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The Supreme Court Deals IRS a Losing Hand in FBAR Non-Willful Penalty Case by ROBERT HORWITZ

On February 28, 2023, the Supreme Court issued its opinion in Bittner v. United States, ___ U.S. ___, 143 S.Ct. 713, 2023 WL 2247233, holding that the non-willful FBAR penalty is applied per annual report and not per account. For the past few years, the IRS has taken the position that it could impose a separate $10,000 non-willful FBAR penalty based on the number of foreign accounts a U.S. person failed to properly report. The Ninth Circuit rejected the Government’s argument and held the maximum penalty per year is $10,000, United States v. Boyd, 991 F. 3d 1077 (2021), while the Fifth Circuit held the $10,000 penalty could be imposed per account. United States v. Bittner, 19 F. 4th 734 (2021).

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