The US Supreme Court just agreed to resolve the split in the circuit courts whether the FBAR $10,000 civil nonwillful penalty is to be applied on a “per account” rather than “per form” basis. By granting certiorari to Mr. Bittner, a taxpayer who petitioned the Court to review his case, we will finally have a definitive answer to this important question. Various court documents and briefs are available at the official US Supreme Court website, here .
In United States v. Bittner, (No. 20-4059, 5th Cir. 11/30/21), the Fifth Circuit overruled the lower court and held that the FBAR non-willful US$10,000 penalty applies on a per account rather than a per form basis. The taxpayer was hit with a hefty penalty involving 177 FBAR “violations” (thus, US$1.77 million) since he had a financial interest in more than 25 accounts per year for each of three years. Currently, there is a conflicting statutory interpretation by the 5th and 9th circuit courts of the Bank Secrecy Act (BSA) (31 U.S.C. § 5321(a)(5)(B)(i)), as to what constitutes a “violation” of the BSA. Is the violation the failure to file the FBAR form or is it the failure to list each account on the form? Section 5321(a)(5)(A) authorizes a penalty of up to US$10,000 “on any person who violates” Section 5314. Full details at my earlier blog posts here and here.
Watch this space for developments in what will ultimately be a landmark decision.
Want more information about FBAR, check my blog post category, replete with all the details and latest cases.
Remember – FBAR problems can often be easily resolved, frequently without imposition of any penalties. Get the correct tax and FBAR advice – email me for a consultation.
Posted June 23, 2022
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