Bittner v. United States
The Supreme Court ruled that the government cannot multiply a $10,000 penalty by the number of foreign bank accounts missing from a single annual report — the fine cap applies once per deficient or late-filed report, not once per omitted account.
The decision dramatically lowers potential penalties for Americans and immigrants who unintentionally fail to fully disclose foreign accounts, resolving a split between federal appeals courts that had left people facing wildly different fines for the same conduct depending on where they lived.
How it got here: The federal district court sided with Bittner; the Fifth Circuit reversed and upheld the government's per-account penalty; the Supreme Court took the case to resolve a split with the Ninth Circuit, which had ruled for a similarly situated filer.
The Case in Depth
What happened
Alexandru Bittner, a dual U.S.-Romanian citizen, spent years living and working in Romania after the fall of communism and built a successful business career there. He did not know that U.S. law required him to file annual reports disclosing his foreign bank accounts. When he returned to the United States in 2011 and learned of the requirement, he filed five years of late reports covering 272 accounts in total. The government sought $2.72 million in penalties — $10,000 per account — even though it acknowledged his mistakes were not intentional.
The question before the Court
Could the government multiply a $10,000 penalty for each foreign bank account missing from a single annual report, or is one $10,000 fine the maximum per late or incomplete report?
The Court's answer
No — the government may not multiply the $10,000 nonwillful penalty by the number of accounts missing from a single annual report. The Bank Secrecy Act ties penalties to the number of "violations," and the relevant legal duty is violated once per deficient or late-filed report — not once per account omitted from that report. For Bittner, who filed five late annual reports covering 272 foreign accounts, the ruling caps his maximum exposure at $50,000 (five reports × $10,000), not the $2.72 million the government assessed.
The Court reinforced this reading by pointing out that Congress explicitly used per-account language when setting penalties for willful violations, but chose different language — without any mention of accounts — when it later added penalties for nonwillful ones. That deliberate textual difference signals that Congress did not intend per-account penalties for innocent mistakes.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Americans and immigrants who hold foreign bank accounts and miss or misfill their annual disclosure forms face a maximum $10,000 penalty per report — not per account. For someone with dozens of accounts, that difference can be the gap between a $50,000 fine and millions of dollars in liability. Tax professionals advising clients on foreign-account compliance can now give clearer guidance on worst-case exposure.
What changes now
The Fifth Circuit's judgment upholding the $2.72 million penalty is reversed, and the case goes back to the lower courts for further proceedings consistent with the Supreme Court's per-report reading. Bittner's actual penalty will now be calculated on the basis of five reports, not 272 accounts. Going forward, the IRS and Treasury must assess nonwillful FBAR penalties per annual report filed. Cases pending in other circuits that were awaiting this decision will now be resolved under the per-report standard.
What this does not decide
The Court explicitly left open what mental state the government must prove to impose a "nonwillful" penalty. It also did not resolve whether a person who files both a late report and a subsequent inaccurate corrected report could face two separate violations rather than one. Recordkeeping violations — as distinct from reporting violations — were not addressed.
Concurrences and dissents
Concurrence in part — Justice Roberts
Chief Justice Roberts, joined by Justices Alito and Kavanaugh, joined all parts of Justice Gorsuch's opinion except Part II-C, which applied the rule of lenity. By omitting that part, these three justices signaled that the statutory text, contextual clues, and drafting history were sufficient to resolve the case in Bittner's favor without needing to invoke the tie-breaking principle that penal laws should be read narrowly against the government.
Dissent — Justice Barrett
Justice Barrett, joined by Justices Thomas, Sotomayor, and Kagan, argued that the most natural reading of the statute treats each unreported foreign account as a separate violation. She reasoned that § 5314's duty to file 'reports' is triggered by each individual relationship with a foreign bank, so each failure to report an account is a discrete breach. She also rejected the majority's use of the expressio unius canon, arguing Congress included account-specific language in the willful and reasonable-cause provisions only because those provisions depend on account balances — not to signal that nonwillful penalties cannot accrue per account.
How the Court got there
The legal reasoning, step by step
- The core statutory question was what triggers a 'violation' under the Bank Secrecy Act. The Court began with 31 U.S.C. § 5314, which sets out the reporting duty: it requires certain people to file reports about their foreign financial relationships. Critically, § 5314 never mentions accounts or their number — the duty is simply the duty to file a compliant report. Compliance is therefore binary: either you file the required report or you don't.
- The penalty provision, § 5321, authorizes a fine of up to $10,000 for 'any violation' of § 5314. Because a violation is the failure to file a compliant report, multiple deficient reports may yield multiple $10,000 penalties — but the fine cannot multiply per account within a single report. The number of accounts left off a report does not change the count of violations.
- The Court applied the expressio unius canon — a traditional reading rule that says when Congress uses specific language in one part of a law but omits it from a neighboring part, the omission is intentional and meaningful. Congress used account-specific language twice: when setting penalties for willful violations (capped at the greater of $100,000 or 50% of the account balance) and when limiting the reasonable-cause exception (which requires accurate per-account reporting). But it did not use that language when setting the nonwillful penalty. That gap is evidence Congress did not intend per-account penalties for nonwillful violations.
- Beyond the text, the Court noted that the government's own public guidance — fact sheets, IRS letters, form instructions — had repeatedly told the public that a failure to file a report could result in a penalty 'not to exceed $10,000,' without mentioning per-account multiplication. Under the Skidmore framework (which says courts may weigh an agency's consistency when evaluating its legal arguments), this inconsistency between the government's past statements and its courtroom position was another reason to doubt its current reading.
- The drafting history of the nonwillful penalty provision also cut against the government. Congress added the per-account penalty structure for willful violations in 1986. When it added nonwillful penalties in 2004, it easily could have used the same per-account language but chose not to. That legislative choice reinforces the textual signals.
- Justice Gorsuch, joined only by Justice Jackson, applied the rule of lenity in Part II-C — the principle that penalty statutes must be construed strictly against the government and in favor of individuals. He reasoned that the government's own guidance had failed to give fair notice of the per-account theory, and that the same 'violation' term appears in the adjacent criminal penalty provision, so accepting the per-account reading would also dramatically expand potential prison sentences for willful violators — an outcome requiring strict construction.