The US Supreme Court agreed to decide how steep the penalties are for people who fail to file required reports with the federal government listing their foreign bank accounts.

The justices said they will hear arguments from Alexandru Bittner, a businessman who was assessed a $2.72 million penalty for not filing timely reports for five years when he was living in Romania. Bittner contends the maximum fine under federal law is $50,000.

The fight centers on the Bank Secrecy Act, a law designed to combat tax evasion and money laundering by requiring US citizens and residents to report on their foreign holdings. For unintentional violations, the law authorizes penalties of as much as $10,000.

The Internal Revenue Service concluded that Bittner violated the law 272 times, once for each account that was not reported in each of those five years. Bittner says he violated the law at most five times, once for each annual report he failed to file.

Bittner, who is a dual US-Romanian citizen, was required to file a form known an FBAR during the 2007-2011 period at issue in the case.

The New Orleans-based 5th US Circuit Court of Appeals sided with the government, creating a split on the issue among federal appeals courts. The divide prompted the Justice Department to join Bittner in asking the Supreme Court to step in.

The Biden administration argued in court papers that Bittner’s reading would undermine the law by “significantly curtailing the deterrent effect of the penalties.”

But the US Chamber of Commerce urged the court to side with Bittner, saying the 5th Circuit decision “permits draconian penalties Congress never intended.”

The case is Bittner v. United States, 21-1195.

This article was provided by Bloomberg News.