There is some confusion regarding a list of banks that the IRS has determined to be actively involved in helping US taxpayers to avoid income tax. The ongoing list represents institutions who will incur a 50% penalty for associated accounts, instead of the 27.5% specified by the Offshore Voluntary Disclosure Program or OVDP.
These institutions were found by the IRS to be “either a foreign financial institution at which the taxpayer has or had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement has been publicly identified as being under investigation or as cooperating with a government investigation.”
If you filed your OVDP application prior to the bank being added to the “List of Foreign Financial Institutions or Facilitators” you may be eligible for the lower 27.5% penalty, and that is the reason for all US taxpayers with offshore accounts, investments and assets to come into immediate IRS FBAR compliance.
Once your bank, financial institution or investment house is added to the list, the mandatory penalty is 50%.
