Tuncay Saydam

Tuncay (pronounced Toon-jai) was born and raised in Turkey, growing up in poverty and becoming an early pioneer in computer software engineering. In 1980, he was recruited by the University of Delaware and moved there with his family, serving as a professor for 25 years. He and his wife became American citizens. While working at Swiss universities during his sabbaticals, Tuncay also consulted for several companies in Switzerland. Tuncay kept those earnings at a bank there, eventually growing to about $500,000. And when the Swiss bank stopped doing business with American customers, he moved the funds to a Turkish bank, before eventually transferring it to his bank in the U.S. To Tuncay, it was a nest egg—his life savings.

But Tuncay did not know he was violating U.S. law. Federal law requires people who own foreign bank accounts totaling more than $10,000 to file an annual one-page form with the IRS, called the “FBAR.” It’s separate and apart from your obligation to pay income tax; it applies whether or not the foreign account makes any taxable income at all. And the maximum penalties are shocking: either $100,000 or half the balance in the unreported account (whichever is greater) for each unfiled year.

When the government audited Tuncay, it determined that he owed around $29,000 in back taxes, for which it assessed an additional $11,000 in late penalties. But separate from that, it imposed an astounding $437,000 on him simply for having failed to timely file his FBAR forms.

But in fact, the Eighth Amendment’s Excessive Fines Clause guards against precisely this kind of overreach. So Tuncay is teaming up with the Institute for Justice (IJ) to appeal his case and fight for constitutional limits on fines.