The Internal Revenue Service launched the Offshore Voluntary Disclosure Program that
enables you to come clean and report all of your offshore accounts since 2003 if you have not filed the correct FBAR form so far. The Offshore voluntary disclosure initiative required that you supply copies of your earlier tax returns, and amend those returns as necessary to file the inclusive TD F 90-22. The next step requires that you ignore the tax assessing time period for the IRS while they examine your situation, meaning that you will not be protected by the statute of limitations for these years. You have to then pay any other penalties that you owe, up to and including 25% of the total balance of all offshore accounts. As soon as you have paid all the penalties, taxes and fines you may then file a form to end the case on IRS form 906. If you are presently involved in a civil or criminal case at this time you are not eligible for this program.
The FBAR form need to be filed every year as soon as you have started offshore accounts. Incorrect reporting may result in cruel FBAR penalties that might put you in jail. Not filing past forms is the way that most people get into trouble with this type of process. They could also attempt to file more than one form at the same time by mailing them separately, which is just as bad as not filing them at all. It is important that you file according to the law so that you can evade FBAR penalties.
Regardless of your tax liability, you are still required to file the right FBAR Form within the filing deadline so as to avoid penalties. Unless you like serving prison time you should not try to get out of filing FBAR form. Because the guidelines and rules concerning the filing requirements are complicated it is suggested that you obtain professional guidance so as to avoid harsh penalties. Because of the scrutiny on foreign accounts, it is improbable that you will be able to stay undetected if you have never filed a FBAR in the past. With the OVDI, it is best that you report all that you have at this time in an attempt to steer clear of future tax issues.