The case in brief
- Citation: Bittner v. United States, 598 U.S. 85 (2023), decided February 28, 2023.
- Question: When a person does not willfully fail to file an FBAR, is the maximum penalty $10,000 per report or $10,000 per foreign account listed on it?
- Holding: Per report. The Bank Secrecy Act's non-willful penalty attaches to the failure to file a compliant annual report, not to each account.
- Vote: 5–4. Justice Gorsuch wrote for the majority; Justice Barrett dissented, joined by Justices Thomas, Sotomayor and Kagan.
The facts
- Alexandru Bittner, a dual U.S.–Romanian citizen, did not timely file FBARs for 2007 through 2011.
- The government counted each account on each late report — 272 in total — and sought $2.72 million in non-willful penalties.
- Under the Court's per-report reading, the maximum was $50,000: five late reports at $10,000 each.
Why it matters
- For non-willful cases, exposure is now driven by the number of years, not the number of accounts — a large difference for people with many small foreign accounts.
- The decision does not change willful penalties, which can reach the greater of $100,000 or 50% of the account balance (both amounts adjusted for inflation) per violation.
- Reasonable cause remains a full defense to the non-willful penalty, and the Streamlined procedures remain available to eligible non-willful taxpayers.
Sources
- Bittner v. United States, 598 U.S. 85 (2023)
- 31 U.S.C. § 5314; 31 U.S.C. § 5321(a)(5)
- 31 C.F.R. § 1010.350
General information only. This note is not legal or tax advice and does not create an attorney-client relationship. Penalty amounts are adjusted annually for inflation; check current figures before relying on them.