If you have an account offshore, the Report of Foreign Bank Account and Financial Accounts Report (FBAR) must be filed each year with the Internal Revenue Service to declare the account. If you have failed to file your FBAR and have not disclosed your foreign accounts, you could face penalties. You may be fined and even prosecuted for felony tax evasion and potentially sent to jail. 

The IRS Offshore Voluntary Disclosure Program (OVDP) allows taxpayers the opportunity to come forward and disclose offshore accounts that they may not have previously reported to the Internal Revenue Service as required.  Those who come forward may avoid criminal prosecution and avoid the harsh penalties that they could otherwise face if the government discovers the account before a disclosure is made. 

A failure to file an annual Report of Foreign Bank and Financial Accounts (Form TD F 90-22.1) has significant consequences for investors with foreign bank accounts, warn Washington DC IRS lawyers. One recent case illustrated just how severe those consequences can be. 

Because of this landmark case, other foreign banks may now enter into plea agreements with the U.S. Government.