It may be time to come clean – if it’s not already too late.

That’s the advice Newark attorney Lawrence Horn is giving to people who have money in Israeli (and other overseas) bank accounts, but have neglected to report it on their tax forms.

Since 2008, the U.S. government has been cracking down on holders of foreign bank accounts. That year, a Senate panel reported that tax evasion facilitated by off-shore bank accounts costs the government $100 billion a year, and an FBI investigation led to the indictment of a leading Swiss banker; a three-quarters of a billion dollar fine imposed on the Swiss giant UBS; and the bank’s releasing thousands of customers’ names to the IRS.

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Attorney Lawrence Horn cautions holders of foreign bank accounts to settle up with the IRS.

Recently, Israel’s leading banks have been dragged into the investigative spotlight.

In December, Bank Leumi advised U.S. customers that they should report their accounts voluntarily to the IRS.

Under the IRS’ Offshore Voluntary Disclosure Program, started in 2009, taxpayers can reveal their accounts voluntarily, file eight years worth of amended returns, and pay civil penalties – but avoid the risk of criminal sanctions and much higher penalties that the IRS imposes on tax evaders.

Another indication that Bank Leumi is under investigation by U.S. authorities – and may be disclosing account holders to American tax authorities – came last week, when the bank said it set aside $90 million to cover costs for the investigation. In February, an Israeli-born Los Angeles businessman struck a plea deal concerning $4 million hidden in overseas banks – reported to be Bank Leumi and Mizrahi Tefahot Bank.

“Once the bank gives your name to the IRS, you’re disqualified” from entering the disclosure program, Horn said. “If you’re under an audit, under examination, or the bank has disclosed your name, you can’t enter the program.”

Horn started his legal career as an assistant U.S. attorney, and for three years he served as coordinator of criminal tax cases in the U.S. attorney’s office in New Jersey.

Now he chairs the business crimes and tax litigation departments at the Newark law firm of Sills Cummis & Gross.

He warns that prison terms are a possibility for people who get caught up in the IRS’ dragnet – particularly if they’ve been hiding accounts worth a million dollars or more.

At that level, unreported taxes on interest earned by the accounts can equal tens or hundreds of thousands of dollars – and that rises to the level of criminal tax evasion and possibly three years in prison.

“If you plead guilty you can get it down to two years,” Horn said.

It’s not just the failure to check the box on the 1040 form acknowledging a foreign bank account that causes the problem.

A failure to file an annual form with the Treasury Department, listing all overseas accounts worth more than $10,000 and their balances, also can lead to trouble. So can the failure to pay taxes on income on those undisclosed accounts.

Even with the voluntary disclosure, be prepared to forfeit more than a quarter of the value of the account at its peak. But that’s still a better deal than the 50 percent the IRS will take from your account if it’s the government that starts the conversation.

Horn’s advice: Contact an attorney about coming clean through the disclosure program.

“You really need a lawyer,” he said. “There’s an application through the Justice Department’s criminal investigation department. It’s a little too sophisticated for accountants – we hire accountants to assist clients with the delinquent returns.”

Otherwise, you’re facing “the angst, the hell of being in a criminal investigation for income tax evasion.”