The IRS voluntary disclosure practice for FBAR amnesty, use of offshore trusts, foreign corporations, and undisclosed bank accounts was announced on March 23, 2009. What triggered this?
The IRS FAQ about the amnesty tells us the story. The IRS published a FAQ on May 6, 2009 which provides some guidance about the amnesty and how it works. FAQ number 1 is where they tell us why they did it.
Why Now Would the IRS offer FBAR Amnesty in 2009?
On the surface the FAQ number 1 says they did this because they have seen an uptick in people voluntarily coming forward. (Correct. This is my professional experience. The IRS is also giving us statistics that back this up.) The reason for this is pretty obvious: since early 2008 there has been a steady drumbeat of news about offshore bank accounts, tax evasion, and things like that. The German government bribed a Liechtenstein banker to steal bank information. The USA started its pursuit (still going to this day) of UBS, the giant Swiss bank.
The prospect of penalties exceeding a taxpayer’s net worth would usually be enough for people to give up the idea of reporting their offshore bank accounts and paying the tax.
By lowering the penalties to a “painful but not fatal” level the IRS has made straightening out one’s tax mess, well, less disagreeable.
When I had clients who wanted to clean up their offshore messes (and trust me, there are a lot of messes out there!) we would face a dilemma. While we could — with some care, mind you — avoid the prison problem caused by tax evasion, the IRS just might throw ridiculously large penalties at the taxpayer trying to come clean.
Also, by setting up the amnesty the way they did, the IRS prevented taxpayers from shopping around with different IRS offices to get the best deal for a voluntary disclosure. (I’ve heard this happens with immigration lawyers–they go to the “right” consulates to get visas for their clients. But surely this never happens with the IRS, right?) 
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