On January 9, 2012, the IRS announced IR-2012-5 that it has "reopened" the Offshore Voluntary Disclosure Program ("OVDP"). The IRS opened a new OVDP due to the continued and vast interest by U.S. citizens, other persons, residents and their representatives to have a vehicle in place to disclose the inadvertent or intentional concealment of offshore financial accounts or assets.

The new OVDP is substantially similar to the 2011 Program whose deadline recently passed but for the following key differences:

•The new OVDP is open-ended with no current submission deadline announced;

•The terms of the OVDP including penalties could be changed at any time by the IRS;

•The base line penalty under the OVDP is now 27.5% of the highest aggregate balance of the undisclosed foreign financial accounts and/or assets during the eight (8) full tax years prior to the submission. Under the 2011 Program, the penalty was 25% of the highest aggregate balance of the undisclosed foreign financial accounts and/or assets during tax years 2003 through 2010.

•The new OVDP still provides for a reduced penalty of 12.5% if the value of the foreign financial accounts and/or assets is under $75,000 for every tax year or 5% under certain exceptions including that of a U.S. citizen residing outside the U.S.