UNITED STATES OF AMERICA v. ALEXANDRU BITTNER
Civil Action No. 4:19-cv-415
United States District Court, EASTERN DISTRICT OF TEXAS, SHERMAN DIVISION
June 29, 2020
Judge Mazzant
Pending before the Court are Defendant Alexandru Bittner’s Motion for Partial Summary Judgment (Dkt. #28) and United States’ Motion for Partial Summary Judgment (Dkt. #29). After consideration, the Court is of the opinion that Defendant Alexandru Bittner’s Motion for Partial Summary Judgment (Dkt. #28) should be GRANTED and United States’ Motion for Partial Summary Judgment (Dkt. #29) should be GRANTED in part and DENIED in part.
BACKGROUND
I. Factual Summary
The dispute in this case concerns the proper interpretation of the civil penalty provided by
Defendant Alexandru Bittner is a Romanian–American dual citizen. Before emigrating to the United States, Mr. Bittner earned a Master of Science in Engineering from Politechnica University of Bucharest. In December 1982, Mr. Bittner moved to the United States, where he worked as a dishwasher and plumber and earned his master plumbing certificate in California. Mr. Bittner became a naturalized American citizen in 1987 or 1988.
From 1990 to 2011, Mr. Bittner generated over $70 million in total income through his various foreign businesses and investment ventures. During those years, Mr. Bittner kept at least some of that income in a number of foreign financial accounts. From 1996–2011, the aggregate high balance in those foreign financial accounts exceeded $10,000. This is important because United States citizens who maintain an aggregate high balance in a foreign financial account or accounts exceeding $10,000 in any given year аre required by federal law to report that financial interest to the Treasury Department. The history and framework of that law are central to this case and are worth discussing at length.
Congress enacted the Bank Secrecy Act of 1970 (“BSA”), codified at
The stated purpose of the BSA, as amended in 2004, is “to require certain reports or records whеre they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence activities, including analysis, to protect against international terrorism.”
The first portion of the BSA relevant to this dispute is § 5314, which provides that:
Considering the need to avoid impeding or controlling the export or import of monetary instruments and the need to avoid burdening unreasonably a person making a transaction with a foreign financial agency, the Secretary of the Treasury shall require a resident or citizen of the United States or a person in, and doing business in, the United States, to keep records, file reports, or keep records and file reports, when the resident, citizen, or person makes a transaction or maintains a relation for any person with a foreign financial agency.
- the identity and address of participants in a transaction or relationship.
- the legal capacity in which a participant is acting.
- the identity of real parties in interest.
- a description of the transaction.
Each United States person having a financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country shall report such relationship to the Commissioner of Internal Revenue for each year in which such relationship exists and shall provide such information as shall be specified in a reporting form prescribed under 31 U.S.C. 5314 to be filed by such persons. The form prescribed under section 5314 is the Report of Foreign Bank and Financial Accounts (TD–F 90–22.1) [(“FBAR”)], or any successor form.
Reports required to be filed by § 1010.350 shall be filed with [The Financial Crimes Enforcement Network (“FinCEN”)] on or before June 30 of each calendar year with respect to foreign financial accounts exceeding $10,000 maintained during the previous calendar year.
Finally, § 5321 of the BSA authorizes the Secretary of the Treasury to penalize United States residents or citizens who violate the regulations implementing
(5) Foreign financial agency transaction violation.—
(A)Penalty authorized.—The Secretary of the Treasury may impose a civil money penalty on any person who violates, or causes any violation of, any provision of section 5314.
(B) Amount of penalty.—
(i) In general.—Except as provided in subparagraph (C), the amount of any civil penalty imposed under subparagraph (A) shall not exceed $10,000.
(ii) Reasonable cause exception.—No penalty shall be imposed under subparagraph (A) with respect to any violation if—
(I) such violation was due to reasonable cause, and
(II)the amount of the transaction or the balance in the account at the time of the transaction was properly reported.
(C)Willful violations.—In the case of any person willfully violating, or willfully causing any violation of, any provision of section 5314—
(i) the maximum penalty under subparagraph (B)(i) shall be increased to the greater of—
(I) $100,000, or
(II)50 percent of the amount determined under subparagraph (D), and
(ii) subparagraph (B)(ii) shall not apply.
