New IRS Program For Taxpayers With Offshore Accounts

On June 18, 2014, the IRS launched a new initiative to allow taxpayers with offshore accounts to voluntarily disclose those accounts with very little, and in some cases, no penalties.  To take advantage of the program, taxpayers must file tax returns for the three previous years and FBARs for the prior six years, disclosing the offshore accounts and any income that the taxpayer received from those accounts.  For taxpayers currently residing in the U.S., the taxpayer will pay a 5% penalty on the account balances, but will not have to pay late filing, late payment, or negligence penalties.  For taxpayers not currently residing in the U.S., the taxpayer will not have to pay any penalties.