Bittner v. United States

Alexandru Bittner, a Romanian-born U.S. citizen, failed to file FBARs for dozens of bank accounts in Romania between 2007 and 2011. The IRS assessed $2.72 million in civil penalties, treating each unreported account as a separate violation at $10,000 per account. Bittner argued the law imposes a single $10,000 penalty per annual report form, not per account, seeking to limit liability to $50,000. The Supreme Court examined whether the Bank Secrecy Act’s penalty provision targets each unfiled report or each undisclosed account for non-willful violations.

In a 5-4 decision authored by Justice Neil Gorsuch, the Supreme Court held that the Bank Secrecy Act imposes penalties on a per-report basis, not a per-account basis. The majority found the statutory language ambiguous and applied the rule of lenity in favor of taxpayers, limiting Bittner’s maximum penalty to $50,000. Justice Amy Coney Barrett dissented, joined by three other justices, arguing the statutory context supports per-account penalties.

Whether the civil penalty for a non-willful violation of the FBAR reporting requirement accrues on a per-report basis or on a per-account basis.

The ruling significantly curbed IRS enforcement power over non-willful offshore account reporting, preventing punitive, multi-million-dollar fines for taxpayers with numerous small accounts. It provided legal clarity for individuals and advisors while prompting calls for legislative reform to explicitly authorize per-account penalties. The decision was seen as a taxpayer-friendly limitation on agency interpretation of penalty statutes.