submitted the wrong form in a prior year?
You may still qualify for relief by filing the correct form now with an amended return and a clear explanation. Providing relevant case law citations or IRS references may strengthen your position.
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Do I need a tax attorney to file under DIIRSP?
While not legally required, a tax attorney or cross-border CPA experienced in international tax compliance can help ensure your attached reasonable cause statements are strong, accurate, and IRS-ready.
