The Internal Revenue Service has always aimed to fight tax evasion in order to maximize revenue for the United States government. The US and many other developed countries are experiencing ongoing budgetary problems due to the effects of the 2008 crash and following global recession.

The Department of Justice and the Internal Revenue Service have joined forces to track down tax payers who are not fulfilling their reporting requirements. Taxpayers with money invested offshore must report the accounts each year and complete a form called the Report of Foreign Bank and Financial Accounts (FBAR).

Investors with offshore or foreign accounts have an obligation to file the Report of Foreign Bank and Financial Accounts (FBAR) with their income taxes each year. A failure to file the FBAR can result in penalties based on a percentage of the money kept offshore as well as the number of years of non-reporting, with some violators assessed penalties that exceed the total value of money kept in their offshore accounts.

Taxpayers can take advantage of voluntary disclosure opportunities if they have offshore accounts that they have not properly reported. By participating in disclosure programs including the Offshore Voluntary Disclosure Program (OVDP) for foreign bank accounts, it is possible to limit penalties and avoid criminal prosecution. 

The Offshore Voluntary Disclosure Program (OVDP) limits the penalties faced by taxpayers who failed to file the Report of Foreign Bank and Financial Accounts (FBAR). FBAR must be filed every year by any U.S. citizen who has offshore accounts, even if the citizen is living abroad in the country where the account is held. There is a streamlined OVDP procedure, but unfortunately early indicators suggest that very few people will be found to be eligible.