The IRS is again allowing people with illegal, overseas bank and brokerage accounts to turn themselves in for reduced penalties. In 2009, the IRS did the same thing, giving taxpayers the opportunity to rat on themselves with the Voluntary Disclosure program. They said that 15,000 taxpayeres told on themselves in that round.
Having accounts overseas is perfectly legal. However, if you have one with more than $10,000 in it at any time during the year, you are required to report it to the IRS. Why? Because the IRS wants to tax you on the earnings in foreign accounts, and they want to know if you might be using foreign accounts to launder money or do other dirty financial deeds.
Read moreNew Tax Amnesty Program for Taxpayers With Overseas Accounts