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Hello and thank you for using Just AnswerIn response to your 2nd question:For taxpayers who reported and paid tax on all their taxable income for prior years but did not file FBARs, you should file the delinquent FBAR reports according to the instructions (send to Department of Treasury, Post Office Box 32621, Detroit, MINNN-NN-NNNN and attach a statement explaining why the reports are filed late. The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and the FBARs are filed by August 31, 2011.
In response to #3:
The IRS is aware that some taxpayers have attempted so-called “quiet” disclosures by filing amended returns and paying any related tax and interest for previously unreported offshore income without otherwise notifying the IRS. Taxpayers who have already made “quiet” disclosures are eligible to take advantage of the penalty framework applicable to this initiative by submitting an application, along with copies of their previously filed returns (original and amended) to the IRS’s Voluntary Disclosure Coordinator (see FAQ 24) by August 31, 2011.
Taxpayers are strongly encouraged to come forward under the 2011 OVDI to make timely, accurate, and complete disclosures. Those taxpayers making “quiet” disclosures should be aware of the risk of being examined and potentially criminally prosecuted for all applicable years.
For #1, the whole process is to assist taxpayers that have not filed the reporting forms but have filed the income ontheir tax returns. Their intent clearly was not to avoid taxation. Thisis of course the worse thing a taxpayer can do. The penalty structure is in place for those that did not report the income but avoidance of penalties can be had fr those that reported the income and now come forward to file the FBAR(s)