Unreported foreign accounts or income could trigger huge penalties and criminal liability in the U.S.
In January 2012, the IRS announced a new Offshore Voluntary Disclosure Program (OVDP) available to taxpayers with undisclosed foreign assets. The 2012 OVDP is similar to the IRS’ 2009 OVDP and 2011 OVDI, but the 2012 OVDP is (for the time being) open-ended. The 2012 OVDP is designed to allow taxpayers to come clean with the certainty that they will not face criminal prosecution for not previously disclosing their overseas accounts. Taxpayers have the added benefit of receiving a fixed penalty structure for settlement of past non-compliance.