Are missed FBAR penalties charged per form or per account?

For non-willful violations they are charged per form. In Bittner v. United States, decided on 28 February 2023, the Supreme Court held that the maximum penalty for a non-willful failure to file a compliant report accrues on a per-report basis, not a per-account basis. Willful violations are different and continue to be computed per account under the Internal Revenue Manual. This means one missed annual report is one non-willful violation regardless of whether it should have listed three accounts or three hundred.

If I missed six years of FBARs, is that one violation or six?

Six. Bittner attaches the non-willful violation to the report, and one report covers one calendar year, so each missed year is a separate violation. This is why the number of open report years, rather than the number of accounts, is now the multiplier in a non-willful case. The government generally has six years from each report's due date to assess the civil penalty under 31 U.S.C. section 5321(b).

How much is the non-willful FBAR penalty now?

The statutory maximum in 31 U.S.C. section 5321(a)(5)(B)(i) is 10,000 dollars per report, but the IRS confirms that Title 31 civil FBAR penalty maximums are adjusted annually for inflation, so the operative ceiling in any given year is higher than the statutory figure. The current adjusted amount should be confirmed for the specific year in question before it is relied on. A separate limit in IRM 4.26.16 provides that total non-willful penalties across all open years will not exceed 50 percent of the highest aggregate balance of the accounts to which the violations relate.

Did Bittner change willful FBAR penalties?

No. The Court decided only how the non-willful penalty is counted, and the willful branch of the statute contains its own per-account language that the decision did not disturb. Willful penalties remain computable per account at the greater of the inflation-adjusted statutory figure or 50 percent of the account balance at the time of the violation. The Court also did not decide what standard establishes willfulness, so that question continues to be governed by lower court authority.

Does Bittner change the Streamlined Foreign Offshore Procedures?

It does not change how they work. A qualifying US person resident outside the United States still files three years of returns, six years of FBARs and a Form 14653 certification of non-willful conduct, and the IRS states that qualifying taxpayers are not subject to FBAR penalties on an accepted submission. What Bittner changes is the size of the alternative if the route is unavailable or unsuccessful, because that alternative is now a per-report rather than a per-account computation. Eligibility is still lost once the IRS initiates a civil examination for any year.

Do I have to report accounts I only sign on at work?

Yes. The FBAR reaches accounts over which you hold signature or other authority even where you have no beneficial interest and receive no benefit from the funds. For someone working in banking this often includes employer operating accounts, deal and escrow accounts, and accounts attached to a directorship, and it is usually the largest driver of a high account count. After Bittner those accounts no longer multiply your non-willful exposure, but omitting them still means the report you filed was not a compliant one.

Missed FBAR Penalties After Bittner: Per-Form Rule

Missed FBAR penalties for a non-willful failure to report foreign accounts now accrue once per unfiled annual report, not once for every account that should have appeared on it. That is the direct holding of the Supreme Court in Bittner v. United States, No. 21-1195, 598 U.S. 85, decided on 28 February 2023. For a US person building a career in London, the practical translation is blunt: the length of your account list no longer drives your non-willful exposure. The number of years you failed to file does.

That distinction is worth more to an investment banker than to almost any other category of American abroad. A managing director in London does not hold two accounts. Between current and deposit accounts at more than one UK institution, a stockbroking or platform account, a joint account with a spouse, a foreign currency account used for bonus receipts, an offset facility attached to a mortgage, and any account over which the individual holds signature or other authority through their employment, an account inventory of thirty, forty or more is entirely ordinary. Under the position the government argued and lost in Bittner, that inventory was a multiplier. After Bittner, on the non-willful branch, it is not.

This article sets out precisely what the Court decided, what it deliberately left undecided, how the Internal Revenue Service has since instructed its own examiners to compute the penalty, and how all of that interacts with the Streamlined Foreign Offshore Procedures and with multi-year exposure. It is written for readers whose account count is high and whose margin for error is low.

What did the Supreme Court actually hold in Bittner v. United States?