(D)Amount.—The amount determined under this subparagraph is—
(i) in the case of a violation involving a transaction, the amount of the transaction, or
(ii) in the case of a violation involving a failure to report the existence of an account or any identifying information required to be provided with respect to an account, the balance in the account at the time of the violation.
| Year | Total Number of Mr. Bittner’s Accounts Penalized | Amount of FBAR Penalties Sought by Summary Judgment |
|---|---|---|
| 2007 | 61 | $610,000 |
| 2008 | 51 | $510,000 |
| 2009 | 53 | $530,000 |
| 2010 | 53 | $530,000 |
| 2011 | 54 | $540,000 |
| Total | 272 | $2,720,000 |
(Dkt. #29 at p. 6).3 The Government filed this action to reduce its penalty assessment to judgment, seeking a total of $2,720,000 in penalties against Mr. Bittner. The Government’s motion for partial summary judgment, however, seeks only $1,770,000 in penalties, computed on the basis of the number of foreign accounts Mr. Bittner admitted to maintaining from 2007–2010. The Government seeks partial summary judgment on the following (Dkt. #29 at p. 7):
| Year | Total Number of Mr. Bittner’s Accounts Penalized | Amount of FBAR Penalties Sought by Summary Judgment |
|---|---|---|
| 2007 | 51 | $510,000 |
| 2008 | 43 | $430,000 |
| 2009 | 42 | $420,000 |
| 2010 | 41 | $410,000 |
| Total | 177 | $1,770,000 |
Mr. Bittner disputes the amount of the civil penalties assessed against him for his non-willful failure to file FBARs for 2007–2010. Specifically, he argues that the non-willful civil
II. Procedural History
On March 11, 2020, Mr. Bittner filed a motion for partial summary judgment (Dkt. #28). On April 2, 2020, the Government filed a response (Dkt. #42). On April 24, 2020, Mr. Bittner filed a reply (Dkt. #53).
On March 12, 2020, the Government filed a motion for partial summary judgment (Dkt. #29). On April 18, 2020, Mr. Bittner filed a response (Dkt. #47). On May 4, 2020, the Government filed a reply (Dkt. #56). On May 11, 2020, Mr. Bittner filed a sur-reply (Dkt. #61).
On March 18, 2020, the Patels filed a motion for leave to file an amicus brief on behalf of Mr. Bittner’s motion for partial summary judgment and for leave to exceed the page limits (Dkt. #32). Contemporaneously with that motion, the Patels filed their amicus brief (Dkt. #33). On March 27, 2020, the Patels filed an amended amicus brief (Dkt. #34). On March 30, 2020, the Government filed a response, opposing the Patel’s motion for leave to file an amicus brief (Dkt. #36). On March 31, 2020, Mr. Bittner filed a response opposing the Patel’s motion for leave to file an amicus brief (Dkt. #38). On May 11, 2020, the Court granted the Patel’s motion to file
On May 4, 2020, the Patels filed a reply brief in support of Mr. Bittner’s motion for partial summary judgment (Dkt. #58). On May 18, 2020, the Government filed a sur-reply (Dkt. #62).
On July 4, 2020, the Court held a hearing on the United States’ and Mr. Bittner’s cross motions for partial summary judgment.
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). Summary judgment is proper under
The party seeking summary judgment bears the initial burden of informing the court of its motion and identifying “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of material fact.
Once the movant has carried its burden, the nonmovant must “respond to the motion for summary judgment by setting forth particular facts indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248–49). A nonmovant must present affirmative evidence to defeat a properly supported motion for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this burden. Rather, the Court requires “significant probative evidence” from the nonmovant to dismiss a request for summary judgment. In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1982) (quoting Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 114 (5th Cir. 1978)). The Court must consider all of the evidence but “refrain from making any credibility determinations or weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
ANALYSIS
This is a matter of first impression in the Fifth Circuit and presents the Court with the task of interpreting the non-willful civil penalty provided by
First, the Court examines the text of
Second, the Court looks at the parties’ arguments respecting the rule of lenity. While the Court is apprehensive about whether the rule of lenity applies here, it concludes that, to the extent the rule of lenity does apply, it would tend to support Mr. Bittner’s proposed interpretation of
Third, the Court examines the most factually analogous case to the present action—United States v. Boyd—and respectfully declines to follow its reasoning and outcome.
Fourth, the Court rejects as moot Mr. Bittner’s Eighth Amendment challenge.
