The streamlined procedures are designed to provide tax relief to people who did not know or were misinformed (e.g., not “willful”) about reporting their foreign financial accounts.

There are two distinct programs for offshore accounts: the Streamlined Foreign Offshore Procedures and Streamlined Domestic Offshore Procedures.

Streamlined Foreign Offshore Procedures is for people not living in the United States.

Streamlined Domestic Offshore Procedures is for people living in the United States.

Both programs require filing the previous three years of tax returns (or amended tax returns), six years of FBARs, and payment of any taxes and interest, but no penalties.

If you live in the United States, there is a 5% Title 26 Miscellaneous Offshore Penalty for the Streamlined Domestic Offshore Procedures. There is no miscellaneous offshore penalty if you file through the Streamlined Foreign Offshore Procedures (great deal!). This amount is the aggregate balance of all accounts in the highest year out of the six reported on the FBAR (some accounts will not be included in the penalty calculation, such as Candian RRSPs as one example).

If a person is willful in their non-reporting of foreign financial assets, they could look to the Voluntary Disclosure Practice, which may result in prosecution not being recommended.

The IRS states that a voluntary disclosure occurs when you provide a truthful, timely, and complete disclosure to CI through designated procedures. It also requires you to:

• Cooperate with us in determining your correct tax liability and

• Make good faith arrangements with us to pay - in full - the tax, interest, and any applicable penalties you owe.

A disclosure is timely if we receive it before we have:

1. Commenced a civil examination or criminal investigation

2. Received information from a third party (e.g., informant, other governmental agency, John Doe summons, etc.) alerting us to your non-compliance

3. Acquired information directly related to your specific noncompliance from a criminal enforcement action (e.g., search warrant, grand jury subpoena, etc.)