Imagine owing up to $600,000 in penalties on, say, a $20,000 bank account simply because you didn’t report it to the IRS.
But such a gobsmacking penalty is possible if your account has been held overseas at a non-U.S. financial institution for years and you knowingly never disclosed it to the U.S. government.
You could be subject to lesser penalties if you voluntarily disclose the account or can prove you weren’t being “willful” by not disclosing it.
But make no mistake: You will likely pay penalties, and — if your foreign account generated income — back taxes and interest as well.