It’s tax deja vu with yet another IRS amnesty program for persons filing late disclosures of offshore financial accounts, commonly referred to as FBAR (Foreign Bank Account Reporting). The IRS announced that the new program generally resembles the 2009 and 2011 programs, except that there is no explicit ending date to the new program and the special amnesty penalty has increased to 27.5% of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure highest account value. Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
Although more details are yet to come, the IRS specifically warned that “the terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.” The IRS is also currently developing procedures by which taxpayers such as dual citizens and others who may be delinquent in filing, but owe no U.S. tax, may come into compliance with U.S. tax law.