If you aware that you have unreported foreign financial accounts that expose you to liability for Foreign Bank Account Report (FBAR) or Foreign Account Tax Compliance Act (FATCA) violations, you should carefully consider the risks of waiting to disclose your offshore accounts, including the following:
- The IRS does not have to continue to offer offshore disclosure programs, and can change the terms of these programs whenever they wish. The Offshore Voluntary Disclosure Program (OVDP) or Streamlined Filing Procedures can be ended at any time. If the terms of the programs are changed, they could be less favorable to taxpayers, resulting in higher fines or stricter eligibility requirements.
- You are not eligible for offshore disclosure programs if you are currently under IRS examination. This is true even if the examination is for issues completely unrelated to your undisclosed offshore accounts. Once the IRS begins to ask questions and request information from you, you may be put into a very difficult situation if you have foreign accounts that you haven’t disclosed, and you won’t be able to receive any type of amnesty from these programs.