Background and context

Voluntary offshore disclosure became a mainstream compliance path after the U.S. increased enforcement of cross‑border reporting (FBAR, FATCA, Form 8938). The IRS ran formal programs such as the Offshore Voluntary Disclosure Program (OVDP) in the past, but OVDP closed in 2018. Today taxpayers generally rely on the Streamlined Filing Compliance Procedures, delinquent submission procedures, or a negotiated resolution when behavior suggests willfulness. In my 15 years helping clients, early, well-documented disclosure consistently lowers risk and produces clearer outcomes.

How the disclosure process works (step-by-step)

  1. Intake and fact‑finding — Collect account statements, dates of opening/closing, correspondence, and any foreign tax filings. Establish whether nondisclosure was willful or non‑willful.
  2. Choose the correct pathway — Options today include the Streamlined Filing Compliance Procedures, Delinquent FBAR Submission Procedures, or, for cases with potential criminal exposure, negotiating with IRS Criminal Investigation through counsel. (See IRS guidance on Streamlined procedures.)[https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures]
  3. Prepare amended returns and forms — Typical filings include amended U.S. income tax returns, Form 8938 (FATCA), and FinCEN Form 114 (FBAR) for past years. Use accurate calculations of unpaid tax, interest, and potential penalties.
  4. Submit and respond — File the chosen program package and be ready to supply additional documentation if the IRS requests it. Keep records of all submissions and communications.
  5. Pay amounts due — Expect to pay taxes, interest, and possibly penalties depending on the program and facts.

Who is affected or eligible

Most U.S. citizens, residents, and certain green‑card holders with foreign financial accounts or specified foreign assets who did not properly report them are affected. Eligibility for Streamlined procedures requires that the taxpayer certify that prior failures were non‑willful. If contacts with the IRS already suggest willful conduct, different remedies or counsel are necessary.

Real‑world example (anonymized)

A U.S. small‑business owner with passive foreign accounts discovered seven years of missed FBARs after moving funds for operational needs. We used the Streamlined Domestic Offshore Procedures, filed the missing FBARs and amended returns, paid tax and interest, and avoided substantial civil penalties because the facts supported non‑willfulness.

Common mistakes and misconceptions

  • Thinking a late tax return alone resolves FBAR/FATCA issues — FBAR (FinCEN Form 114) and Form 8938 are separate obligations and can carry their own penalties (FinCEN/IRS).
  • Assuming OVDP is still available — OVDP ended in 2018; don’t rely on outdated programs.
  • Waiting for an IRS notice — Delay can increase audit risk and narrow options.

Practical tips and professional strategies

  • Act quickly but thoughtfully: gather documents before filing to avoid errors.
  • Document intent: collect emails/notes that show lack of willfulness where possible.
  • Use the right submission path: Streamlined procedures are appropriate when failures were non‑willful; delinquent FBAR submission procedures suit taxpayers who have filed returns but missed FBARs.
  • Consider professional help: a CPA or tax attorney experienced in international compliance can assess willfulness and negotiate with the IRS. In my practice, clients who worked with experienced advisors reached final resolution faster and with fewer surprises.

Short FAQ

Q: What forms will I likely file? A: Common filings include amended tax returns (Form 1040X), Form 8938 (Statement of Specified Foreign Financial Assets), and FinCEN Form 114 (FBAR). (See FinCEN and IRS info.)[https://www.fincen.gov/report-foreign-bank-and-financial-accounts] [https://www.irs.gov/individuals/international-taxpayers/reporting-foreign-financial-assets]

Q: Is criminal prosecution a realistic risk? A: Criminal referral is possible in willful cases, but most non‑willful disclosures resolved through Streamlined or delinquent procedures avoid criminal charges. If facts suggest willfulness, retain counsel immediately.

Q: Can I still come forward if I already received an IRS letter? A: Yes—options depend on the letter’s content and timing. Discuss the notice with counsel or a tax professional before responding.

Internal links for further reading

Authoritative sources

Professional disclaimer

This article provides general information and educational content—not personalized tax or legal advice. For guidance tailored to your facts, consult a qualified CPA or tax attorney experienced in international tax and criminal exposure.

Notes on accuracy

I reviewed IRS and FinCEN guidance current to 2025 while preparing this entry. Procedures and forms change; verify links and program availability before you act.