Fifth, and finally, the Court concludes that there is no genuine issue of material fact as to whether the non-willful civil penalties assessed against Mr. Bittner are excused under the reasonable cause exception and enters judgment as a matter of law in the Government’s favor.
I. 31 U.S.C. § 5321(a)(5)(A) and (B)(i)
In cases involving construction of a statute, the Court begins its analysis with the text itself. Watt v. Alaska, 451 U.S. 259, 265 (1981). That said, when interpreting statutory text, the Court does not read statutory provisions in isolation; rather, it is a “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Util. Air Regulatory Grp. v. E.P.A., 573 U.S. 302, 320 (2014). The Court will therefore analyze the statutory and regulatory framework as a whole and then examine the meaning of the statutory provisions “with a view to their place” in that framework. See id.
As the Supreme Court recognized in Shultz, “the [BSA’s] civil and criminal penalties attach only upon violation of regulations promulgated by the Secretary; if the Secretary were to do nothing, the Act itself would impose no penalties on anyone.” Shultz, 416 U.S. at 26. It is therefore violations of the Secretary of the Treasury’s implementing regulations to which
Up to this point, the parties agree. They disagree, however, about whether an FBAR reporting deficiency constitutes a single violation, or whether each foreign financial account not properly or timely reported on an FBAR constitutes a separate reporting violation. In other words, they disagree about whether the number of “violations” that occur when an account holder commits an FBAR reporting deficiency varies with the number of accounts maintained by that account holder that were not properly reported. To resolve this disagreement, the Court looks to
The willfulness provision provides a penalty for willful FBAR violations in an amount equal to the greater of $100,000 or 50 percent of either “the amount of the transaction” or “the balance in the account at the time of the violation.”
The same goes for the reasonable cause exception. Under the reasonable cause exception—
That the penalty for a “violation” within the meaning of
The instructions on the FBAR form make clear that no FBAR is required if an individual’s aggregate foreign account balance does not exceed $10,000. (Dkt. #28, Exhibit 6) (“No report is required if the aggregate value of the accounts did not exceed $10,000.”). Regardless of whether an individual maintains 5, 25, or 500 accounts, the aggregate balance must exceed $10,000 to
The Government advances two primary arguments for why non-willful FBAR violations relate to specific financial accounts rather than to FBAR forms. First, the Government argues that, because the reasonable cause exception forgives the penalty for a non-willful FBAR violation and references the “balance in the account,” the non-willful violation itself must relate to each account. That is, if the exception applies on an account-by-account basis, then the violation that the exception forgives must also apply on an account-by-account basis. While the Court recоgnizes this logic, it is unpersuaded. The Government has not provided any good reason for why the exception to a rule should somehow inform the calculation of the penalty for a violation of that rule. Here, Congress assesses a maximum $10,000 fine for a non-willful violation—which is an account holder’s non-willful failure to submit her annual FBAR—while also providing a statutorily permissible excuse for noncompliance—the reasonable cause exception—that is completely independent from the violation itself. It does not follow that the penalty is calculated on an account-by-account basis just because Congress provided that a taxpayer’s accurate reporting of the balance in her account(s) is a possible ground for excusing that penalty. Congress can forgive non-willful FBAR violations any way it likes—even in ways that have nothing to do with the underlying violation. And why Congress elected to forgive non-willful FBAR violations in the particular way it did is not the issue before this Court; any attempt by this Court to comment
The Government also argues that, because the penalty for willful violations simply modifies the penalty for non-willful violations, the underlying violation must also be the same. And because “the willful variant of the penalty is assessed with reference to each account,” the non-willful variant of the penalty should also be understood to relate to each account (Dkt. #29). The Court acknowledges that the willful and non-willful variants of the penalty are connected, but the problem with this argument is it overlooks the fact that Congress may have had perfectly good reasons for choosing to compute the penalty for willful violations different from the penalty for non-willful violations. Indeed, willful violators pose a fundamentally different obstacle to the Government’s ability to monitor foreign financial transactions than non-willful violators do, аnd perhaps Congress drafted the provisions with different language to reflect those differences.5
Ultimately, the most the Court can safely do is rely on the plain language that appears in the statute; because the penalty for willful violations includes explicit reference to “the existence of an account” and “the balance in the account” while the penalty for non-willful violations does not, the Court can infer that Congress intended the penalty for willful violations to relate to specific accounts and the penalty for non-willful violations not to.