Alexandru Bittner was a dual citizen who failed to file FBARs while living abroad and later filed them late. Across the years 2007 to 2011 he held interests in 272 foreign financial accounts, reported on five annual reports. The government assessed a civil penalty of 2.72 million dollars, arriving at that figure by applying the 10,000 dollar statutory maximum for a non-willful violation to each of the 272 accounts. Bittner argued the statute authorises a maximum of 10,000 dollars per report, which across five late reports produced 50,000 dollars. The district court agreed with Bittner; the Fifth Circuit reversed and adopted the per-account reading, creating a conflict with the Ninth Circuit's per-report approach.

The Supreme Court sided with Bittner. The reporting duty sits in 31 U.S.C. section 5314, which requires a US person to file a report. The civil penalty for a non-willful violation sits in 31 U.S.C. section 5321(a)(5)(A) and (B)(i). The Court read the statutory scheme as attaching the violation to the failure to file a compliant report, not to each account omitted from it. Its conclusion, in the syllabus language, is that the maximum penalty for the non-willful failure to file a compliant report accrues on a per-report, not a per-account, basis. Bittner's exposure fell from 2.72 million dollars to 50,000 dollars.

Two features of the decision matter to anyone relying on it. First, it was decided 5-4. Justice Gorsuch announced the judgment, with Justice Barrett dissenting joined by Justices Thomas, Sotomayor and Kagan. Second, the portion of the opinion invoking the rule of lenity, the principle that penal statutes are construed strictly against the government, was Part II-C and was joined only by Justice Jackson. That passage is therefore a plurality view, not a holding. Practitioners who want to extend lenity reasoning into the willful branch of the statute should understand that they are building on a foundation that four members of the Court declined to join.

How missed FBAR penalties are calculated: per-form vs per-account FBAR penalty

The FBAR itself is FinCEN Form 114. It is filed with the Financial Crimes Enforcement Network through the BSA E-Filing System, not with your federal income tax return, and it is required where the aggregate value of your foreign financial accounts exceeded 10,000 dollars at any time during the calendar year. The IRS states that the report is due on 15 April with an automatic extension to 15 October, with no request required. One report covers one calendar year and every reportable account you held in it.

The civil penalty regime that sits behind that report has two branches, and Bittner touched only one of them.

Non-willful branch, 31 U.S.C. section 5321(a)(5)(A) and (B)(i): a statutory maximum of 10,000 dollars, applied per report after Bittner. That statutory figure is adjusted annually for inflation under the Federal Civil Penalties Inflation Adjustment Act, so the operative ceiling in any given year exceeds 10,000 dollars. The IRS confirms on IRS.gov that Title 31 civil FBAR penalty maximums are adjusted annually for inflation; the current adjusted figure should be confirmed against the applicable year before any number is relied on.
Willful branch, 31 U.S.C. section 5321(a)(5)(C) and (D): the greater of the 100,000 dollar statutory figure, likewise inflation adjusted, or 50 percent of the amount in the account at the time of the violation. The Internal Revenue Manual is explicit that this branch is applied on a per-account basis. Bittner did not change that.
Reasonable cause relief, 31 U.S.C. section 5321(a)(5)(B)(ii): no non-willful penalty where the violation was due to reasonable cause and the balance in the account was properly reported. The Internal Revenue Manual instructs examiners not to impose the non-willful penalty where the violation was due to reasonable cause and accurate delinquent or amended FBARs are filed to rectify the prior violations.
Assessment period, 31 U.S.C. section 5321(b): the government has six years to assess the civil FBAR penalty, running from the date the report was due.
The FBAR is a Title 31 filing, not a Title 26 tax filing. It is distinct from Form 8938, the FATCA statement of specified foreign financial assets filed with the return, and the two have different thresholds, different agencies and different penalty regimes. Filing one does not satisfy the other.

Before Bittner, the government's reading turned the second column of your account schedule into the penalty calculation. After Bittner, on the non-willful branch, the calculation looks only at how many annual reports were missed or filed incompletely. The account schedule still has to be right, and it still matters for reasons set out below, but it no longer supplies the multiplier.

A worked example: a London-based investment banker with 41 reportable accounts

Consider a US citizen who has worked in London since 2019, has filed US federal returns every year through a preparer who never asked about foreign accounts, and has never filed an FBAR. She discovers the requirement in 2026 and instructs a review. The review identifies 41 reportable accounts across the six calendar years 2019 to 2024, with a highest aggregate balance across all accounts in the worst year of 4,000,000 dollars. Her conduct is non-willful on the facts: she relied on a preparer, she declared and paid tax on the underlying income, and there is no pattern of concealment.

