If you're a US citizen, green card holder, or otherwise a US tax person who hasn't filed US returns or FBARs on Indian income and accounts, the IRS has a formal path back into compliance — but which version you qualify for changes your outcome dramatically. One track costs 5% of your foreign assets. The other costs nothing beyond back tax and interest. The difference comes down to one question: where did you actually live?
Streamlined Domestic Offshore Procedures (SDOP) is for US tax residents — people who spent most of their time in the US during the relevant years. It requires 3 years of amended returns, 6 years of FBARs, back tax and interest, plus a 5% miscellaneous offshore penalty on the highest year-end balance of unreported foreign financial assets.
Streamlined Foreign Offshore Procedures (SFOP) is for US persons who meet the IRS's non-residency test — no US home, and physically outside the US for at least 330 full days in at least one of the most recent three tax years with a filing deadline that's passed. Same filing requirements. Zero penalty.
This single distinction is why so many NRIs and green card holders end up overpaying: they assume "I'm a US taxpayer, so I owe the 5%," without realizing where they were actually living during the non-compliance years determines which track — and which cost — applies.
Who typically lands where:
- H-1B holders, L-1 holders, and green card holders actively working and living in the US → generally SDOP
- Green card holders who moved back to India years ago and simply never realized their US filing obligation continued → often SFOP, at zero penalty
Non-negotiable in both tracks: the non-compliance has to be non-willful — an honest mistake, a misunderstanding, or bad advice, not deliberate concealment. Both require a signed certification (Form 14653 for SFOP, Form 14654 for SDOP) explaining why the failure wasn't intentional. Get this wrong, and the IRS can reject the filing or refer it for further scrutiny.
Bottom line: before assuming you owe 5% of your Indian assets to get compliant, get your residency history checked. It's the single biggest lever in this entire process, and most NRIs never get told it exists.