Chances are, if you immigrated to the U.S. or if you travel frequently abroad, you have a foreign bank account. However, what most don't know is that you must take active steps to notify the IRS of these foreign accounts even if they are not earning any income. Failure to do so can lead to massive penalties. In particular, the penalty for knowingly failing to file the requisite form is up to 50% of the total value of the account.
What must be filed is referred to as an FBAR, and it must be received by the IRS by June 30th. If you have failed to file FBARs in the past then there are ways to come into compliance at a minimal tax cost. Keep in mind that foreign banks are now repeatedly turning over U.S. account holder information to the DOJ and IRS and so the notion of a "secret" foreign account (Swiss or otherwise) is a thing of the past. If the IRS discovers the account before you come clean, it is likely that the penalties and interest will exceed the value in the account, even if absolutely no taxable income was earned by the account.
