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K&F Files Amicus Brief Asking SCOTUS To Review Key FBAR Penalties Case

Kostelanetz & Fink served as counsel of record on behalf of the American College of Tax Counsel, which filed an amicus brief in the case of Alexandru Bittner v. United States on April 1, 2022. The College’s brief argued in support of the petition for a writ of certiorari seeking a reversal of the Fifth Circuit’s decision to apply multiple civil penalties per year for the non-willful failure to timely file accurate Reports of Foreign Bank and Financial Accounts (“FBARs”).

A Tax Notes article quoted the thrust of the brief’s argument, saying, “The circuit split [between the Fifth and Ninth Circuits] and disagreements among the district courts are not surprising given the inconsistent administrative guidance over the past decade. We have no reason to believe that additional circuit court consideration will clarify the legal issue in any meaningful way. If left unresolved, the mere passage of time will not bridge this gap.”

The brief was filed by K&F attorneys Caroline D. Ciraolo, Megan L. Brackney, Caroline Rule, and Garrett L. Brodeur, who represent the College’s governing Board of Regents in the matter.

In the College’s press release, Ms. Ciraolo is quoted as saying, “U.S. persons are entitled to clear, unambiguous, and reasonable interpretations of penalty statutes. The inconsistent administrative guidance and the irreconcilable holdings of the Ninth and Fifth Circuits are resulting in drastically different penalties, depending only on the jurisdiction in which the filers reside. There is a clear need for the Court to step into the fray.”

Law360 also published a story on the amicus brief. Ms. Ciraolo commented that the College is “hopeful that the Court will grant the petition.”

“As we noted in our brief, U.S. persons are entitled to clear, unambiguous and reasonable interpretations of penalty statutes,” Ms. Ciraolo told Law360.

Unlike the Fifth Circuit decision in Bittner v. U.S., the Ninth Circuit Court of Appeals in March 2021 ruled in favor of a taxpayer subject to a non-willful civil penalty for failure to timely file an accurate Foreign Bank Account Report (FBAR), agreeing with the position advanced by the ACTC, in an amicus brief written by Ciraolo and Rule. That case is United States of America v. Jane Boyd.