Two UK current accounts and two deposit accounts held personally.
One joint current account with her spouse, reportable in full because she holds a financial interest in it.
One stockbroking account and two platform accounts holding listed investments.
One foreign currency account used to receive bonus payments.
Twenty-eight accounts over which she holds no beneficial interest at all but does hold signature or other authority, arising from her employment and from her role on transaction-related accounts.
Four legacy accounts opened on arrival and left with small balances, which she had forgotten about entirely.

Under the per-account theory the government advanced in Bittner, the arithmetic is 41 accounts multiplied by six report years multiplied by the inflation-adjusted non-willful maximum. Using the unadjusted 10,000 dollar statutory figure purely to illustrate the shape of the calculation, that is 246 violations and a headline exposure of 2,460,000 dollars, before any inflation uplift. That is a number that ends careers and forces the sale of assets, and it arises on facts where nobody has alleged any intent to conceal anything.

Under Bittner, the arithmetic is six missed reports multiplied by the inflation-adjusted non-willful maximum. Using the same unadjusted statutory figure for illustration, that is six violations and a headline exposure of 60,000 dollars. The account count drops out of the computation entirely. The exposure has fallen by a factor of forty-one, and it did so because of how the Supreme Court read the words of section 5321, not because of anything she did differently.

Two further points about that 60,000 dollar illustration. It is a ceiling, not an assessment: the statutory maximum is what the examiner may impose, not what the examiner must impose. And it is a ceiling that assumes the reasonable cause defence fails and that no compliance route is used. Where the facts support non-willfulness and the Streamlined Foreign Offshore Procedures are available and correctly used, the outcome on FBAR penalties is nil. The gap between 2,460,000 dollars and nil is the gap that preparation closes.

What did Bittner not decide?

This is where careless commentary does the most damage. Bittner is a narrow statutory construction case about how one penalty is counted. It is not a general softening of the FBAR regime, and reading it as one is a serious preparation error.

It did not decide the willfulness standard. Whether recklessness or wilful blindness suffices to make a violation willful was not before the Court and remains governed by lower court authority.
It did not decide how willful penalties are counted. The willful branch of the statute contains its own per-account language, and the Internal Revenue Manual continues to compute willful penalties per account.
It did not decide the mens rea standard that applies to the non-willful penalty itself.
It did not decide the merits of the reasonable cause defence. Bittner's reasonable cause argument had been rejected below, and the Court did not reach it.
It did not create an automatic refund. Taxpayers previously assessed and paid on a per-account basis may have a refund position, but that is a separate claim on its own timeline, not an automatic consequence of the decision.
It did not address criminal exposure, which runs on a wholly separate track from the civil penalty regime.

The most consequential of these is the first two taken together. Bittner removed the government's ability to generate very large numbers from the non-willful branch. It left entirely intact the government's ability to generate very large numbers from the willful branch. That asymmetry has a predictable behavioural consequence, and it is the single most important strategic point in this article.

Why the number of accounts still matters after Bittner

Almost every published commentary on Bittner tells the reader that the account count no longer matters. That is true only within the non-willful branch. On the willful branch, the account count is not merely relevant, it is the engine of the calculation: the penalty is the greater of the inflation-adjusted statutory figure or half the balance in the account at the time of the violation, applied account by account, year by year. A long account inventory attached to substantial balances produces willful exposure that can exceed the value of the accounts themselves across multiple years.

For a professional with 41 accounts and multi-million dollar aggregate balances, this reframes where preparation effort belongs. Before Bittner, the fight over willfulness was somewhat academic because the non-willful outcome was already ruinous. After Bittner, the non-willful outcome is survivable and the willful outcome is not, so the entire economic weight of the matter now rests on a single characterisation question. The government knows this too. Practitioners have anticipated since 2023 that the natural response to losing the per-account argument on the non-willful side is to assert willfulness more readily. Anyone preparing a disclosure should assume that the non-willfulness of their conduct will be scrutinised harder than it would have been before 2023, and should build the file accordingly rather than treating Bittner as a reason to relax.

