Supreme Court rules non-willful FBAR penalty is per-form


The U.S. Supreme Court recently issued its opinion in Bittner v. United States (No. 21-1195), ruling in a 5-4 decision that non-willful foreign bank and financial accounts (FBAR) penalties should be imposed on a per-form basis as opposed to a per-account basis.


The Supreme Court’s opinion reverses the Fifth Circuit’s opinion in the case, which held that a separate violation occurred for each foreign account not timely reported on an FBAR report. The Supreme Court limited the taxpayer’s penalties in the case to a total of $50,000, or $10,000 per report, for each of the five years in question — a significant decrease from the Fifth Circuit’s ruling, which imposed over $2.72 million in penalties.


The Fifth Circuit’s decision initially created a split among circuit courts, as it conflicted with a Ninth Circuit decision holding that the penalty applied on a per-form basis. The outcome in Bittner resolves this circuit split and provides much-needed certainty for taxpayers on the issue.




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