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United States Court of Appeals for the Fifth Circuit
November 30, 2021, Filed
[*737] Stuart Kyle Duncan, Circuit Judge:
Alexandru Bittner non-willfully failed to report his interests in foreign bank accounts on annual FBAR forms, as required by the Bank Secrecy Act of 1970 (BSA) and regulations thereunder. See 31 U.S.C. § 5314; 31 C.F.R. §§ 1010.306, 1010.350. The government assessed $2.72 million in civil penalties against him—$10,000 for each unreported account each year from 2007 to 2011. The district court found Bittner liable and denied his reasonable-cause defense. But it reduced the assessment to $50,000, holding that the $10,000 maximum penalty attaches to each failure to file an annual FBAR, not to each failure to report an account.
We affirm the denial of Bittner's reasonable-cause defense but reverse with respect to application [**2] of the $10,000 penalty. We hold that each failure to report a qualifying foreign account constitutes a separate reporting violation subject to penalty. The penalty therefore applies on a per-account, not a per-form, basis. On this point, we part ways with a recent Ninth Circuit panel, which split on this issue. See United States v. Boyd, 991 F.3d 1077, 1080-86 (9th Cir. 2021) (adopting per-form interpretation). But see id. at 1086-91 (Ikuta, J., dissenting) (taking per-account view).1 Accordingly, we affirm in part, reverse in part, vacate, and remand.
In 1970, Congress enacted the BSA "to require certain reports or records where such reports or records have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings." Currency and Foreign Transactions Reporting Act of 1970, Pub. L. No. 91-508, § 202, 84 Stat. 1114 (codified as amended at 31 U.S.C. § 5311). A primary purpose of the BSA was to curb the "serious and widespread use" of foreign financial accounts to evade taxes. Cal. Bankers Ass'n v. Shultz, 416 U.S. 21, 27, 94 S. Ct. 1494, 39 L. Ed. 2d 812 (1974).
The BSA, as amended, provides in relevant part, "the Secretary of the Treasury shall require a resident or citizen of the United States . . . to keep records, file reports, or keep records and file reports, when the . . . person makes a transaction or maintains a relation for any person [**3] with a foreign financial agency." 31 U.S.C. § 5314(a). The BSA requires that the records and reports contain specific information "in the way and to the extent the Secretary prescribes." Ibid. It directs the Secretary to consider "the need to avoid burdening unreasonably a person making a transaction with a foreign financial agency" when prescribing reporting and record-keeping procedures. Ibid.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
19 F.4th 734 *; 2021 U.S. App. LEXIS 35341 **; 2021-2 U.S. Tax Cas. (CCH) P50,242
UNITED STATES OF AMERICA, Plaintiff—Appellee/Cross-Appellant, versus ALEXANDRU BITTNER, Defendant—Appellant/Cross-Appellee.
Subsequent History: Petition for certiorari filed at, 02/28/2022
Prior History: [**1] Appeal from the United States District Court for the Eastern District of Texas. USDC No. 4:19-CV-415.
United States v. Bittner, 469 F. Supp. 3d 709, 2020 U.S. Dist. LEXIS 113416, 2020 WL 3498082 (E.D. Tex., June 29, 2020)
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Banking Law, Bank Accounts, Anti-Money Laundering & Bank Secrecy, Remote Deposit Capture, Civil Procedure, Summary Judgment, Summary Judgment Review, Standards of Review, Governments, Legislation, Interpretation, Evidence, Burdens of Proof, Allocation, Administrative Law, Agency Rulemaking, Rule Application & Interpretation, Binding Effect, Tax Law, Federal Tax Administration & Procedures, Administration