Do Civil Penalties Punish? The FBAR Penalty and the Case for an Emboldened Excessive Fines Clause

Authors

Scott Oatkin, Benjamin N. Cardozo School of Law

Abstract

The Report of Foreign Bank and Financial Accounts (FBAR) regime authorizes the IRS to impose severe penalties—up to the greater of $100,000 or fifty percent of the account balance—for failure to report foreign bank accounts exceeding $10,000. While the Eighth Amendment protects Americans from “excessive fines,” circuit courts are split on whether the FBAR penalty constitutes a fine and is subject to constitutional scrutiny. Some courts have found that the FBAR penalty is wholly remedial and beyond the reach of the Excessive Fines Clause, but this Note argues that such an interpretation is inconsistent with the history and case law of the provision. Furthermore, this Note critiques the inconsistent application of the Supreme Court’s test for identifying punitive sanctions by lower courts and contends that the current presumption in favor of remedial intent unduly limits judicial review. It proposes reversing that presumption, requiring the government to affirmatively demonstrate a remedial purpose before exempting penalties from Eighth Amendment safeguards.

Disciplines

Constitutional Law | Law | Tax Law

Recommended Citation

Scott Oatkin, Do Civil Penalties Punish? The FBAR Penalty and the Case for an Emboldened Excessive Fines Clause, 47 Cardozo L. Rev. 423 (2025).
Available at: https://larc.cardozo.yu.edu/clr/vol47/iss1/10