SCOTUS Grants Cert In FBAR Penalties Case

Earlier this summer, the U.S. Supreme Court agreed to hear a case which is expected to determine the extensiveness of the penalty for a U.S. person who fails to file required federal reports listing the person's foreign bank accounts. Specifically, the Court granted certiorari in Bittner v. United States to review whether a non-willful “violation” under the Bank Secrecy Act means either the failure to file a Report of Foreign Bank and Financial Accounts (“FBAR”) or the failure to report a qualifying account. The Court's decision could have a significant impact on the amount of penalties assessed for failure to file an FBAR.

The penalty for violating the Bank Secrecy Act is capped at $10,000 per non-willful violation. If the Court determines that a violation means the failure to file the required report, then a taxpayer's liability for non-willful failure to file an FBAR would be limited to $10,000 for the year, no matter how many qualifying accounts the taxpayer