Another virtue of adopting Mr. Bittner’s proposed interpretation of
The natural retort to this hypothetical, and one the Government makes in its motion, is to argue that it would be absurd to treat someone who fails to list just onе or two foreign accounts per year the same as someone who fails to list twenty. The Government reasons that “hidden foreign accounts increase[] the costs of an investigation and the potential damage to the government in lost tax revenue. Thus, making the penalty vary by the number of undisclosed accounts satisfies the remedial purpose” (Dkt. #29).
While the Government’s concern is legitimate, it is overstated. In the first place, the Court does not see any connection between the number of foreign financial accounts unreported and lost tax revenue. Whether an individual holds $1 million in taxable income in one foreign account or ten foreign accounts makes no difference—as far as this Court is aware—as to how much she owes
Second, while the Court recognizes that there may be higher costs associated with investigating twenty accounts as compared to investigating two, the Cоurt is not persuaded that this carries the day for the Government. For starters, while investigation costs are a significant concern, that concern is simply not strong enough to compel the Court to read into
Now consider a second example, which Mr. Bittner brought to the Court’s attention in his motion. Imagine two individuals, each with interests in twenty (20) foreign financial accounts. Suppose the first individual maintained an aggregate foreign financial account balance of $180,000
The Court is persuaded that non-willful FBAR reporting deficiencies constitute a single violation within the meaning of
II. The Rule of Lenity
Mr. Bittner also argues that the rule of lenity supports his position. Specifically, he argues that, because the BSA imposes penalties, the rule of lenity dictates that any ambiguities in the statute should be resolved in his favor. The Government responds by arguing that the rule of lenity is inapplicable here because, after careful review of the statute’s text and structure, there is no ambiguity.
The rule of lenity is a principle of statutory construction that “applies primarily to the interpretation of criminal statutes.” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 16 (2011).
At the outset, the Court is dubious as to whether the non-willful civil penalty in the BSA is even the kind of statutory provision to which the rule of lenity applies. To be sure, the BSA does provide criminal penalties. See
Here, the Court can do much better than “simply guess as to what Congress intended.” See Barber, 560 U.S. at 486–88. As discussed, supra, the text, structure, and purpose of the statute unambiguously point to the conclusion that the non-willful civil penalty applies per FBAR reporting violation rather than per account. So, the best the Government could do here is advance a reasonable alternative interpretation of the statute, in which case the rule of lenity would counsel in favor of adopting Mr. Bittner’s position. Accordingly, to the extent the rule of lenity is applicable in this context, it supports Mr. Bittner’s proposed interpretation of the non-willful civil penalty.
One final note on this point. The Court is aware of cases that, without referencing explicitly the rule of lenity, stand for thе general proposition that tax statutes imposing penalties are to be strictly construed. For example, in Commissioner v. Acker, the Supreme Court stated: “We are here concerned with a taxing Act which imposes a penalty. The law is settled that ‘penal statutes are to be construed strictly,’ and that one ‘is not to be subjected to a penalty unless the words of
This principle is not dispositive on the issue here; the Court is of the opinion that the statute is unambiguous and therefore need not appeal either to the rule of lenity or to the general notion that tax penalties are to be strictly construed in order to reach its conclusion. But if such a principle were at play here, it would further support the Court’s conclusion that
III. United States v. Boyd
The Government’s last remaining hope is for the Court to find persuasive the reasoning and outcome in United States v. Boyd, which presents the most analogous case to the present action. No. CV 18-803-MWF, 2019 WL 1976472 (C.D. Cal. Apr. 23, 2019).8 It does not. But because it is the case that the parties brief in the most detail, the Court will examine it thoroughly.
In Boyd, the IRS assessed the defendant thirteen (13) separate FBAR penalties after it determined that she had non-willfully failed to report her financial interest in fourteen (14) foreign
The Government filed suit to reduce its penalty assessment to judgment, and the defendant disputed the amount of non-willful civil penalties assessed against her. The issue there was the same as it is here: Does the non-willful FBAR penalty relate to each annual FBAR not properly or timely filed, or each foreign financial account maintained but not properly or timely reported on that FBAR? Much like here, the Government argued thаt per-account FBAR penalties were proper and, for support, pointed to the language of the reasonable cause exception and the fact that “Congress selected the singular forms of ‘account’ and ‘balance,’ indicating that a violation relates to one, and only one account.” Id. at *4. The defendant argued that, had Congress intended the non-willful civil penalty to relate to each foreign financial account, it would have specified as much in the statute’s text.
