Bittner v US. : A Landmark Supreme Court Ruling on Non-Willful FBAR Penalties
Case Overview : In the landmark case of Bittner v US, the Supreme Court addressed the calculation of non-willful penalties under the Bank Secrecy Act for failures to report foreign bank accounts on the FBAR. This case highlights the significance of accurately understanding and applying non-fillful penalties in the context of FBAR violations.
Background
Alexandru Bittner, a dual US-Romanian citizen, failed to report numerous foreign accounts on his FBARs over a series of years. The IRS assessed over $2.7 milion in penalties for non-fillful violations, calculating penalties based on the number of unreported accounts per year. Bittner challanged the assessment, arguing that penalties should be assessed per form, not per account.
Key Legal Issues
The case centered around the interpretation of "non-willful" violations under the Bank Secrecy Act and the appropriate calculation of penalties. The core legal question was whether the penalties for non-willful FBAR violations should be applied on a per-account or per-form basis.
Ruling and Implications
The Supreme Court ruled in favor of Bittner, deciding that non-willful penalties should be calculated on a per-form basis, significantly reducing potential penalties for individuals with multiple unreproted accounts.
Lessons Learned
This case underscores the importance of understanding FBAR requirements and the distinction between willful and non-willful violations.
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If you have undisclosed foreign accounts or are concerned about FBAR compliance, our team can provide expert guidance and support.