Going through an IRS audit is not a pleasant experience. For most people, it is up there with a root canal or colonoscopy. At a minimum, the dentist and protologist are probably nicer to you than the average IRS auditor.
In recent years, the IRS has turned its focus to US accounts in foreign banks. In fact, they have repeatedly claimed that offshore bank accounts are a top priority for the IRS and are aggressively 
targeting US citizens with bank accounts in Switzerland, Cayman Islands, and other foreign banks.
What has changed?
The Foreign Account Tax Compliance Act was created. It requires overseas banks to provide the IRS with information on American accounts worth at least $50,000. The law doesn’t simply involve accounts that have $50,000 in them at tax reporting time, but each account that has contained $50,000 at any time during the tax year.
Of course, you’re required to report foreign bank accounts that have totaled $10,000 or more at any one time during the previous year via FinCEN Form 114. If you have even more financial assets offshore you may need to attach IRS Form 8938 as well. This is necessary to avoid a forceful, and costly, smack to the hand by the IRS.
Taking the right action now can save you the painful experience of an IRS audit in addition to potentially substantial penalties and fines. It’s definitely in your best interest to avoid waving this particular red flag in front of the bull the IRS has become in recent years.
The penalties of undisclosed (i.e. hidden) offshore accounts are no small potatoes; those that willfully fail to disclose overseas assets include a hefty fine of $100,000 or 50 percent of the balance, whichever is greater.
If you are a United States citizen with an offshore bank account which has not been disclosed and would like assistance, then call our Managing Partner, Andrew Brody at 305-231-2150. Our CPA Firm is highly respected in these matters and has been serving the Miami area for over 65 years.