The Internal Revenue Service launched the OVDP that allows you to come clean and
report all of your offshore accounts since 2003 if you have not filed the correct FBAR forms so far. The Offshore voluntary disclosure initiative required that you offer copies of your prior tax returns, and amend those returns as necessary to file the full TD F 90-22. It also requires that as soon as this is completed you must sign documents that permit IRS to expand 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. You have to then pay any other penalties that apply up to and including 25% of the entire balance of all offshore accounts. As soon as you have paid all the penalties, taxes and fines you may then file a form to finish the case on IRS form 906. However, if you are involved in criminal or civil investigation you are not eligible to take part in the OVDI program.
The FBAR forms need to be filed every year as soon as you have opened offshore accounts. Incorrect reporting may result in brutal FBAR penalties that may possibly put you in jail. The most ordinary way to get in trouble with the FBAR forms is to begin filing forms before addressing previous accounts, filing past due FBAR Forms in different envelopes in an effort to evade notice or filing more than eight different forms with letters explaining that you did not know you were required to file the FBAR Forms.
Even if you do not owe taxes from a previous year you must still file the appropriate FBAR Penalty as the penalties will still apply. Unless you like serving prison time you should not try to evade filing FBAR forms. The rules for FBAR forms and FBAR penalties may be confusing and tricky to navigate so it is important to have high-quality representation when you start this procedure so that you can make sure that you have followed the current laws. 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 severe. Therefore, it is best to find help and get the FBAR Forms filed and out of your way.