Part 2: Bittner v. United States (Feb 28, 2023) (Bank Secrecy Act, Report of Foreign Bank and Financial Accounts (FBAR))

Audio of Part 2 of Bittner v. United States (Feb 28, 2023) Majority Opinion

U.S. persons with foreign bank accounts are required to file an annual Report of Foreign Bank and Financial Accounts, commonly known as an FBAR.

Alexandru Bittner, a dual citizen of the U.S. and Romania, failed to report his interests in his foreign bank accounts on annual FBAR forms, as required by the Bank Secrecy Act of 1970 (BSA). So, the United States government fined him 10,000 for each unreported account each year from 2007 to 2011 - for a grand total of $2.72 million. You might say Mr. Bittner was FUBAR over his FBARS at this point.

Of course, Bittner challenged the fines. The district court held that a $10,000 maximum penalty attaches to each failure to file an annual FBAR, not to each account to be reported on the FBAR, so it reduced Bittner's fines to $50,000 total.  The U.S. Court of Appeals for the Fifth Circuit reversed, holding that each account he failed to report indeed counted as separate reporting violation.

In this case, the Court was asked…

Is a “violation” under the Bank Secrecy Act the failure to file an annual Report of Foreign Bank and Financial Accounts (no matter the number of foreign accounts), or is there a separate violation for each individual account that was not properly reported?

 

Music by Epidemic Sound