IRS Streamlined Foreign Offshore Procedure (SFOP) 330-Day Rule

To use the IRS Streamlined Foreign Offshore Procedure (SFOP), a US citizen in London must show that in at least one of the three most recent years with a passed filing deadline, they had no US abode and spent at least 330 full days outside the United States. If either part fails, the cheaper foreign route is not available.

For most Americans who have lived in the UK for years, the non-residency test is a formality. It is not a formality for a senior executive who was posted to London by a US parent, or who took a local role while keeping a house in Connecticut, a board seat in New York and a travel schedule built around quarterly meetings in the US. For this person, the test usually decides whether the catch-up costs nothing beyond tax and interest, or whether a 5% penalty applies to the full value of their UK accounts, pension and share plan holdings. This guide sets out how Jungle Tax works through the test for relocated executives: how to count days, how to defend the abode position and what evidence to hold. It also covers what to do when the numbers do not work.

What is the SFOP non-residency test?

The Streamlined Filing Compliance Procedures have two versions. The foreign version is for taxpayers who live outside the United States. The domestic version is for everyone else. Both versions require you to certify that your failures to report foreign income, file information returns or file FBARs were non-willful. The only thing that separates the two is the non-residency requirement, and the financial difference is large. A taxpayer who qualifies for the foreign procedure pays the tax and interest due on three years of amended or delinquent returns, with no offshore penalty. A taxpayer who has to use the domestic procedure pays a miscellaneous offshore penalty of 5% of the highest year-end aggregate balance of their in-scope foreign financial assets.

The IRS publishes two separate tests, and the right one depends on your immigration status, not where you are living today. Both are set out on the IRS page for US taxpayers residing outside the United States:

• US citizens and lawful permanent residents (Green Card holders) meet the requirement if, in any one or more of the most recent three years for which the US return due date (or properly extended due date) has passed, they did not have a US abode and were physically outside the United States for at least 330 full days.
• Individuals who are neither citizens nor Green Card holders meet the requirement if, in any one or more of those same three years, they did not meet the substantial presence test of section 7701(b)(3).

The citizen test has two limbs, and both must be met in the same year. Spending 330 days abroad is not enough if the IRS can show that your abode stayed in the United States. A clean abode position is not enough if US travel took you past the day limit. Days outside the US also cannot be added together across years. You need one complete year that passes both limbs.

Step 1: Identify the three years in your look-back window

The three years are not fixed. They are the three most recent tax years for which the US filing deadline has already passed, including any extension you properly obtained. US citizens living abroad get an automatic two-month extension to 15 June, and a further extension to 15 October is available if requested. At the date of this guide (late October 2026), most London-based filers will find their window covers 2023, 2024 and 2025. Once the 2026 return deadline passes in 2027, 2023 drops out and 2026 comes in.

This moving window causes one of the most common eligibility problems for relocated executives. The SFOP looks backwards, so the earliest year of a London posting often falls outside the window or is a split year that cannot pass. Write down the three years before you count anything.

Step 2: Deal with the transfer year problem

A US executive who moves to London in, say, May almost never passes the 330-day limb in the year of the move. They were in the United States for January to April, which is far more than the roughly 35 days of US presence the test allows. That year is gone for SFOP purposes. The question is whether the window contains at least one later year that passes.

Relocation date	Look-back window at a late-2026 submission	Likely qualifying year	Practical position
Moved to London in 2022 or earlier	2023, 2024, 2025	Any full London year with limited US travel	Usually straightforward if US days and abode are controlled
Moved in mid-2023	2023, 2024, 2025	2024 or 2025	2023 fails, but one later year only needs to pass
Moved in mid-2025	2023, 2024, 2025	None yet	SFOP not available today; 2026 may qualify once its due date passes
Moved in early January 2025	2023, 2024, 2025	Possibly 2025	Turns on exact US days and the abode position for 2025

Where no year in the window qualifies yet, the choice is between filing under the domestic procedure now and waiting until a London year enters the window. Waiting is not risk-free. The streamlined procedures are closed to anyone already under IRS civil examination or criminal investigation, and a letter that arrives while you wait can remove the option completely. That decision needs to be made with the full facts and not by default.

