Bittner v. United States

Background

Alexandru Bittner, a dual Romanian–U.S. citizen, returned to the United States in 2011 and learned he had to file annual FBAR reports about foreign bank accounts. He filed late FBARs for 2007–2011 and later corrected them to list 61, 51, 53, 53, and 54 accounts respectively (272 accounts total). The government accepted the accuracy and did not claim willfulness, but assessed nonwillful penalties at $10,000 per unreported account, totaling $2.72 million. The Fifth Circuit upheld that approach; the Supreme Court took the case.

Reasoning

The Court focused on the Bank Secrecy Act's text, especially 31 U.S.C. §§5314 and 5321. It said the statute treats the duty as filing compliant reports and ties the $10,000 nonwillful maximum to “violations” of the reporting duty, not to account counts. The Court noted Congress used account-specific language elsewhere for certain willful penalties and for the “reasonable cause” exception, but did not tie nonwillful penalties to accounts. The Court also pointed to Treasury and IRS guidance that suggested a single $10,000 penalty per defective report, the Act's drafting history, the Secretary's regulations about listing accounts, and the rule of lenity to resolve ambiguity in favor of defendants.

Real world impact

The ruling means nonwillful FBAR penalties are capped at $10,000 for each defective annual report rather than multiplied by the number of accounts listed on that report. People with many overseas accounts — including immigrants and Americans living abroad — face much lower civil exposure when violations are nonwillful. The decision leaves open other questions, such as mens rea standards and willful-violation rules, and the ruling may be revisited in different factual settings.

Dissents or concurrances

A dissent argued the statute most naturally treats each unreported account as a separate violation and would allow per-account penalties; it emphasized Bittner's large account balances and urged a different reading.