For companies or individuals who haven't yet come clean about offshore assets and accounts hidden from U.S. tax, the Internal Revenue Service is offering a second chance.

The IRS recently rolled out a second voluntary disclosure program for any taxpayer—corporate, individual or any other entity—with unreported income from offshore assets and accounts to catch up on the tax and potentially avoid criminal prosecution. The IRS first smoked out some 15,000 taxpayers with a similar initiative in 2009.

According to the terms of the voluntary disclosure program, taxpayers who choose to step up will be required to pay any unpaid taxes, interest and penalties for the last eight years. They'll also pay a special 25-percent penalty beyond any other penalties that might apply. It's a little more onerous than the terms of the 2009 voluntary disclosure program, but that's to avoid rewarding anyone who chose to wait, says Michael Zargari, a partner with law firm Herrick, Feinstein. “If hypothetically the IRS subsequently decides to have a third program, the terms of that third program would likely not be as beneficial as the terms of this one,” he says.

The penalties include an accuracy-related penalty equal to 20 percent of the amount of underpayment of taxes for the past eight years, a failure-to-file penalty of up to 25 percent, and a failure-to-pay penalty of up to 25 percent. The miscellaneous penalty, tossed on top for good measure, is equal to 25 percent of the amount in foreign bank accounts or entities with the highest aggregate account or asset value within the last eight years.

Herrick notes in an alert to clients that it's perfectly feasible for the penalties to wipe out the entire foreign holding. But disclosure through the voluntary program spares taxpayers the likelihood of criminal charges and even stiffer penalties. For corporate taxpayers, it offers the added kick of sparing them any worry about having to disclose any unreported foreign holdings as an uncertain tax position, either to the IRS directly or in financial statements.

As the IRS continues to collect more information and pursue more people internationally, the risk around hiding assets offshore is increasing, according to IRS Commissioner Doug Shulman. “Tax secrecy continues to erode,” he said in a statement. “We are not letting up on international tax issues, and more is in the works. For those hiding cash or assets offshore, the time to come in is now. The risk of being caught will only increase.”

The disclosure program is open through Aug. 31.