Favorable FBAR Ruling For Gamblers

Earlier this year, I touched upon the Bittner case, which addressed the maximum penalty for non-willfully filing FBARs. Is it $10,000 per year? Or $10,000 per account, per year?

I am, admittedly, a bit late to addressing this, but the Supreme Court ruled that taxpayers are only subject to a maximum penalty of $10,000 per year. The penalty cannot be assessed per account, per year. In the Bittner case, since the taxpayer had failed to file FBARs for 5 years, he will only face a $50,000 penalty, instead of the proposed $2.7 million penalty by the IRS.

This is a huge relief (and win) for taxpayers with foreign bank accounts. There has been uncertainty around FBARs in the online gambling space for quite some time. I have always been a proponent of declaring all online gambling account balances appropriately to avoid any doubt. For those taxpayers who have not reported in the past, there is, at least, some clarity around the maximum imposed penalty.

It is nice to see the Supreme Court took a logical position to only penalize taxpayers one time per year, regardless of the total number of accounts.

You can find the complete ruling here.