The Boyd court, without any explanation, held that “given the relevant language the Government highlights above, the Court determines that the Government has advanced the more reasonable explanation.” Id. The Boyd court did not elaborate on why the Government’s interpretation was the more reasonable one, which is quite unfortunate, as this Court is evaluating the same arguments here as the parties made in Boyd.
It goes without saying that the outcome in Boyd is not binding precedent on this Court. But beyond that, the Court respectfully disagrees with the reasoning and outcome in Boyd. As the Court has already discussed, supra, the language of the reasonable cause exception is not a sound basis for reading a word into the penalty provision that is not there. Congress knew how to use the word “account,” as it did so elsewhere in the statute. Its inclusion in certain provisions and its
The Court is weary of creating conflicts with its sister district courts—even those in other circuits. It is particularly hesitant to do so when interpreting a federal statute, which theoretically should have uniform meaning nationwide. But the Boyd court’s analysis fails to provide adequate guidance as to how it reached the conclusion it did. After a careful analysis of the statute’s text and purpose, the Court is left with no choice but to respectfully disagree with the outcome in Boyd and reach the opposite conclusion.9
The Government further claims that, in addition to Boyd, there are other cases that have held that
To conclude, Congress used the word “account” or “accounts” over one hundred (100) times throughout the BSA. But remarkably, it omitted any mention of “account” or “accounts” in
IV. Eighth Amendment
Mr. Bittner argues that the penalties assessed him by the IRS—totaling just shy of $3 million for his numerous non-willful FBAR violations—constitute an “excessive fine” in violation of the Eighth Amendment to the United States Constitution (Dkt. #47 at p. 16).
The Court’s understanding of Mr. Bittner’s argument on Eighth Amendment grounds is that it is premised on the Court finding the Government’s $3 million penalty assessment proper. In view of the Court’s interpretation of the non-willful FBAR penalty, however, the Court need not address the merits of Mr. Bittner’s Eighth Amendment argument, as it is now moot.
V. Reasonable cause
Finally, the Government argues in its motion that Mr. Bittner’s non-willful FBAR violations were not due to reasonable cause and seeks summary judgment as to the same. In his cross motion, Mr. Bittner claims—albeit in a one-sentence footnote—that there is a genuine issue of material fact as to whether he qualifies for the statutory exemption from the non-willful FBAR penalty.
Neither the BSA nor the Secretary of the Treasury’s implementing regulations provide a definition of “reasonable cause” within the meaning of
In Congdon v. United States, the Court interpreted a reasonable cause exception that was similar to the reasonable cause exception in
Reasonable cause is based on all the facts and circumstances in each situation and allows the IRS to provide relief from a penalty that would otherwise be assessed. Reasonable cause relief is generally granted when the taxpayer exercises ordinary business care and prudence in determining their tax obligations but nevertheless is unable to comply with those obligations.
Congdon v. United States, No. 4:09-CV-289, 2011 WL 3880524, at *2–3 (E.D. Tex. Aug. 11, 2011), report and recommendation adopted, No. 4:09-CV-289, 2011 WL 3880564 (E.D. Tex. Aug. 31, 2011) (citing I.R.M. 20.1.1.3.1(1)) (emphasis added).10 “The elements that must be present to constitute reasonable cause are a question of law, but whether those elements are present in a given situatiоn is a question of fact.” Id. (citing N.Y. Guangdong Fin., Inc., v. Comm’r, 588 F.3d 889, 896 (5th Cir. 2009). Thus, “to demonstrate reasonable cause, [Mr. Bittner] must show that he exercised ordinary business care and prudence.” Id.; United States v. Boyle, 469 U.S. 241, 249 n.8 (1985).