Step 3: Count full days outside the United States, not nights in London

The 330-day limb borrows its counting method from the physical presence test used for the foreign earned income exclusion, which is explained in IRS Publication 54. A full day is a period of 24 consecutive hours starting at midnight. In practice this means:

• Any day you spend in the United States counts against you, even part of a day. If you land at JFK at 3pm on a Monday and fly back on the Thursday evening, you have used four days, not three nights.
• Travel days are usually lost. A day spent partly in US airspace or on a transatlantic flight is not reliably a full day outside the United States. The conservative position, and the one to prepare for in an examination, is that departure and arrival days do not count as qualifying days.
• Transit counts. Connecting through a US airport on the way to Toronto, Mexico City or the Caribbean is US presence on that day.
• The limit is about 35 days. A 365-day year with 330 qualifying days leaves 35 days that can be US days or lost travel days. In a leap year the margin is 36. Those 35 days are your entire allowance for US meetings, family holidays, travel days and transit.

A worked example: the quarterly board cycle

Take a London-based managing director who flies to New York for four quarterly board meetings, each lasting four nights, plus a two-week family Thanksgiving trip to the US.

• Each board trip covers five calendar days with US presence, from the arrival day to the departure day. Four trips use 20 days.
• The Thanksgiving trip lands on a Saturday and leaves on the Sunday fifteen days later, using 16 days.
• The outbound transatlantic flight days on the five trips may not count as full days outside the US, which costs up to 5 more days.

The total is around 41 days. This executive does not pass the test for that year, even though they would describe themselves as living in London. Cutting one board trip to video, or one day off the holiday, would not be enough. Executives are often caught out because the schedule seemed modest when it was planned. The test should be run against the actual travel record before anyone signs a certification.

Why your FEIE period and your UK day count cannot be reused

Many executives assume an earlier calculation already proves the point. It usually does not.

• The foreign earned income exclusion physical presence test also uses 330 full days, but in any consecutive twelve-month period. The SFOP test is applied to a tax year. A Form 2555 covering July to June does not show that a calendar year passes.
• The UK Statutory Residence Test generally counts a day as a UK day if you are in the UK at midnight. That rule answers a different question, which is whether you are UK resident, and it counts presence in a different way. Being UK resident for every year of the posting says nothing about how many days you spent in the United States.

Feature	US: SFOP non-residency test	UK: Statutory Residence Test
Question answered	Can a US person use the foreign streamlined procedure?	Is the individual UK tax resident for the tax year?
Period	Calendar tax year (1 January to 31 December)	UK tax year (6 April to 5 April)
Day counting	Full 24-hour days physically outside the United States	Generally, presence in the UK at the end of the day (midnight)
Home concept	No US "abode" in the qualifying year	Home, accommodation and ties tests and sufficient-ties factors
Typical threshold	At least 330 full days outside the US	183 or more UK days is automatically resident; fewer days depend on ties
Relevance to the other system	None. UK residence does not prove US non-residency	None. US citizenship does not affect the UK test

HMRC's own guidance on the Statutory Residence Test (RDR3) explains the UK counting rules. The point here is that you need two separate records, one for each system, built from the same underlying travel data.

Step 4: Establish that you had no US abode

The abode limb is where executives who kept a US home most often run into trouble, and it is the part generalist guidance covers least well. The IRS does not define "abode" on the streamlined page, but it states that neither temporary presence in the United States nor keeping a US dwelling necessarily means your abode is in the US, and it refers to Publication 54. In the foreign earned income context, abode means the place where your economic, family and personal ties are centred. It is not a question of who holds legal title to a property.

What strengthens the "no US abode" position

• A spouse and children who live with you in London, with the children enrolled in UK schools.
• A London residence held for the long term on a tenancy or freehold, with council tax and utilities in your name.
• UK employment, either a local contract or an assignment with a UK payroll, and day-to-day management responsibilities located in London.
• A US property that is let to unrelated tenants at a market rent, or sold, or at least not kept furnished and ready for you to use.
• UK bank accounts, doctors, club memberships, a UK driving licence and voter registration that show where your life is actually based.

