As the recent leak of the "Panama Papers" reminded the world, some secrets don't keep well, particularly those related to undisclosed foreign assets. And once a person's identity is disclosed as a holder of undisclosed foreign assets, a criminal investigation can become a virtual certainty. This week's headlines, which include the Internal Revenue Service ("IRS") announcement of its commencement of criminal inquiries relative to some of the 200 United States persons referenced in the Panama Papers, confirm this change.

In the current environment, it no longer is a question of whether the offshore bank accounts will be found; it has become only a question of when. For taxpayers hoping to beat the media (and the authorities) to the punch, the IRS offers a number of programs that provide both a means, and an incentive to become compliant.

The IRS Offshore Voluntary Disclosure Program (OVDP) is designed for taxpayers holding undisclosed foreign accounts or assets and facing potential criminal liability. Through the OVDP, eligible taxpayers have the opportunity to proactively disclose these accounts or assets to the IRS while avoiding certain civil penalties and, in most cases, criminal prosecution. However, it is important that taxpayers act quickly to take advantage of this program; the IRS may terminate the OVDP at any time, and its financial – and criminal liability protection – benefits may become unavailable after investigation of an individual or financial institution has commenced.

For those taxpayers who do not face potential criminal penalties but still need to make things right, the IRS offers compliance opportunities with reduced penalties or simplified filing procedures. The Streamlined Filing Compliance program provides relief from certain civil penalties and is available to taxpayers who have failed to report foreign assets due to non-willful conduct. Taxpayers who have not filed a required Report of Foreign Bank and Financial Accounts (FBAR) or other international information return may take advantage of delinquent submission procedures that allow an opportunity to explain the reason for the delayed filing.

Although each of these programs includes its own specific requirements and procedures, all of the programs permit a taxpayer to retain legal counsel throughout the disclosure process. In addition, many state taxing authorities offer similar programs for those who have unfulfilled state filing obligations. It's not too late for concerned taxpayers to seek advice, take action, and begin breathing a bit easier.