The administrative ceiling that most commentary on missed FBAR penalties leaves out

There is a second constraint on non-willful exposure that almost no published guide mentions, and it comes not from the Court but from the IRS itself. Following the decision, the IRS issued interim guidance to its examiners, SBSE-04-0723-0034, Interim Guidance on FBAR Examination Case Procedures Due to Supreme Court Decision (Bittner v. US), effective 6 July 2023. That guidance has since been incorporated into the Internal Revenue Manual at IRM 4.26.16, the section that governs FBAR examinations.

IRM 4.26.16 states that in no event will the total amount of the penalties for non-willful violations, among all open years, exceed 50 percent of the highest aggregate balance of all foreign financial accounts to which the violations relate. That is an aggregate cap sitting on top of the per-report ceiling, and it binds examiners across the whole examination rather than year by year. The manual also frames the non-willful computation as a matter of examiner discretion within those limits, rather than a mechanical maximum applied by default. For a reader with a long account list, this second ceiling is not academic: it is the outer boundary of the worst realistic non-willful case, and it is stated in the government's own operating instructions. Knowing it exists changes how a disclosure is negotiated and stops a well-advised filer from accepting a number that the manual would not support.

Why open years, not accounts, are now the multiplier

If the account count has dropped out of the non-willful computation, something has to replace it, and that something is time. Every calendar year in which a required report was not filed is a separate report and therefore a separate violation. The government has six years under 31 U.S.C. section 5321(b) to assess the civil penalty, running from the date each report was due. Because the FBAR for a calendar year is due on 15 April of the following year, the six-year window for each year opens and closes independently. Delay is therefore not neutral in either direction: older years fall out of assessment reach, but every additional year of non-filing adds a fresh violation at the front end.

This produces an arithmetic that almost no competing guide works through. A banker who has missed three years and a banker who has missed six years may have identical account inventories and identical balances, and yet the second faces double the non-willful exposure of the first purely because of elapsed time. The correct response is not to wait for years to age out. It is to establish, at the outset of any review, exactly which report years are open, which are still within the assessment window, and what the aggregate balance was in the highest year, because that last figure sets the administrative ceiling described above.

How does Bittner interact with the Streamlined Foreign Offshore Procedures?

For a US person genuinely resident in the United Kingdom whose failure to file was non-willful, the Streamlined Foreign Offshore Procedures remain the route that produces the cleanest outcome, and Bittner does not alter their mechanics. What Bittner alters is the size of the downside if the route is not used, or if it is used and later unwound. Where the alternative to a successful streamlined submission was once a per-account calculation running into seven figures, it is now a per-report calculation. That does not make the streamlined route less attractive. It makes the cost of a mistake in preparing it more measurable.

The non-residency test for a US citizen or lawful permanent resident requires that, in one or more of the three most recent years, the individual had no US abode and was physically outside the United States for at least 330 full days.
Delinquent or amended tax returns are required for each of the most recent three years.
Delinquent FBARs are required for each of the most recent six years.
A certification on Form 14653, signed under penalties of perjury, that the failure to report was due to non-willful conduct, meaning negligence, inadvertence, mistake or a good faith misunderstanding.
For taxpayers meeting the non-residency requirement there is no miscellaneous offshore penalty. The IRS states that qualifying taxpayers will not be subject to failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties.
Eligibility is lost once the IRS has initiated a civil examination of the taxpayer's returns for any taxable year, whether or not the examination relates to foreign accounts.

Note the alignment between the six years of FBARs required by the procedures and the six-year assessment period in section 5321(b). That is not a coincidence, and it means a properly scoped streamlined submission addresses the same window over which the government could otherwise assess. Note also the final bullet. The eligibility gate closes on contact from the IRS, not on discovery of the problem by the taxpayer, which is why the sequencing of a disclosure matters at least as much as its content.

Where the returns are otherwise complete and correct and the only omission is the FBAR itself, a narrower path exists: filing the late reports directly through the BSA E-Filing System and stating the reason for late filing. The IRS position is that if the IRS has not contacted you about the late filing and you are not under investigation, you should file the late FBARs as soon as possible to keep potential penalties to a minimum. That route is a filing mechanic supported by the reasonable cause provision in section 5321(a)(5)(B)(ii); it is not an amnesty, and it should not be treated as one. Which of the two routes fits depends entirely on whether there is unreported income behind the accounts, and that question should be answered before anything is filed rather than after.

