Bittner v. United States
598 U. S. ____ (2023) (2023)
Rule of Law:
The Bank Secrecy Act's maximum $10,000 civil penalty for a nonwillful failure to file a required Report of Foreign Bank and Financial Accounts (FBAR) accrues on a per-report basis, not on a per-account basis.
Facts:
- Alexandru Bittner, a dual citizen of the United States and Romania, returned to Romania in 1990 where he became a successful businessman.
- While living abroad, Bittner was unaware of his U.S. legal obligation to file annual reports detailing his foreign financial accounts.
- After returning to the U.S. in 2011, Bittner learned of his reporting obligations and hired an accountant to file the required reports (FBARs) for the years 2007 through 2011.
- These initial late-filed reports were deficient as they did not include information on all of Bittner's foreign accounts.
- After the government notified him of the deficiency, Bittner hired a new accountant and filed corrected, accurate FBARs for each year, disclosing all of his accounts.
- Across the five years, the corrected reports collectively involved 272 separate foreign accounts.
- The government did not contest the accuracy of the final filings and did not allege that Bittner's previous errors were willful.
Procedural Posture:
- The U.S. government assessed a civil penalty of $2.72 million against Alexandru Bittner, calculated at $10,000 per unreported account for 272 accounts over five years.
- Bittner challenged the assessment in the U.S. District Court for the Eastern District of Texas, arguing the penalty should be $50,000 ($10,000 per late report).
- The district court (a trial court) ruled in favor of Bittner, holding that the penalty accrues on a per-report basis.
- The government (United States), as appellant, appealed the decision to the U.S. Court of Appeals for the Fifth Circuit.
- The Fifth Circuit (an intermediate appellate court) reversed the district court, siding with the government and holding that penalties accrue on a per-account basis.
- Bittner, as petitioner, successfully petitioned the U.S. Supreme Court for a writ of certiorari to review the Fifth Circuit's decision.
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Issue:
Does the Bank Secrecy Act's maximum $10,000 penalty for a nonwillful failure to file a required Report of Foreign Bank and Financial Accounts (FBAR) accrue on a per-report basis or a per-account basis?
Opinions:
Majority - Justice Gorsuch
Yes, the Bank Secrecy Act's penalty for nonwillful violations accrues on a per-report basis. The statute's plain text establishes a legal duty to file 'reports,' not to report individual accounts. Section 5314, which creates the obligation, speaks of filing reports, making the failure to file a compliant report a single violation. The nonwillful penalty provision in §5321 links the penalty to 'any violation' of §5314, therefore tying the penalty to the report itself. This interpretation is supported by the canon of statutory construction expressio unius est exclusio alterius; Congress explicitly specified per-account penalties for certain willful violations and for the reasonable cause exception, but conspicuously omitted such language for nonwillful penalties. The government's per-account theory creates anomalies where nonwillful violators could face higher penalties than willful ones and is inconsistent with some of the government's own past public guidance.
Dissenting - Justice Barrett
No, the penalty should accrue on a per-account basis. The text of §5314 indicates that the reporting requirement is triggered when a person 'maintains a relation... with a foreign financial agency,' which is best understood as an individual account. Each failure to report a qualifying account constitutes a separate violation because the statute's purpose is to provide the government with specific information on each account to combat financial crimes and terrorism. The term 'violation' should be read consistently throughout the penalty statute, §5321, where the provisions for willful penalties and the reasonable cause exception both clearly contemplate account-specific violations. The majority's per-report reading undermines the statute's enforcement goals by treating a failure to report one account the same as a failure to report one hundred.
Analysis:
This decision resolves a circuit split and provides significant clarity on the scope of penalties for nonwillful FBAR violations, greatly limiting the government's ability to levy massive, potentially ruinous fines for reporting errors that are not deliberate. It reinforces a textualist approach to statutory interpretation, heavily relying on the expressio unius canon to conclude that Congress's choice to omit per-account language for nonwillful penalties was intentional. The ruling protects individuals, particularly expatriates and immigrants who may be unaware of complex reporting requirements, from disproportionate penalties and draws a sharp statutory line between the treatment of willful and nonwillful conduct.
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