Plain-English summary
Court holds $10,000 maximum nonwillful penalty applies to each report, not each account
The Court decided that the Bank Secrecy Act’s $10,000 cap on nonwillful penalties applies per report required under 31 U.S.C. §5314, not per foreign account covered by a single report. The judgment of the Fifth Circuit was reversed and the case remanded.
Why this matters
This ruling limits the government’s ability to multiply small nonwillful penalties across many foreign accounts when those accounts should have been reported together. That reduces potential aggregate fines in many failure-to-report cases and provides clearer, predictable limits on civil liability under the Bank Secrecy Act for nonwillful violations.
Who may feel it
- US taxpayers with foreign financial accounts
- Tax and financial advisors who prepare foreign-account reports
- Attorneys and courts handling FBAR and Bank Secrecy Act enforcement
- IRS and Treasury enforcement programs
Key questions
- Does the Bank Secrecy Act’s $10,000 cap on nonwillful penalties apply per report or per foreign account?
- How should courts calculate total civil penalties when one report should have included multiple foreign accounts?