Wednesday, March 1, 2023
Supreme Court Rules In Taxpayer’s Favor On FBAR Penalties
The U.S. Supreme Court ruled yesterday that penalties for non-willfully failing to file, or inaccurate filing, a Report of Foreign Bank and Financial Accounts (FBAR) Form 114 applies to each report, not each account.
Under the Bank Secrecy Act, every U.S. person with a financial interest in, or signature or other authority over, one or more foreign financial accounts with the aggregate value of $10,000 must annually report the account to the treasury department. Failure to report can result in a penalty. Penalties vary depending on whether the failure was willfull or non-willfull.
A dual Romanian-American citizen, Alexandru Bittner, filed five FBAR forms and mistakenly failed to report his foreign accounts. He later corrected the five forms, which involved 272 separate accounts. Had the Court ruled differently, the total penalty would be $2.72 million rather than $50,000.
For more information see Kelly Phillips Erb “Supreme Court Rules In Taxpayer’s Favor on FBAR Penalties” Forbes, February 28, 2023.
Special thanks to Deborah G. Matthews for bringing this article to my attention.