On Feb. 28, 2023, the U.S. Supreme Court handed a rare victory to taxpayers facing extremely harsh IRS penalties for failing to timely or accurately file Foreign Bank Account Reports (FBARs).

In a 5-4 decision in Bittner v. United States, 215 L. Ed. 2d 1 (2023), the Supreme Court held that the $10,000 per violation non-willful FBAR penalty, contained in 31 USC § 5321, applies only to each FBAR and not to each account listed in that FBAR. In deciding Bittner, the Supreme Court resolved a conflict between the U.S. Court of Appeals for the Ninth Circuit, which held that non-willful FBAR penalties apply on a per FBAR basis only (United States v. Boyd, 991 F.3d 1077 (9th Cir. 2021)) and the Fifth Circuit, which upheld $2.7 million in non-willful per account FBAR penalties against Alexandru Bittner (Bittner, 19 F. 4th 734 (5th Cir. 2021)).

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