In his pleadings and motions, Mr. Bittner’s main argument for why he qualifies under the reasonable cause exception essentially boils down to: “I didn’t know I had to file an FBAR.” Taken alone, however, this argument fails on its face. As a general rule, ignorance of the law is no excuse. United States v. Int’l Minerals & Chem. Corp., 402 U.S. 558, 562 (1971). Thus, Mr. Bittner does not qualify automatically for the reasonable cause safe harbor merely by claiming that
Mr. Bittner presses on, however, arguing in his sur-reply that other factors made his non-willful FBAR violations reasonable. He claims that because he was educated outside of the United States; had no instruction or education in accounting, tax law, or finances; had no close contact with the United States during the relevant period; and took prompt steps to correct his mistake after learning of his compliance failure, there is a genuine issue of material fact as to the applicability of the reasonable cause exception (Dkt. #61). For support, he points to this Court’s decision in Congdon. There, the Court stated the following:
Ignorance of the law, in and of itself, does not constitute reasonable cause. However, reasonable cause may be established if the taxpayer shows ignorance of the law in conjunction with other facts and circumstances. Some factors to be considered include the following: the taxpayer’s education, if the taxpayer has been previously subject to the tax, if the taxpayer has been penalized before, if there were recent changes in the tax forms or law which a taxpayer could not reasonably be expected to know, and the level of complexity of a tax or compliance issue. Generally, the most important factor in determining whether the taxpayer has reasonable cause and aсted in good faith is the extent of the taxpayer’s effort to report the proper tax liability.
Congdon, 2011 WL 3880524, at *3 (internal citations omitted).
Mr. Bittner’s reliance on Congdon is misplaced; the factual circumstances in Congdon are distinguishable from those here. In Congdon, the Court concluded that there was a “genuine dispute regarding whether Plaintiff acted with ordinary business care and prudence” based on the plaintiff having argued that he “spent a reasonable time and effort preparing Form 5471, [] included all income and expenses of the foreign corporation on his tax return (Form 1040), [] paid the correct and appropriate tax, and [] spent over 200 hours each year collecting information.” Id. In other words, there was a genuine dispute as to whether the plaintiff had acted in good faith by making an effort to report his proper tax liability. Here, there is no dispute as to whether Mr. Bittner made
Mr. Bittnеr then argues that his FBAR violations are excused under the reasonable cause exception because, after returning to the United States, he sought the advice of a CPA—Mr. Beckley—through whom he learned about his FBAR obligations and attempted to remedy his past violations. But that was not until 2012—sixteen (16) years after he was first required to file an FBAR. It would be one thing if Mr. Bittner sought the advice of a CPA at the outset and reasonably relied on the CPA’s advice, even if that advice later turned out to be misguided. But that is not what happened. Mr. Bittner “has not shown that [he] took any steps to learn whether [he] was required to report [his] foreign financial accounts.” See Ott, 2019 WL 3714491, at *2. And he cannot now, sixteen (16) years later, argue that his failure to do so was somehow reasonable.
And in any event, “reliance on . . . the advice of a professional tax advisor or an appraiser does not necessarily demonstrate reasonable cause and good faith”; other outstanding circumstances are required to makе a showing of reasonable reliance and good faith. Id. (quoting Jarnagin, 134 Fed. Cl. at 376). As discussed supra, Mr. Bittner did not make such a showing.11
To be sure, the Court in Congdon also considered it significant that the plaintiff “had little to no instruction in the area of accounting, tax law, or finances.” Congdon, 2011 WL 3880524, at *3. And apparently neither did Mr. Bittner. But Mr. Bittner was undoubtedly a sophisticated business professional, as demonstrated by his business and investment savvy. Moreover, Mr.
CONCLUSION
For the foregoing reasons, it is hereby ORDERED that Defendant Alexandru Bittner’s Motion for Partial Summary Judgment (Dkt. #28) is GRANTED.
It is further ORDERED that United States’ Motion for Partial Summary Judgment (Dkt. #29) is GRANTED in part and DENIED in part. It is GRANTED only as to the Government’s argument that Mr. Bittner’s non-willful FBAR violations were not due to reasonable cause. All other relief sought by the Government in its motion for partial summary judgment is DENIED.
SIGNED this 29th day of June, 2020.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
Notes
Id. Even after assuming arguendo that the rule of lenity did apply, the Boyd court still adopted the Government’s interpretation ofBut that does not decide the issue. Even if a rule of lenity applies, that only dictates that the Court should choose the more lenient of two reasonable interpretations. In light of the prominence of “transactions” and “accounts” in the language of section 5321, the Court determines that the statute contemplates that the relationship with each foreign financial account constitutes the non-willful FBAR violation.