There is good news for Israeli residents with American citizenship. It’s called the U.S. Government “Voluntary Discovery” Program and allows American citizens who reside in Israel to avoid fines for not filing with the American tax authority. For many Israelis who up until now did not comply with the requirement to report to the U.S. tax authorities and have been requested to sign Form W9 this is an excellent opportunity to begin to fulfill the requirements of American reporting without the danger of incurring heavy fines and criminal claims.
Every American citizen has to report the amounts held in all of his accounts (if they total $10,000 or more any time during the year) if he lives outside of U.S. borders. Someone who neglects to file is subject to very high fines and is even exposed to criminal claims by the U.S authorities.
As a result of the FATCA agreement between the US and Israel, the State of Israel reports all bank account information of American citizens to the U.S. tax authorities. Anyone who signs a W9 Form also signs a declaration to waive secrecy; thus, the details of his account are exposed to American tax officials. According to the agreement, the Israeli government will transfer (starting with September 2016) all details of accounts of American citizens to the U.S. tax authorities in an organized fashion.
The “Voluntary Discovery” program provides a remedy. It allows one to file tax reports retroactively for the past three years and FBAR reports retroactively for the past six years. The requirements are very specific and any slight deviation from the procedures will result in exclusion from the program and exposure to the full penalties imposed by the law.
PLEASE NOTE that the program is intended for citizens that the American authorities have not yet approached!
Hurry to file these reports before it is too late.