Many seemed to think only Switzerland would capitulate to the U.S. But now many countries\u2013and soon it will not an overstatement to say virtually all<\/em>\u2013will have broad disclosure policies as reported here:\u00a0Offshore Accounts: No Place to Hide?<\/a>\u00a0Already, nearly 20 jurisdictions are on board or soon will be.<\/p>\n They include obvious locales such\u00a0as Switzerland, the Caymans, Jersey and more. Count France, Germany, Italy, Spain, the U.K. Guernsey, Gilbraltar and the British Virgin Islands. Nearly 30 more nations are expected, including eventually such unlikely prospects as China. It has become a kind of global landslide.<\/p>\n The original target of the initiative was clearly not law-abiding U.S. citizens abroad. Yet they have their own worries now too. The State Department estimates there are 7.2 million U.S. citizens abroad. It seems safe to assume that most have non-U.S. bank accounts. The fact that only 825,000 FBARs were filed for 2012 suggests that this group too is under-complying.<\/p>\n Expat or not, for many U.S. persons with foreign income and accounts, it\u2019s clear that compliance is required and well-advised. But a primary fear is precisely how to begin in a way that is least expensive and least risky. Here\u2019s a refresher:<\/p>\n Report Worldwide Income<\/strong>. You must report worldwide income<\/a>\u00a0on your U.S. income tax return. If you have an interest in a foreign bank or financial account\u00a0you must check \u201cyes\u201d (on Schedule B). This is true even if you live outside the U.S. or pay foreign taxes.<\/p>\n FBARs Too<\/strong>. Tax return filing alone isn\u2019t enough. U.S. persons with foreign bank accounts exceeding $10,000 in the aggregate at any time during the year must file an FBAR by each June 30. See\u00a0Primer For First Time FBAR Filers<\/a>.<\/p>\n FATCA Form. <\/strong>With your tax return, you may also need to file an IRS\u00a0Form 8938<\/a>\u00a0to report foreign accounts and assets.<\/p>\n Big Penalties.<\/strong>\u00a0Tax return failures are serious and carry penalties. Plus, the\u00a0penalty<\/a>\u00a0for failing to file an FBAR is $10,000 for each non-willful violation. If willful, the penalty is the greater of $100,000 or 50% of the amount in the account for each violation.\u00a0Each year you didn\u2019t file is a separate violation. See\u00a0Despite FATCA, FBAR Penalties Still Under\u00a0Fire<\/a>.<\/p>\n Criminal Penalties<\/strong>.\u00a0Tax evasion can carry a prison term of up to five years and a fine of up to $250,000. Filing a false return can mean up to three years in prison and a fine of up to $250,000. Failing to file a tax return can mean a one year prison term and a fine of up to $100,000. Failing to file FBARs can be criminal too with monetary penalties up to $500,000 and prison for up to ten years. See\u00a0IRS May Find \u201cInnocent\u201d FBAR Violation Willful<\/a>.<\/p>\n Voluntary Disclosure.<\/strong>\u00a0If you admit your failures to the IRS and say you want to make it right, you\u2019ve made a \u201cvoluntary disclosure.\u201d You will pay back taxes and penalties but not be prosecuted. See\u00a0Revised IRS Voluntary Disclosure Practice<\/a>. There are two IRS programs, and each is worth a look.<\/p>\n![\"5929577747_88efe9573f\"](\"\/\/ustaxconsultants.es\/blog\/wp-content\/uploads\/2014\/10\/5929577747_88efe9573f.jpg\")
<\/a>But even before FATCA is fully implemented, the U.S. is gathering stockpiles of information from whistleblowers, banks under investigation and cooperative witnesses that make the timeline oblique. Most U.S. taxpayers have known since 2009\u2019s UBS scandal that the world was becoming smaller.<\/p>\n