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Abstract: 

In recent cases arising out of the U.S. government’s continuing crackdown on tax evasion by U.S. taxpayers using offshore bank accounts, federal courts have analyzed whether the “required records doctrine” applies to foreign bank account records. The doctrine holds that the Fifth Amendment privilege against self-incrimination does not apply to records required to be maintained as a result of an individual’s voluntary participation in a regulated activity, and until recently no court had ever held that it applied to records of foreign bank accounts required to be maintained by U.S. taxpayers under the Bank Secrecy Act. But the government has now successfully convinced one federal appellate court that the doctrine does so apply. This decision, if followed by other courts, represents a significant limitation of Fifth Amendment rights. While a lower court has recently reached the opposite conclusion, the Justice Department has appealed that ruling. These conflicting decisions highlight the controversy surrounding application of the required records doctrine and potentially set the stage for the U.S. Supreme Court to review this important area of law.

Keywords: required records doctrine; Fifth Amendment; Bank Secrecy Act; foreign bank and financial accounts; FBAR; In re Grand Jury Investigation M.H.; In re Grand Jury Subpoena

Affiliations:  1: Blank Rome LLP; 2: Blank Rome LLP.