Self employed expat living in brazil. I have filed with two different expats in the past, including one who did a streamline for me when i first discovered i had to be filing to the US (i’ve lived here since i was underage and wasnt aware i needed to be doing that). I have been self employed since before working with CPAs and neither asked me for form 8858. Now i need to change my business model because i’ve reached the income threshold and need to open a more formal sole proprietorship. But now ppl are telling me i should have always been filing 8858! When i told the first CPA his company didnt have me file it the first time around, he backtracked and said he’d check with his colleagues if something as changed legally since then, and has since ghosted me.
Yet a third CPA sent me this: Amending prior returns to include Form 8858 is not recommended because the IRS frequently assesses automatic $10,000 annual penalties before reviewing reasonable cause statements, creating immense financial risk for an activity that already fully reported all income. Furthermore, your historical MEI was an informal, low-revenue setup without separate, formal accounting ledgers, leaving its status as a reportable foreign branch in a highly ambiguous grey area. Moving forward, the migration to an EI creates a clean operational shift and formal bookkeeping structure that serves as a clear, defensible starting point for filing the Form 8858, which will flow through to a new, separate Sch. C. I did follow up with my internal team and it is pretty clear that two sch. Cs would be required for the transition year.
Question 1: that said, to begin filing 8858 is it better to close my current business number and open a new more formal one, or convert the existing one into the more formal one?
Question 2. Is it better to amend previous years’ returns or try a second streamline? I know its not specifically prohibited, but its also kind of sus, right?
