Form 14654 Non-Willfulness Statement: Fictional Example

Last reviewed: July 21, 2026. Educational information only. A Form 14654 certification is signed under penalties of perjury, and possible willfulness should be reviewed with an attorney before submission.

The non-willfulness statement on IRS Form 14654 is not a request for the right phrase. It is the taxpayer's complete explanation of why income, tax, international information returns, or FBARs were not reported correctly.

The IRS domestic streamlined FAQ says to include the whole story, including favorable and unfavorable facts. It specifically asks for personal and financial background, the source of funds in foreign accounts or assets, and the taxpayer's contacts with them—including deposits, withdrawals, and management decisions.

What does non-willful mean?

For the streamlined procedures, the IRS defines non-willful conduct as conduct due to negligence, inadvertence, mistake, or a good-faith misunderstanding of the law. That definition is the eligibility standard; merely repeating its words does not prove that a taxpayer meets it.

A useful narrative connects dated facts to each failure:

• What should have been reported?
• When and why did the failure begin?
• What did the taxpayer understand at that time?
• What documents, return questions, professional advice, or warnings did the taxpayer encounter?
• How were the foreign accounts or assets opened, funded, used, and managed?
• When was the problem discovered, and what happened next?

Read those requirements in the current IRS domestic streamlined FAQ, especially FAQ 13.

Build the statement from records, not adjectives

Start with a chronology before drafting prose. Gather the filed returns, organizer answers, account-opening records, statements, emails with advisers, prior FBARs, information returns, and evidence of when the taxpayer learned about the requirement.

Then test the chronology for gaps:

Question	Evidence to review
Where did the money come from?	Inheritance records, payroll, sale documents, transfers
Who controlled the account?	Signature authority, login history, correspondence, powers of attorney
What was reported previously?	Forms 1040, Schedule B, Forms 8938, 3520, 5471, 8621, and FBARs
What advice was received?	Engagement letters, questionnaires, emails, notes, invoices
When was the issue discovered?	Notices, adviser communications, account reviews, filing history
What happened after discovery?	Corrective filings, information gathering, professional consultation

The statement should distinguish what the taxpayer personally knew from what a preparer knew. “My accountant handled it” is incomplete unless the narrative explains what the taxpayer disclosed, what the adviser was engaged to do, and what advice was actually provided.

Fictional Form 14654 narrative outline

This fictional outline illustrates organization only. It is not language to paste into a certification.

Background: Jordan, a U.S. resident, inherited an account in Country A in 2020. Identify Jordan's tax experience, the account type, the source of funds, and who managed it.

How the failure began: Describe the specific understanding Jordan had about U.S. income and account reporting, where that understanding came from, and which return or FBAR items were missed.

Account activity: Describe deposits, withdrawals, investment decisions, communications with the institution, and whether Jordan reviewed statements or tax documents.

Return preparation: Identify what Jordan provided to each preparer, what questions were asked, and whether foreign income or accounts appeared on organizers or prior filings.

Discovery and correction: State when Jordan learned of the requirements, what caused the discovery, what records were collected, and what corrective steps followed.

Unfavorable facts: Include any fact that complicates the explanation rather than writing around it. The professional reviewing the matter must determine what those facts mean.

The actual certification should use the taxpayer's dates, amounts, communications, and conduct. A generic story can omit the very facts the IRS uses to evaluate credibility.

Warning signs that require legal review

Do not assume the streamlined procedures are appropriate when the facts may involve intentional concealment, false answers, altered records, entities used to hide ownership, repeated warnings, instructions not to disclose an account, or movement of funds after learning of a reporting obligation.

The IRS streamlined procedures direct taxpayers concerned about willful conduct toward the IRS Criminal Investigation Voluntary Disclosure Practice and professional or legal advisers. A Form 14654 filing does not produce a closing agreement and is not automatically immune from examination.

Before signing Form 14654

Confirm that the narrative agrees with:

1. All three covered amended returns and attached information returns.
2. All required delinquent or amended FBARs.
3. The six-year account and asset schedule.
4. The 5% miscellaneous offshore penalty computation.
5. Bank records and prior communications.
6. The taxpayer's explanation of discovery and corrective action.

For the full filing framework and penalty calculation, use the Form 14654 instructions and 5% penalty guide. Compare the domestic procedure with the foreign procedure in Form 14654 vs. Form 14653.

Why this matters for an enrolled agent

This is a Part 3 judgment problem: establish the facts, use current primary authority, exercise due diligence, and recognize when legal risk exceeds the engagement. An enrolled agent's value is not producing smoother adjectives. It is protecting the accuracy of a taxpayer's presentation to the IRS.

Practice Part 3 representation questions →

Primary sources

• Official Form 14654 PDF
• Streamlined Domestic Offshore Procedures
• Domestic streamlined FAQs
• General streamlined procedures

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Related: Form 14654 Instructions · Late FBAR Filing · Form 14653 Guide