What weakens it

• A spouse or children who stayed in the US home while you commuted to London.
• An assignment letter stating a fixed short term and a guaranteed return to a named US office.
• A US home kept empty, furnished and available, with your vehicles, personal belongings and primary mailing address still there.
• Keeping US state residence, for example by continuing to file state resident returns or claiming a homestead exemption on the US property.

No single factor decides the question. An executive who kept a Westchester house but let it on a two-year lease, moved the family to Kensington and changed their state filing position is in a very different position from one whose family stayed in the house while they worked Monday to Thursday in London. The facts in your Form 14653 narrative should match the facts in your records.

The state residence trap

State tax residence can be harder to break than federal non-residency. Some states treat a person as domiciled there until they clearly establish a new domicile elsewhere, and keeping a home in the state often supports continued residence. If you have been filing state resident returns during the London years, or should have been, that state position needs to be consistent with the "no US abode" claim on your federal streamlined submission. This is a compliance consistency point, not a planning point. Contradictory filings are the kind of discrepancy an examiner will notice.

Step 5: Apply the right test if you are a Green Card holder

Green Card holders are often told they face a different streamlined test. That is not quite accurate. The IRS applies the same abode-plus-330-day test to lawful permanent residents as to citizens. The substantial presence test applies only to individuals who are neither citizens nor lawful permanent residents in the relevant year. In practice, three situations come up for London executives:

• A current Green Card holder working in London applies the citizen test. The Green Card itself does not count as a US abode, but frequent US travel to maintain immigration status can use up the day allowance.
• A former Green Card holder who has formally given up status applies the substantial presence test for years after status ended, which is usually easier to pass from London. The year status ended, and any exit-related filing obligations, need separate attention, particularly for long-term residents.
• An executive who worked in the US on a temporary visa before transferring was never a lawful permanent resident and applies the substantial presence test for the window years if they were US tax resident only through that test.

A Green Card holder who claimed treaty non-residence on a US return raises separate questions that should be reviewed before any streamlined submission, because that position can have consequences beyond the three-year window.

Step 6: Check whether both spouses qualify on a joint return

On a joint return, the IRS requires both spouses to meet the applicable non-residency requirement. Couples who relocate together generally pass or fail together. The difficult cases are where:

• One spouse moved to London and the other stayed in the US for the children's school year or a career. The spouse who stayed fails the abode limb.
• One spouse made long, repeated US trips to care for a parent and went over the day limit even though the household's base was London.
• One spouse is not a US person and, through an election, has been treated as resident for joint filing. The test for that spouse depends on their own status.

If only one spouse qualifies, the qualifying spouse can generally file under the foreign procedure as married filing separately, and the other spouse's position is dealt with separately. Changing filing status affects tax liability, the amended-versus-original return analysis and how jointly held accounts are reported, so it must be modelled carefully rather than chosen because it looks convenient. We cover the mechanics in our library of cross-border compliance guides, including streamlined filing with a non-US spouse.

Step 7: Build the evidence file before you certify

Form 14653, the foreign procedure certification, is signed under penalties of perjury. Streamlined submissions are not routinely examined, but they can be, and an examiner who doubts the non-residency claim will ask for proof. Evidence for the qualifying year should be assembled before signing, not after an examination letter arrives.

Evidence	What it proves	Notes for executives
Airline booking histories and e-tickets	Exact US arrival and departure dates	Export from frequent-flyer accounts and corporate travel systems; keep the PDFs
US border-crossing records	Official entry and exit dates	US citizens can request their travel history through freedom-of-information procedures; allow several months
Passport pages	Supporting entry and exit stamps	Often incomplete, because UK e-gates and many US entries leave no stamp
Corporate expense and calendar records	Where you worked on each day	Hotel folios and card statements by location fill gaps
UK tenancy or purchase completion documents, council tax bills	Location of your actual home	Cover the whole qualifying year
UK payroll records (payslips, P60, P45)	UK employment and UK tax residence	Assignment letters and secondment terms also show the expected length of the move
US property lease and rent records	That a retained US home was not available to you	An arm's-length lease to unrelated tenants is the strongest evidence
Children's school enrolment, UK medical registration	Where family ties were centred	Strong support for the abode limb

Build a day-by-day calendar for the qualifying year that reconciles all of these sources. Keep it with the submission file for at least as long as the assessment period on the returns remains open.

