The IRS has announced the promised Second Special Voluntary Disclosure Initiative for taxpayers who have unreported and untaxed assets offshore. The new initiative runs from now until August 31, 2011 and differs in some material ways from the first Offshore Voluntary Disclosure Initiative which expired October 15, 2009.

Taxpayers who did not take advantage of the first offer will find the second offer a bit more expensive. The FBAR penalty which is imposed under the Bank Secrecy Act, has been increased from 20% to 25% for taxpayers with aggregate account balances of $75,000 or more. For taxpayers with foreign financial accounts with aggregate balances of less than $75,000 there is a break in the FBAR penalty to 12.5%. There is also a special 5% penalty with very limited application. In addition to the FBAR penalty taxpayers must filed all unfiled returns or amended returns for the years 2003-2010, pay all taxes, interest penalties and an accuracy related penalty as imposed under the Internal Revenue Code and file all unfiled FBAR’s.

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