On February 28th, the US Supreme Court decided that the Bank Secrecy Act’s (the “BSA”) $10,000 penalty for the nonwillful failure to file a Report of Foreign Bank and Financial Accounts (or “FBAR”) applies on a per-report and not per-account basis.

The 5-4 decision made a $2,670,000 difference to Alexandru Bittner, a naturalized US citizen who had been living in Romania since the 1990s. From 2007 through 2011, Mr. Bittner at any one time held between 51 and 61 bank accounts spread across Romania, Switzerland, and Liechtenstein. As Mr. Bittner failed to file an FBAR report with the Financial Crimes Enforcement Network (or “FinCEN”) for those five years, the IRS determined Mr. Bittner owed the $10,000 penalty for each account he had failed to report—a total of 272 accounts. The Service therefore imposed a $2.72 million total penalty on Mr. Bittner for tax years 2007–2011.

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