What goes into the SFOP submission once you qualify?

When the non-residency test is passed and the non-willful certification can be truthfully signed, the foreign procedure package generally includes:

• Delinquent or amended US returns (Form 1040, or Form 1040-X where originals were filed) for the three years in the window, with all required information returns. For London executives these often include Form 8938, and Form 5471 or Form 8621 where relevant.
• FBARs for the six most recent years for which the FBAR due date has passed, filed electronically and annotated as streamlined filings.
• A signed Form 14653 with a specific, factual narrative explaining the failures.
• Payment of all tax and statutory interest due.

Amended returns typically pick up the items London executives most often leave out: UK pension contributions and growth not covered by treaty relief, ISA income and gains (which are fully taxable in the US), UK share scheme vesting and sale, UK bank interest and investment income, and foreign tax credit calculations that did not take account of differences between the US and UK tax years. Because UK income tax rates are generally higher, foreign tax credits often reduce the US liability to little or nothing. Even so, the information-return failures are what the streamlined procedure is designed to cure. To see what non-compliance could cost outside the procedure, try our FBAR penalty calculator.

What if you fail the non-residency test?

Failing the non-residency test does not end the matter. It means a different route applies:

• Streamlined Domestic Offshore Procedures (SDOP). This is available where you did file original US returns for each of the three window years, the failures were non-willful, and the issue is unreported foreign income or missed information returns. It carries the 5% miscellaneous offshore penalty on the highest year-end aggregate balance of foreign financial assets in the covered years. The IRS sets out the domestic version on its page for US taxpayers residing in the United States.
• No original returns filed for the window years. The domestic procedure requires previously filed returns, so a non-filer who fails the non-residency test cannot use it. The options then include delinquent filings with reasonable-cause statements or, where conduct may not have been non-willful, a voluntary disclosure. Each option carries very different risk.
• Waiting for a qualifying year. As explained above, this is sometimes rational where a clean London year is about to enter the window. It must be weighed against the risk of IRS contact, which closes the streamlined procedures.

The 5% penalty is calculated on balances, not on the unpaid tax, so for an executive with a substantial UK pension, share plan holdings and investment accounts, the difference between SFOP and SDOP can easily be six figures. It is worth spending the time to establish non-residency properly before accepting the domestic route.

The UK side: does HMRC care about your US streamlined filing?

The IRS non-residency test has no UK equivalent, and HMRC plays no part in a streamlined submission. The two processes still interact. Amended US returns often show income that was correctly taxed in the UK, but sometimes they reveal items that were also missed on UK returns, such as US brokerage dividends, US rental income from the retained home, or gains on US-listed shares sold during the posting. Where that happens, the UK position needs its own correction, either through amendments or through HMRC's disclosure facilities. The US and UK figures need to agree. If your affairs need correcting in both countries, our US-UK tax accountants prepare the two sets of filings together so that the narratives, exchange rates and tax-year allocations match. Our UK tax services team handles the HMRC side.

A summary checklist for the relocated executive

• Identify the three years whose US due dates (including extensions) have passed.
• Exclude the transfer year unless you can show it passes.
• Build a day-by-day US presence calendar for each candidate year from airline, expense and border records.
• Count every day with any US presence, including transit and arrival and departure days, against the roughly 35-day allowance.
• Test the abode limb on family, home, employment and US property facts for the same year.
• Confirm which test applies to each spouse and whether a joint filing still works.
• Assemble the evidence file before signing Form 14653.
• If the test fails, assess the domestic procedure, delinquent filing routes or timing before deciding.

Executives with substantial UK and US holdings, multiple share plans and complex travel patterns are exactly the clients our high-net-worth practice is built for. The non-residency analysis is a factual exercise, but it carries very high stakes, and it should be completed before anything is signed.

If you are a US executive in London with years of unfiled or incomplete US returns, missed FBARs or unreported UK accounts, and you need to know whether you qualify for the foreign streamlined route, contact our cross-border team for a confidential consultation. We will reconstruct your day count, test the abode position against your records, and prepare a complete US and UK compliance package, so you can certify with confidence and close the matter properly.