Thread by @ExpatriationLaw

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.

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