Yes, there are penalties associated with the Streamlined Filing Compliance Procedures, but they are significantly reduced compared to the penalties that could apply outside these procedures. The specific penalties depend on whether the taxpayer is a U.S. resident or a non-resident at the time of filing.
For U.S. taxpayers residing outside the United States - (Streamlined Foreign Offshore Procedures): Taxpayers qualifying under the Streamlined Foreign Offshore Procedures, generally U.S. citizens living abroad, are not subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties. They are required to file delinquent or amended tax returns, with all required information returns, for the last three years and to file delinquent FBARs for the last six years. Full payment of the tax and interest due must accompany the submission.
U.S. Taxpayers Residing in the United States - (Streamlined Domestic Offshore Procedures): Taxpayers qualifying under the Streamlined Domestic Offshore Procedures, generally U.S. residents, are subject to a miscellaneous offshore penalty equal to 5% of the foreign financial assets that gave rise to the tax compliance issue. This penalty is in lieu of all other penalties that could apply, including penalties for failing to file FBARs (FinCEN Form 114) and penalties for failing to file certain information returns (e.g., Form 8938, Statement of Specified Foreign Financial Assets). Taxpayers are required to file amended returns, with all required information returns, for the last three years and to file delinquent FBARs for the last six years. Full payment of the tax, interest, and miscellaneous offshore penalty must accompany the submission.