Part II-C Of Bittner: The Dark Lining Behind The Silver Cloud

This morning, the Supreme Court issued what lawyers correctly regard as a taxpayer-friendly opinion in the case of Bittner v. United States.

In that case, by a vote of 5-4, the Court held the maximum penalty that the Government can impose upon a person who nonwillfully fails to file FinCEN Form 114, "Report of Foreign Bank and Financial Accounts", more commonly referred to as the "FBAR," to be $10,000 for each unfiled FBAR. Since the law requires filing of an FBAR on an annual basis, the Court's ruling generally means that the Government can impose a maximum nonwillful penalty of no more than $10,000 per year. The Court rejected the Government's argument that the maximum penalty should be $10,000 for each bank account that the person should have included on the unfiled FBAR. Thus, in the Government's view, a person who, during the year in question, held 17 foreign accounts but did not file an FBAR should be subject to a maximum nonwillful penalty of $170,000. The