Signature or other authority: the investment banker's distinctive exposure

The reporting duty is not limited to accounts you own. It reaches accounts over which you hold signature or other authority, even where you have no beneficial interest whatsoever and never see a penny of the money. For most Americans abroad this adds nothing. For someone working in banking it is frequently the largest single contributor to the account count, and it is the reason a personal balance sheet with six accounts on it can generate a forty-account FBAR schedule.

Employer operating, treasury or funding accounts on which the individual is a named signatory.
Transaction, escrow and completion accounts opened for a specific deal on which the individual has authority for the duration of the mandate.
Accounts held by a service company, personal service vehicle or partnership through which the individual works.
Accounts of a UK subsidiary or branch where the individual holds a directorship carrying banking authority.
Client-facing accounts where authority arises from the individual's role rather than from any ownership.
Accounts where authority has lapsed in practice but has never been formally removed at the bank, which is far more common than people expect.

Bittner is the reason this list is now a documentation problem rather than a penalty problem. Each of these accounts still has to be identified and reported, and getting the schedule wrong is still a compliant-report failure. But the schedule no longer multiplies the non-willful penalty. The right posture is therefore to invest in a genuinely exhaustive account identification exercise, including a written request to current and former employers to confirm every mandate on which you are or have been a signatory, precisely because completing that exercise now costs you nothing in additional non-willful exposure while an incomplete schedule remains a live risk. That was not true before 2023, when every account you found made the arithmetic worse. The incentive has reversed, and very few filers have noticed.

How does the IRS find out about UK accounts?

Through the automatic exchange of information. GOV.UK guidance on automatic exchange of information states that the agreement between the UK and USA requires UK financial institutions to report to HMRC on US customers that hold accounts with them, and HMRC exchanges that data with the United States. This operates independently of anything the taxpayer does. Data on a UK current account, deposit account or investment platform held by a US person is reported by the institution, passed to HMRC and exchanged with the IRS whether or not an FBAR has ever been filed. The practical consequence is that the sequencing point made above is not theoretical: the information reaches the IRS on its own schedule, and the eligibility gate for the streamlined procedures closes on IRS contact.

What should a UK-based filer with missed FBARs do now?

Bittner improves the arithmetic. It does not remove the obligation, it does not shorten the assessment window, and it does not protect anyone whose conduct is characterised as willful. A structured remediation, in this order, does the work.

Establish the report years at issue and which remain within the six-year assessment period under 31 U.S.C. section 5321(b), before looking at accounts at all.
Build a complete account schedule for every one of those years, including every account over which you hold signature or other authority, and including accounts closed mid-period. Request signatory confirmations from current and former employers in writing.
Identify the highest aggregate balance across all reportable accounts in the worst year. That figure sets the administrative ceiling in IRM 4.26.16 and is the number that bounds the realistic worst case.
Determine whether there is unreported income behind any account. This, not the FBAR itself, decides whether the Streamlined Foreign Offshore Procedures or a direct late filing is the correct route.
Assemble the evidence that supports non-willfulness contemporaneously: engagement letters with prior preparers, the questions you were and were not asked, dates of arrival in the UK, and the point at which you learned of the requirement. This is the file that protects you from the willful branch, where the account count still bites.
If penalties were previously assessed and paid on a per-account basis for non-willful violations, review whether a refund position exists and on what timeline, rather than assuming the decision applies itself.
Move before the IRS makes contact. Eligibility for the streamlined procedures is lost once a civil examination is initiated for any taxable year.

One closing observation on how to read Bittner. The decision was 5-4, and the passage that reads penalty statutes strictly against the government commanded only two votes. It is a durable holding on the narrow question it answered and a fragile foundation for anything beyond it. The correct use of Bittner in a live compliance matter is as a ceiling on the non-willful branch, combined with the aggregate cap in the Internal Revenue Manual, and as a reason to put your preparation effort where the exposure actually now sits: on the evidenced case that your failure to file was non-willful, and on an account schedule that is complete to the last dormant deposit account.