If you have funds in an offshore bank account, keeping your investments private may have been one of the goals of opening the offshore account. Unfortunately, in recent years, it has become increasingly difficult to keep your personal account information from falling into the hands of the IRS or otherwise being outed.

Canada, the United States, and many additional countries throughout the world have begun to aggressively pursue investigations and claims against investors who are accused of keeping funds offshore to evade their tax obligations. 

The Offshore Voluntary Disclosure Program (OVDP) was created to allow taxpayers to voluntarily come forward and admit they had not filed their required Reports of Foreign Bank and Financial Accounts. The purpose of OVDP was to reduce penalties for those who were not willful violators, because penalties in some cases have actually exceeded the value of undeclared offshore accounts.

FBAR stands for Report of Foreign Bank and Financial Accounts. The FBAR is a report that has to be made annually if you have more than $10,000 in any combination of offshore bank accounts that you either own or have signature authority on. If the combined balances of any offshore financial accounts exceed $10,000 at any time during the year, FBARs must be filed.

Both FBAR and FATCA impose compliance requirements for certain offshore accountholders. However, FBAR and FATCA are not the same. The forms that are required under FBAR and FATCA are different forms, are filed to different entities, and the requirements of who must file will vary between the two forms.