Under the Bank Secrecy Act (BSA),1 taxpayers must maintain records regarding their foreign financial accounts and file annual reports disclosing those accounts. As part of its recent attack on undisclosed accounts, the Department of Justice has issued numerous subpoenas requiring taxpayers to produce the records mandated by the BSA. Not surprisingly, several taxpayers who failed to comply with the reporting requirements have sought refuge in the Fifth Amendment privilege against self-incrimination.
Two years ago, this column addressed the then-conflicting body of case law addressing challenges to such subpoenas.2 At that time, the one appellate court to address the issue had agreed with the government, while one district judge had ruled in favor of the taxpayer. In the interim, however, the courts have been virtually unanimous in rejecting the taxpayers’ position.3 On Dec. 19, 2013, the U.S. Court of Appeals for the Second Circuit joined with the five other circuit courts to address the issue in holding that the required records doctrine precludes application of the Fifth Amendment in these circumstances.4
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