Skip to Main Content

Zhanna Ziering Comments on Recent FBAR Penalty Case in Tax Notes

May 19, 2020, Tax Notes

A district court has rejected the premise that foreign bank account reporting penalties are subject to the Eighth Amendment’s excessive fines clause, in one of the strongest rebukes yet in FBAR litigation. 

. . .

“The court’s determination seems to summarily rest on an assumption that the FBAR penalty is essentially a tax penalty and should be treated likewise,” Zhanna Ziering of Caplin & Drysdale said, pointing to the court’s citation of the Bank Secrecy Act’s legislative history to support its remedial finding. “Notably, at [their] inception, the FBAR willful penalties were significantly smaller and thus may have contained more of a remedial purpose. However, the Congress was clear that its impetus for the penalty increase in 2004 was an increase in FBAR compliance and deterrence.” 

Following changes to the statute in 2004, willful FBAR penalties were capped at the greater of $100,000 and 50 percent of the account value. Before that, the penalty was limited to the greater of $25,000 and the account balance at the time of the violation, up to a maximum of $100,000 per violation. 

For the full article, please visit Tax Notes’ website (subscription required).


About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
©2021 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)