The Internal Revenue Service launched the OVDI that enables you to come clean and
report all of your overseas accounts since 2003 if you have not filed the correct FBAR forms yet. The first step in the process is submitting a completed TD F 90-22 and including copies of your earlier tax returns for those years. It also requires that as soon as this is done you must sign documents that permit IRS to widen the tax assessing time period, pay 20% tax penalty on all underpayments for all years, and pay failure to file and failure to pay penalties. The FBAR Penalties can total as much as 25% of the combined balance of all your overseas accounts. Once you have paid all the penalties, taxes and fines you may then file a form to finish the case on Internal revenue service form 906. If you are currently involved in a civil or criminal case at this time you are not eligible for this program.
The FBAR forms need to be filed every year once you have opened overseas accounts. Inaccurate reporting may end in harsh FBAR Penalties that could put you in jail. Not filing past forms is the way that most people get into trouble with this type of process. They may also try to file more than one form at the same time by sending them individually, which is just as bad as not filing them at all. It is critical that you file with respect to the law in order to avoid FBAR Penalties.
Even if you do not owe taxes from a previous year you should still file the right FBAR Penalties as the penalties will still apply. You must never try to avoid filing these forms unless you are willing to risk serious penalties that involve prison. Because the instructions and rules concerning the filing requirements are complex it is recommended that you acquire professional guidance so as to avoid severe penalties. If you have never filed before it is doubtful that you can stay below the radar forever, and once you are caught, the penalties are relentless. Therefore, it is best to hire help and get the FBAR Forms filed and out of your way.