For years, one unresolved question quietly controlled whether a non-willful FBAR failure was a painful mistake or a financial catastrophe: when you miss a filing, is the penalty assessed per report you failed to file — or per account that should have been on it?
The difference isn’t academic. Take an ordinary expat with five foreign accounts — checking, savings, a pension, an old account back home, a joint account with a spouse — who didn’t know about the FBAR for six years. Under the per-report reading, that’s six violations: one per missed annual filing. Under the per-account reading, it’s thirty. Same person, same accounts, same honest mistake — a fivefold difference in maximum exposure, produced entirely by how you count.
In 2023, the Supreme Court settled it in Bittner v. United States: for non-willful violations, the penalty applies per report, per year — not per account. One missed annual FBAR is one violation, whether the form would have listed two accounts or twenty.
Why it came out that way
The reporting obligation in the statute is the duty to file a report — a single annual filing covering all of your accounts. The government had been treating each unlisted account as its own violation, which multiplied penalties by however many accounts a person happened to hold. The Court read the violation as the failure to file the report itself. Miss the filing, and you’ve committed one violation for that year — regardless of the account count behind it.
For the people this rule was punishing hardest — long-term expats with ordinary, sprawling financial lives, exactly the multi-account profile described in The Accounts You Forgot Still Count: Aggregation, Dormant Accounts, and Your Non-US Spouse — this was the single most consequential FBAR development in years. Ordinary life abroad accumulates accounts. Pre-Bittner, every one of them was a separate penalty multiplier. Post-Bittner, the multiplier for non-willful failures is just the number of missed years.
What didn’t change
Three boundaries keep this from being better news than it is.
Willful penalties still stack per account. Bittner answered the non-willful counting question only. Cross the willfulness line — which, as Willful vs. Non-Willful: The Two-Tier System Behind Every FBAR Penalty explains, includes recklessness, not just intent — and the penalty structure reverts to per account, per year, at the greater of a six-figure floor or 50% of each balance. The counting relief is exclusive to the honest-mistake tier; the entire incentive structure still pushes everything important onto the willful/non-willful line.
One violation per year still multiplies across years. The current non-willful maximum sits at $16,536 per report. Six missed years can still mean six penalties — close to six figures in maximum exposure for a wholly innocent failure. Bittner shrank the worst case dramatically; it didn’t make non-filing inexpensive.
It’s a ceiling rule, not a forgiveness rule. Nothing in Bittner waives anything. The paths to an actually-small or zero outcome run through reasonable cause and the voluntary catch-up programs — The Three Ways Back: Catch-Up Paths for Missed Foreign Account Filings, Compared — and those still require coming forward before the IRS comes to you.
The wider arc it belongs to
Bittner is one of a string of decisions reining in how FBAR penalties get applied: the Schwarzbaum litigation tested whether stacked willful penalties violate the constitutional bar on excessive fines (The $12 Million Paperwork Penalty: What the Schwarzbaum Case Means for Anyone With Foreign Accounts), and more recent rulings have challenged how penalties are imposed procedurally (Two Court Rulings Just Pulled FBAR Penalties in Opposite Directions). Courts are actively sanding down the edges of the penalty regime.
But notice what every one of those cases has in common: each was fought by someone after enormous penalties were assessed, at litigation cost and over years. The legal trend is genuinely favorable, and it is still a terrible plan. The cheap version of every outcome in this article — The Math Nobody Runs: What Compliance Costs vs. What Non-Compliance Costs runs the numbers — remains the same boring move: report on time, and if you haven’t, use the organized routes to catch up before anyone asks.
This article is general educational information, not tax or legal advice. How penalty rules apply to any particular set of facts is a professional-level question. Before acting on anything here, speak with a qualified cross-border tax professional about your specific circumstances.