green card holder case study

My original question / case
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* 5+ year green card holder, EU citizen
* Looking to potentially get US citizenship
* No FBARs filed (ever) (at the time of asking the question at least, which was June 2015)
* Aggregate foreign balances of $30-$100k in the last 6 years, not reported anywhere
* Total capital gain + income from accounts less than $1000 per year (and in most cases, as little as $200 per year), but never reported on US tax returns
* Everything fully taxed in home country, and no taxes owed in the US even if it had been properly reported here
* Had contacted 3 lawyers about how to come into compliance, and gotten three different responses
– Lawyer 1: Go with Streamlined Domestic
– Lawyer 2: Follow the Delinquent FBAR procedures since there are no taxes owed
– Lawyer 3: Amend 3 tax-returns, and back-file 6 FBARs.

Some of the advice I received :

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a) * Lawyer 2 has best answer…
* Streamlined just opens a can of worms, don’t do it
* Amending tax returns is a red flag
b) * Simply file FBARs going forward
* Do nothing else
* Use the “I didn’t know” option when filing FBARs
* Don’t attach any written statements (someone has to read them -> red flag)

Some responses from the Expat Forum :

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a) * File past 6 years FBARs as a first step
* Select “I didn’t know” as the reason for the late ones
* Potentially amend tax returns as a second step
b) * File past 6 years FBARs as a first step
* Do nothing more
c) * File FBARs for the last 6 years
* Use “I didn’t know” as the reason
* Review tax returns / amend, as need be

What I decided
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I filed 6 years worth of FBARs (this was the one thing nearly all commenters agreed on!), and I will continue filing going forward, both as the FBAR goes, and also including any foreign investment income on my US tax return. A word of note here — which wasn’t really a factor for me as my wish would have been to be in compliance anyway — would be to everyone that lots of European banks will start reporting this information back to the US this year. So coming into compliance before that happens, arguably would be the better the option, in my opinon.

Regarding tax returns / amending: at this moment I haven’t yet amended any tax returns for any of the past 3 years, as I’m still undecided on whether it’s worth it (primarily talking about my time / their time, the effort needed, and the cost of filing, potentially paying an accountant as well, and also the fact that I am wondering if such action could come with the risk of opening up issues and just having the potential to be another huge time sink for me. Someone said “let sleeping dogs lie”, and while my own preference would always be to do these things as “correctly” as possible; given the threatening language and scare tactics that the IRS employs, I’m quite frankly concerned that any benevolent actions on my part could backfire. Who knows.