If you have an undisclosed foreign account or have failed to file a Report of Foreign Bank Account and Financial Accounts Report (FBAR), you face significant civil penalties and even potential criminal prosecution. The Internal Revenue Service is dedicating more resources to investigating offshore accounts and numerous foreign banks are currently under investigation and may turn over customer information.

If you have an account offshore, the Report of Foreign Bank Account and Financial Accounts Report (FBAR) must be filed each year with the Internal Revenue Service to declare the account. If you have failed to file your FBAR and have not disclosed your foreign accounts, you could face penalties. You may be fined and even prosecuted for felony tax evasion and potentially sent to jail.

If you have a foreign account held offshore with more than $10,000 in it, you are required to report the account to the Internal Revenue Service. If you fail to file a Report of Foreign Bank and Financial Accounts (FBAR) form and you do not disclose the account to the IRS, you could potentially face criminal prosecution and civil penalties. 

The IRS Offshore Voluntary Disclosure Program (OVDP) allows taxpayers the opportunity to come forward and disclose offshore accounts that they may not have previously reported to the Internal Revenue Service as required.  Those who come forward may avoid criminal prosecution and avoid the harsh penalties that they could otherwise face if the government discovers the account before a disclosure is made.