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By: Rebecca K. Wohltman

The U.S. Supreme Court recently issued a decision resolving the question of whether penalties for the non-willful failure to file an FBAR apply on a per-account or per-year basis.

There was no dispute that the penalty for filing to file an FBAR was $10,000. The split between circuits was whether that $10,000 penalty was per foreign account that was not properly reported, or per year for which the FBAR was not filed.

In a 5-4 decision, the Supreme Court resolved this question in Bittner v. United States, No. 21-1195. The Supreme Court held that the $10,000 penalty applies on a per form basis (meaning on a per year basis), dealing a significant blow to the U.S. government’s tools to enforce FBAR filing penalties.

In part, the Supreme Court thought applying the $10,000 penalty per account was too harsh for a violation that was not willful.

This decision has no impact on penalties for a taxpayer who willfully fails to file the FBAR. Penalties for willful failure to file are significantly greater, and can carry criminal liability.

If you have any interest in a foreign bank account, foreign investment account, or foreign company, you may be obligated to file an FBAR each year. If you have any such accounts and have not previously filed an FBAR, I can help you navigate how to handle your filing obligations, both retroactive and prospectively.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.