Bittner v. United States
The Supreme Court ruled that Americans who fail to file required annual reports about their foreign bank accounts face a maximum $10,000 penalty per deficient report — not $10,000 multiplied by the number of accounts left off the form.
The decision rescued Alexandru Bittner, a dual U.S.-Romanian citizen, from a $2.72 million penalty the government calculated by multiplying $10,000 across the 272 foreign accounts he failed to report over five years, capping his exposure instead at $50,000 for five deficient annual filings.
How it got here: A federal district court sided with Bittner on the per-report reading; the Fifth Circuit reversed and upheld the government's $2.72 million penalty; the Supreme Court took the case to resolve a direct split with the Ninth Circuit.
The Case in Depth
What happened
Alexandru Bittner, a dual U.S.-Romanian citizen, spent decades running a successful business in Romania after the fall of communism and did not realize U.S. law required him to annually report his foreign bank accounts while living abroad. After returning to the U.S. in 2011, he filed corrected reports for 2007–2011, disclosing a total of 272 accounts across those five years. The government acknowledged his errors were not intentional but still assessed $2.72 million in penalties — $10,000 for each unreported account.
The question before the Court
When an American fails to properly report their foreign bank accounts to the federal government, does the $10,000 nonwillful penalty apply once per annual report filed late or incorrectly, or once for each individual account that was not properly disclosed?
The Court's answer
No — the $10,000 maximum penalty for a nonwillful failure to comply with the annual foreign-account reporting requirement applies once per report, not once for each account left off the report. The Bank Secrecy Act frames the underlying legal duty as the obligation to file a compliant report. That duty is binary: either a compliant report is filed or it is not. Multiple accounts missing from a single report may reveal one failure to comply, but they do not each generate a separate $10,000 penalty.
The Court reinforced this reading through several converging points: the penalty provision ties fines to "violations," and a violation means one deficient report; when Congress wanted per-account penalties it said so explicitly in the willful-violation section but omitted that language from the nonwillful provision; and the government's own public guidance had for years described the nonwillful penalty as up to $10,000 per filing, not per account. Justice Gorsuch and Justice Jackson additionally applied the principle that ambiguous penalty statutes should be read in favor of the individual, especially because the same provision also carries criminal consequences.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Americans living abroad, immigrants, and dual citizens who hold multiple foreign accounts and make innocent filing mistakes will face far lower penalties. A person who files one defective annual report can owe at most $10,000 total, rather than tens or hundreds of thousands of dollars multiplied by the number of accounts in the report.
What changes now
The Fifth Circuit's judgment upholding the $2.72 million penalty is reversed and the case is sent back to lower courts. Under the per-report rule, Bittner's maximum exposure is $50,000 for five deficient annual filings. The ruling also resolves the split between the Ninth Circuit (which had adopted the per-report view) and the Fifth Circuit (which had adopted the per-account view), settling the question nationwide going forward.
What this does not decide
The ruling does not decide what level of mental intent the government must prove to impose a nonwillful penalty at all. It also leaves open how to count violations when a person both fails to file on time and later files an inaccurate corrected report, and it does not address how the per-report rule applies to the separate recordkeeping obligation in the same statute.
Concurrences and dissents
Concurrence in part — Unsigned
Chief Justice Roberts and Justices Alito and Kavanaugh joined all parts of the majority opinion except Part II-C, which invokes the rule of lenity as an additional reason to favor the per-report reading. By not joining that section, they declined to rely on the lenity principle, implicitly concluding that the statutory text and context already resolve the question without needing to break any tie in the individual's favor.
Dissent — Justice Barrett
Justice Barrett argued that the most natural reading of the statute is that each failure to report a single qualifying foreign account is a separate violation. In her view, § 5314 attaches the reporting duty to each 'relation' with a foreign bank, not to the annual form used to compile those reports — so each unreported account is independently a violation. She also rejected the majority's use of the government's prior guidance and its invocation of the rule of lenity, arguing the text supplies a clear enough answer without those tools.
How the Court got there
The legal reasoning, step by step
- The Court began with 31 U.S.C. § 5314, the provision that defines what Americans must do. It requires certain people to 'file reports' about their foreign financial relationships. Notably, the word 'account' does not appear in § 5314 at all. Because the duty is framed as a duty to file reports, compliance is binary: either a compliant report is filed or it is not. A single account omitted and ten accounts omitted from the same report each represent one failure to file a legally compliant report — not multiple failures.
- The penalty provision, § 5321, authorizes a $10,000 civil fine for each 'violation' of § 5314. Since a violation under § 5314 means failing to file a compliant report, the number of nonwillful penalties tracks the number of deficient reports — and Bittner's five late annual filings produced at most five violations, not 272.
- When Congress wanted penalties measured by individual accounts, it knew exactly how to write that — and did so in the willful-violation section, where fines can reach 50% of 'the balance in the account at the time of the violation.' That account-specific language is completely absent from the nonwillful penalty provision. Under the traditional rule that omitting language from a neighboring section signals a different intent, the government's per-account theory for nonwillful violations fails twice over: both the willful-penalty provision and the reasonable-cause exception use per-account language that the nonwillful-penalty provision lacks.
- The Court found further support in the government's own conduct: for years, IRS fact sheets, form instructions, and penalty letters had told the public that nonwillful violations could result in a penalty 'not to exceed $10,000' — never mentioning that a single deficient form could multiply into millions of dollars based on account count. Under the Skidmore principle (the idea that an agency's past statements about a law can inform how persuasive its current interpretation is), the government's inconsistency counted against its per-account theory.
- Justice Gorsuch, joined only by Justice Jackson in Part II-C, also applied the rule of lenity — the principle that courts must read penalty statutes strictly in favor of individuals when the text is genuinely ambiguous. This was especially appropriate because the same statutory term 'violation' governs both civil and criminal penalties; accepting the government's per-account reading for civil fines would mean a willful violator with 272 accounts could face $68 million in fines and 1,360 years in prison, compared with $1.25 million and 25 years under the per-report reading.