The IRS streamlined filing compliance procedures allow eligible taxpayers to avoid potentially disastrous penalties and resolve their offshore bank account problems. Taxpayers who have failed to file Foreign Bank Account Reports (FBARs) and report their income from foreign financial accounts on their tax returns can face penalties of up to $10,000 per violation for non-willful violations, and penalties of up to $250,000 and five years in prison for violations that are deemed willful; not to mention civil penalties of over $100,000 per violation, at a minimum.
The streamlined procedures can help taxpayers correct their past mistakes and avoid these penalties. There are different procedures, and different penalties for taxpayers that reside in the U.S. and taxpayers that live outside the U.S., but both types of taxpayers are eligible for this program.
Most importantly, these procedures are only available to taxpayers whose failure to file FBARs was non-willful. This means the conduct must have been due to negligence, inadvertence, mistake, or a good faith misunderstanding of the law. Taxpayers who have willfully failed to file FBARs may be eligible for the Offshore Voluntary Disclosure Program, which has some of the same benefits, but also involves much higher penalties.