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If you have an interest in a foreign account or a foreign entity, you should disclose it prior to September 1, 2011, or you very likely will be subject to criminal prosecution.
Pursuant to the IRS's 2011 Offshore Voluntary Disclosure Initiative ("OVDI"), if you "come clean" and disclose your interest in the account or entity, pay the tax on any previously unreported income (plus any underpayment, failure to file or failure to pay penalties), and pay an additional penalty of 25% (in some cases less) of the highest value of the account or entity during the period covered by the disclosure, you will generally eliminate the risk of criminal prosecution for not having previously disclosed the account or entity, and for criminal tax fraud for failure to report income from the account or entity (if any).
Please note that these disclosure requirements also apply to non-income producing accounts or entities, as well as to accounts or entities belonging to others, but with respect to which you have signature authority (for example, pursuant to a power of attorney).
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