Tuning in on the live argument in the Bitter #FBAR case. Will tweet some of my thoughts/impressions as this unfolds. supremecourt.gov/oral_arguments…
Suggestion that existence of "reasonable cause" mitigates against the threat of draconian penalties.
Judges suggesting that the quantum in the unreported accounts matters. "If you fail to do what the secretary required you to do then you are subject to a penalty of $10,000".
The justices seem to think that "reasonable cause" matters in a practical sense.
Justice (I think) Kagan is focussing on the text of 5314 and points out that the word "account" is not in the section.
Discussion focussing on the fact that the Title 31 does NOT focus on accounts specifically.
Fortunately the discussion is revolving around the difference between the statute and the regulation.
Is it a problem that not filing and filing an incomplete FBAR would be subject to the same $10,000 penalty?
Turbo tax does NOT prompt people file an FBAR ...
Common for people to not file bc they don't know they have to file an FBAR.
Discussing what is necessary to qualify for "reasonable cause" (account needs to be reported) ...
What does it mean to "correctly report the balance of the accounts" (to qualify for reasonable cause).
Judges saying that the statute - 5314 - is account specific. This spells trouble for Bittner.
Justice Thomas: The Secretary can change the regulation and require "one report per account". Geyser maintains that Congress did NOT write "account specific" reports in the statute.
Geyser continues to press that the regulation requires one report ...
Judges suggest "If you have a relationship and account tell the government about it" ... Suggesting this is the whole purpose of the statute ...
Difference between equating a report with a form vs. equating a report with an account ... (Judges trying to focus on intended purpose) ...
Geyer keeps focussing on the statutory duty and NOT on the specific accounts.
Justice Gorsuch: Focuses on the 25 or more exception - how does this impact the argument?
Justice Kavanaugh: "Broad context is the 911 and the Patriot Act - puts the duty on the individual to know about their #FBAR obligations".
Justice Barrett: Focusing on 5314 - is the record keeping requirement account specific?
Justice Alito: "Is there a temporal requirement for the recording keeping?"
Questions for Geyser are over. Moving on to the government which is saying there were 272 violations.
Justice Thomas - 5314 doesn't mention accounts at all ...
Justice Jackson: "It's not illegal to have foreign bank accounts ..." The govt. knows you are a person with account(s) by reporting only one account ... Yet people are penalized for totally lawful behaviour
Justice Jackson is asking the best question(s) ...
Justice Jackson is focussing on what the statute says!
Govt lawyer: If you misstate the address you violate 5314.
Govt: Reasonable cause is not established by ignorance of the law ...
Govt again says that ignorance of the law is NOT reasonable cause!
Does the US agree that if the words of a tax statute are vague that it should be construed agains the gov? But, the gov says: This is NOT a tax statute!
Kavanaugh: asking about the second part of the reasonable cause provision - balance of account properly reported at the time the reasonable cause argument is being made.
Justice Gorsuch: 5321 does NOT talk about accounts. Shouldn't the absence of the word "account" matter?
Justice Gorsuch: Reasonable cause is an affirmative defence!
Justice Gorsuch: Asking about the gov #FBAR guidance documents. The IRM expresses the "per form" view. March 2011 version says that the penalty cannot exceed $10,000.00 ...
Gov now focussing on the fact that Bittner made a lot of money and ignored Schedule B question about FBAR. Therefore, the gov position is somehow "fair".
Judge references #Americansabroad - who are the populations who are not reporting? The gov says it does not know what % of #Americansabroad have reportable accounts ...
Justice Gorsuch: very concerned with the relationship between ignorance of the law and reasonable cause ... What is the relationship exactly? Gov says: reasonable cause means acting with ordinary business care (should they have known about filing obligations)?
Gov is making the idiotic argument that ordinary taxpayers have access to "judicial review".
Justice Jackson is again standing up for the individual taxpayer! Refers to #Americansabroad being subject to #FBAR.
Justice Gorsuch: Asking about the significance of the 25 account rule. Why are those with more bank accounts less susceptible to penalties than those with fewer accounts (address mistake, etc.)
Gov lawyer serves notice that the gov is planning to change the 25 account. regulation.
Now moving back to Geyer for rebuttal. Making the point that reasonable cause (to make the case) is a huge burden for the average person to make the case.
Geyser: It is NOT unusual for #Americansabroad to have accounts that exceed the $10,000. The gov lawyer is seriously claiming that is unusual for #Americansabroad to have accounts in excess of $10,000.
It's over - Justice Roberts end with:

"Thank you counsel - the case is submitted."
My reaction: #Americansabroad should renounce US citizenship ASAP. This is absolutely insane. It likely will NOT be unanimous decision. I don't have a good feel on which way it will go. But, Justices Jackson and Gorsuch appear to be on the side of fairness and justice (per form).
BTW - Justice Gorsuch (Trump appointment) and Justice Jackson (Biden appointment) were the Justices who made the attempt to understand and explore how this #FBAR nonsense applies and the fairness of the application.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with John Richardson - lawyer for "U.S. persons" abroad

