The dissent, on the other hand, believed a per-account penalty better promotes the purpose of cracking down on criminals and terrorists, a point the majority disputed.Īlso concerning to the majority was the incongruity invited by a per-account approach. The majority also noted that the statute’s preamble clause said nothing about a desire by Congress to maximize penalties for every nonwillful mistake, which supported a per-FBAR report view. The dissent dismissed the prior guidance as adding little because the traditional tools of construction supplied the answer in this case. But this Court has long said that courts may consider the consistency of an agency’s views when we weigh the persuasiveness of any interpretation it proffers in court.” Slip op. “Doubtless, the government’s guidance documents do not control our analysis. The majority gave less weight to the per-account theory because the government’s prior guidance to the public did not warn of its current view advocated in court. Of note, no IRS regulation required a penalty on a per-account basis, which bypassed the regulation invalidity issues and agency deference issues that are a common feature of many tax cases in the current environment. Going beyond the text, the majority turned to “contextual clues” against the government’s theory, including inconsistent prior administrative guidance, statutory purpose, and potential absurd results. Because the obligation is to report the account, according to the dissent, the government may impose a penalty per-account.Ĭontextual Clues Identified by the Majority to Support Its Reading Pointing to the regulations, the dissent also identified that the FBAR form is not the “report” but simply the procedural tool used to implement the reporting duty. The statute’s pattern of account-specific language meant the nonwillful penalty must also operate on a per-account basis, Justice Barrett wrote. The dissent, instead, favored the canon that “identical words used in different parts of the same statute are generally presumed to have the same meaning.” Slip op.
#Irss umass how to
In other words, if Congress wanted to tie penalties to account-level information, it knew how to do so, but did not.
Justice Gorsuch leaned on the canon that, “When Congress includes particular language in one section of a statute but omits it from a neighbor, we normally understand that difference in language to convey a difference in meaning ( expressio unius est exclusio alterius).” Slip op. The majority rejected the government’s theory that because the statute authorizes per-account penalties for some willful violations, and has an account-specific reasonable cause exception, the Court should infer Congress meant nonwillful violations to be account-specific too. Because the duty is to file reports, the penalty accrues per-FBAR report. Thus, the statute establishes a binary duty-either one files a compliant report, or one does not. Section 5314 does not speak of accounts or their number but rather the legal duty to file reports” that include information about a person’s foreign “transaction or relationship.” Slip op. Justice Gorsuch, writing for the majority, observed, “Immediately, one thing becomes clear. person makes a transaction or maintains a relation for any person with a foreign financial agency.” For “any violation” of this reporting duty, § 5321 authorizes a civil penalty up to $10,000. citizens “to keep records, file reports, or keep records and file reports, when the. § 5314, directs the Secretary of the Treasury to require U.S. The statute at issue, the Bank Secrecy Act, 31 U.S.C. Not surprisingly, the Court’s analysis began with the terms of the statute itself. Astute taxpayers, tax advisors, and tax litigators will apply insights from this latest opinion - reviewed in this alert - in providing tax advice and developing advocacy strategies. The case once again highlights that the rules of statutory construction are not merely academic. Justice Barrett wrote a dissenting opinion, joined by Justices Thomas, Sotomayor, and Kagan. In an unusual line-up, Justice Gorsuch led a majority that included Justices Jackson, Alito, Kavanaugh, and Roberts. The Justices’ differing interpretations led them into a split decision. Like many tax cases, this case required the Court to decide how best to read a statute. The taxpayer avoided a $2.7 million penalty tied to 272 separate foreign accounts. As a result, the penalty at issue in the case is capped at $50,000 for failure to timely file FBAR forms for five years.
United States, ruling that the Bank Secrecy Act’s $10,000 maximum penalty for a nonwillful failure to file a timely and accurate FBAR report accrues on a per-FBAR report, not a per-account, basis. Today, the Supreme Court issued a 5-4 decision in Bittner v.
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