Court rejects Eighth Amendment challenge to FBAR penalty on Turkish bank accounts

United States v. Tuncay Saydam, No. 4:22-cv-07371 (United States District Court for the Northern District of California, Nov. 18, 2025).

A federal court held that a $437,564 FBAR penalty for willful non-reporting of foreign accounts is a “fine” under the Eighth Amendment but is not excessive in light of the taxpayer’s culpability, tax loss, and the statutory and guideline frameworks.

Holding

The court held that civil FBAR penalties under 31 U.S.C. §5321(a)(5) function as “fines” for Eighth Amendment purposes because they have a deterrent and punitive purpose, not a purely remedial one.

Applying the proportionality test from Bajakajian and Ninth Circuit precedent, the court concluded that the $437,564 FBAR penalty imposed on Tuncay Saydam was not grossly disproportionate to his willful failure to file FBARs and the resulting $29,006 tax loss.

The motion to reduce the penalty under the Excessive Fines Clause was denied.

Why It Matters

• Confirms that, at least in this district, FBAR penalties are subject to the Excessive Fines Clause but can still survive proportionality review.

• Provides a detailed blueprint for how courts may …