John Richardson - lawyer for

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @ExpatriationLaw

Oct 31
The National Whistleblower Centre has filed an amicus brief in Bittner - TOTALLY DEVOID OF LEGAL ARGUMENT - arguing for per account #FBAR penalties because higher penalties would create incentives for Whistleblowers" to report @InFBARWeTrust violations. supremecourt.gov/DocketPDF/21/2… Image
As evidence of the significance of #FBAR violations (and therefore the need to incentivize whistleblowers) the brief cites statistics on the small number of FBARs filed in comparison to the far larger number of #Americansabroad (relying on info from @aaro). ImageImage
The brief seems to advocate that: 1. There is severe #FBAR noncompliance 2. The Government needs whistleblowers 3. Per account penalties will result in higher total penalties 4. The higher the penalty the more likely the whistleblowers will step in to assist the government. Image
Read 8 tweets
Sep 28
2022 FATCA Report: If US doesn't agree to amend #FATCA IGAs to include full reciprocity and respect GDPR (which it won't) options include: 1. Blocking law generally 2. Blocking law for @USAccidental 3. Deem #FATCA inapplicable to European residents period! europarl.europa.eu/RegData/etudes… ImageImageImage
The very last paragraph explains that #FATCA is not in the spirit of multilateral cooperation. Basically it saying that the US is essentially a 100% taken and a 0% giver. But, we know that Image
A "blocking" statute is a law that "blocks" the application of certain laws ... en.wikipedia.org/wiki/Blocking_….
Read 10 tweets
Sep 25
In her own words “Nancy” in a message to @DemsAbroad (1) fails to identify #Americansabroad as a priority while mentioning other groups (2) confirms that your value is ONLY in your vote. A vote for a Democrat anywhere is a vote against every American abroad everywhere.
@DemsAbroad Did @DemsAbroad assist in drafting this message? If yes DA confirms #Americansabroad are not a priority. If no @TheDemocrats confirm #Americansabroad not a priority.
Seriously, @DemsAbroad needs to respond to this “tone deaf” message from Nancy. You couldn’t invent a more offensive message if you tried. Maybe @DemsAbroadCan (home of so many potential voters) could/should respond?
Read 8 tweets
Sep 8
Lesson from @VLJeker: Some people may never be able to renounce US citizenship. Others may have capacity to renounce now but may not have the capacity to renounce in the future. The inability to renounce has implications for estate and life planning and should be taken seriously!
@VLJeker I have and do see cases where the aging process has eroded the capacity to form the intention to renounce. The result is that certain people are forced to continue to live and die as US citizens. While not a problem for US residents, it can be a big problem for #Americansabroad.
Problems of living/dying as @USCitizenAbroad include: 1. US @citizenshiptax regime while alive 2. Estate having to file US tax returns at death 3. Difficulties leaving assets to nonresident alien spouse 4. Possible Estate Tax 5. Estate Tax return to transfer certain US assets
Read 7 tweets
Sep 4
Supreme Court Asked to Consider if FBAR Penalty Is Excessive Fine taxnotes.com/research/feder…
Separately on Nov. 2/22, in Bittner, the US Supreme Court will hear the case on the issue of whether the non-willful civil #FBAR penalty (found in 5321) - can be applied (based on a reading of 5314) on a "per account" or on a per "form" basis. It's the season of @InFBARWeTrust!
So, Bitter is about the interpretation of penalty application under 31 USC 5314 and 5321. Toth (if the Supreme Court hears the case) is about whether there are constitutional limitations to any penalties imposed under 31 USC 5321.
Read 10 tweets
Aug 7
@AmerIronCurtain @BlognDog @AmExpatFinance @CrossBriton @tconsult @ACAVoice @CitizenshipTax 1. Look at the various lawsuits. Not a single one so far is focussed on ending @Citizenshiptax. 2. Look at @Demsabroad and @ACAVoice - neither has the slightest interest is severing citizenship from @taxresidency. 3. Individuals follow the various orgs. ...
@AmerIronCurtain @BlognDog @AmExpatFinance @CrossBriton @tconsult @ACAVoice @CitizenshipTax @DemsAbroad @TaxResidency 4. Complexity: Very difficult to understand all the moving parts and how they integrate. 5. Unbelievable ignorance of the the tax compliance community (making claims like treaties prevent double tax and this form is only an information return which doesn't result in tax owing ...
@AmerIronCurtain @BlognDog @AmExpatFinance @CrossBriton @tconsult @ACAVoice @CitizenshipTax @DemsAbroad @TaxResidency 6. Confusing symptoms/result of the problem (PFIC, #GILTI, etc) with the actual problem problem @citizenshiptax 7. Believing that not filing (personal solution) is somehow a general solution ...
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!