The best way to avoid tax penalties is to submit all of your required forms & pay your tax bill on time. In some cases, you can avoid penalties if you weren’t aware you needed to file Form 8858, either through the Delinquent International Information Return Submission Procedures or the Streamlined Filing Compliance Procedures. In order to qualify for either of these procedures and avoid penalties, the IRS must not have already reached out to you. The IRS also cannot have an open criminal or civil investigation against you.