Let's say you have an overseas bank account, and you are trying to hide money from the federal government. You are now between a rock and a hard place. For years, you could depend on foreign banks keeping your account a secret from all interested governments. For decades our government tried to pierce the veil of these secret accounts, and for years the government failed in its quest, until now that is. The IRS has successfully taken the Union Bank of Switzerland better known as UBS to court in an effort to force the big bank to disclose the names of American citizens maintaining overseas bank accounts, to the American government.

Tens of thousands of Americans illegally maintain overseas bank account(s). What makes such an account illegal is its non-disclosure to the federal government. On your tax form there is a sentence with a box that clearly states, do you maintain an overseas bank account. If you do, and you don't check the box, you are in violation. There are hundreds of thousands of Americans with such accounts that do disclose their existence to the IRS and properly report any income arising from such accounts.

In a surprise turn of events, UBS has agreed to give up the names of several hundred of these illegal account holders, which the bank believes are guilty of criminal behavior, to the IRS. You are making a big bet if you are a holder of an overseas bank account. The number of Americans having such accounts are in the range of 50,000 plus. The bank is giving up 250 accounts to start begin with. Is your name in that 250, or are you in the remaining 50,000? That's the bet you are making, whether you realize it or not.

A disclosure program has been created by the IRS that will allow you to reveal your identity to the IRS until September 23rd. If you come forward voluntarily, it is unlikely that the government will criminally pursue the matter which could mean jail time. Clemency is under consideration and certain fines will be avoided. If you wait until after the deadline, or if the government should find you first, this could develop into a nightmare scenario. The IRS does can utilize liens, arrests, confiscations and a whole set of practices developed over the Service's extensive history.

Remember, you are not violating the law by merely having an overseas bank account. The holding of the overseas account is not a violation. It is your non-disclosure of the account to the government that makes it a violation. Hundreds of thousands of Americans have legal overseas accounts because they properly check the box on their tax forms noting the existence of such accounts, and they pay taxes on any and all income generated by such accounts.

If you are guilty of having a non-disclosed account than the government has to assume that you have other motives for maintaining such an account. The funds in the account may have been obtained in an illegal manner to begin with. If the government finds the account and comes after you, there could be a full investigation as to the reporting of your entire income stream.

Probably the best thing you can do today is to reach out and find a very sophisticated CPA or tax lawyer. If you feel your case has complexity, and there might be criminal prosecution, you might consider consulting with a criminal tax attorney. Do not wait on this and do nothing. Find a legal representative and get in front of this problem. Let him act as the go-between with the government. Yes, it is costly but the alternative of interacting yourself, or nothing is pure foolishness