In response to the huge success of the 2009 IRS Offshore Voluntary Disclosure Initiative, the IRS is offering people with undisclosed income from offshore accounts an opportunity to participate in a new, voluntary disclosure initiative in order to get current on their tax returns and reporting obligations. The 2011 Offshore Voluntary Disclosure Initiative (“2011 Initiative”) will be available only through August 31, 2011.

The 2011 Initiative has a higher penalty rate than the IRS’s previous voluntary disclosure program, which ended on Oct. 15, 2009, but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and possible criminal prosecution. In addition, the 2011 Initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations.

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