Case Digest: Bittner v. United States

This case centered on the interpretation of the Bank Secrecy Act’s (BSA) penalty provisions for nonwillful violations in failing to file a Report of Foreign Bank and Financial Accounts (FBAR). The key legal doctrine established was that the maximum $10,000 penalty for nonwillful violations accrues on a per-report, not a per-account basis.

Introduction:
Bittner v. United States presented a significant legal question regarding the application of penalties under the Bank Secrecy Act for nonwillful failure to file FBARs. This case is pivotal in clarifying the extent of penalties imposed on U.S. persons who have financial interests in foreign accounts and fail to comply with reporting requirements.

Facts of the Case:
Alexandru Bittner, a dual citizen of Romania and the United States, failed to file timely and accurate FBARs for several years. After learning of his reporting obligations, Bittner filed corrected reports for a significant number of foreign accounts. The government, considering each unreported account as a separate nonwillful violation, assessed a total penalty of $2.72 million. Bittner challenged this, arguing that the BSA authorizes a maximum penalty of $10,000 per report, not per account.

Issue of the Case:
The legal issue was whether the BSA's $10,000 penalty for nonwillful failure to file an FBAR accrues per report or per account.

Ruling of the Case:
The Supreme Court held that the BSA imposes a maximum penalty of $10,000 for nonwillful failure to file a compliant FBAR on a per-report basis, not per account. This interpretation was based on the statutory language, the structure of the BSA, and principles of statutory construction, including the rule of lenity.

Impact on the Legal System:
This ruling significantly impacts the penalty assessment for nonwillful FBAR violations. It limits the financial burden on individuals who fail to file FBARs without willful intent, aligning penalties with the nature of the violation and ensuring proportionality in enforcement.

Conclusion:
Bittner v. United States resolves a critical ambiguity in the BSA, emphasizing the importance of statutory interpretation in determining liabilities under federal law. The decision underscores the necessity of clear legislative language and demonstrates the judiciary's role in resolving ambiguities in federal statutes.