In light of the potential impact of Hurricane Irene, the IRS has extended to September 9, 2011 the deadline to participate in the 2011 Offshore Voluntary Disclosure Initiative.
The initiative primarily concerns the TD F 90-22.1, commonly referred to as the "FBAR." The FBAR is used to report a financial interest in, or signature authority over, a foreign bank, securities or other financial account where the aggregate value of the accounts exceeds $10,000 at any time during the calendar year. Voluntary disclosure pursuant to the initiative generally allows a person to resolve all possible civil and criminal penalties by paying a one-time penalty of up to 25% of the highest account balance since 2003. Although participation in the initiative generally requires that all applicable documents be submitted by the extended deadline of September 9, 2011, an extension of up to 90 days may be allowed for persons who have begun the process by September 9, 2011.
In addition to describing the process for making a voluntary disclosure, the initiative also provides guidance concerning qualification to make a penalty-free filing (often referred to as a "quiet disclosure"). The extended deadline applies only to a voluntary disclosure, and the IRS did not extend the deadline for quiet disclosures. August 31, 2011 remains the deadline for making a quiet disclosure of unfiled FBARs and other information returns required for other foreign investments, such as certain interests in foreign corporations and foreign trusts, covered by the initiative.