The Internal Revenue Service announced a new disclosure initiative to encourage people to bring money held offshore back into the U.S. tax system.
Individuals can bring their money back into the U.S. system, provided they pay a penalty, back-taxes and interest for as many as eight years, the IRS said. Some of the penalties will be as great as 25% of the amount in the foreign bank accounts in the year with the highest aggregate account balance between 2003 and 2010.
Others will qualify for lower penalties.
"This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all," said IRS Commissioner Doug Shulman. "And it gives people a chance to come in before we find them."
The new initiative follows a similar voluntary disclosure initiative that closed in Oct. 2009. The 2009 program closed with 15,000 voluntary disclosures covering banks in more than 60 countries.
"For those hiding cash or assets offshore, the time to come in is now," Shulman said. "The risk of being caught will only increase."
IRS Launches New Disclosure Program For Offshore Funds