The IRS and the Department of Justice have publicized several high-profile prosecutions to remind U.S. taxpayers of the risk of failing to report offshore accounts. If you hold accounts in foreign countries, or have stock in or signatory authority over entities that do, you should know that the IRS recently renewed its program for voluntarily reporting those interests. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) builds upon a similar program that expired in October 2009 to encourage disclosure of unreported offshore interests. Taxpayers who fully comply with the OVDI will avoid criminal prosecution and will be able to mitigate the total cost of all outstanding tax liability (including penalties).

For those interested in taking advantage of this program, the deadline is fast approaching. The OVDI expires on August 31, 2011. For more information on the OVDI, see this previous article.