The district court summarizes its already short opinion as follows
1) The United States has demonstrated that the IRS's decision to assess Mr. Moore FBAR penalties of $10,000 for each year from 2005 through 2008 was not arbitrary, not capricious, and not an abuse of its discretion.
2) The IRS's conduct in assessing those FBAR penalties, by contrast, was in several respects arbitrary and capricious. In particular, the IRS disclosed no adequate basis for its decision to assess the penalties until this litigation forced its hand. Even after this litigation began, the IRS refused to disclose the evidence on which it now relies to demonstrate the basis for its decision to impose those penalties. With respect to the 2005 penalty, the IRS broke its own promise not to impose a penalty until Mr. Moore had an opportunity to respond to its "proposed" assessment.
3) In light of these rulings, the Government is entitled to judgment for $40,000, although that amount will be offset by the more than $10,000 that Mr. Moore has already paid. In light of the arbitrary and capricious conduct described above, the court rules that any interest, late fee, or other supplemental assessment that the IRS or another agency of the United States has attempted to tack on to Mr. Moore's FBAR penalties is void. The United States shall treat the FBAR penalties as if they were first assessed on the date of this order.I find the most interesting part of the short explanation of the conclusions the following which relates to the IRS assessment of the 2005 penalty after indicating to Mr. Moore that he could appeal first. Here is what the court said:
As to its bizarre conduct in assessing the 2005 penalty, the IRS explains that it has an internal policy to assess FBAR penalties at least 180 days before the expiration of the statute of limitations for doing so. That policy is well within its discretion. What is not within its discretion is its decision to offer Mr. Moore the opportunity to contest the 2005 FBAR penalty before its assessment, and then to impose the penalty before the deadline the IRS imposed. The IRS offers no explanation for why it allowed rote application of its internal policies to trump the individual assurances it made to Mr. Moore.
In light of the court's conclusion that the amount of the penalty the IRS imposed was appropriate, there are two apparent harms arising from its arbitrary and capricious conduct in imposing that penalty. First, Mr. Moore was given the unappealing choice to either accept the IRS's unexplained imposition of a $40,000 penalty or to file suit. The court assumes that Mr. Moore's choice to sue cost him a substantial sum. Second, the IRS has assessed interest and other penalties on top of the FBAR penalties. The court expresses no opinion at this time on whether the first harm can be remedied. The court remedies the second harm by preventing the IRS from profiting by imposing penalties without explaining them. The court voids the IRS's assessment of interest and other charges on top of its previously unexplained penalties.In regular Title 26 cases which go to appeals, the IRS usually requires substantial time on the statute, but it has been my experience that that is always explained to the taxpayer so that he understands that there will be an assessment. The way the taxpayer avoids the assessment before the appeal is to give a sufficient extension on the statute to permit the appeal to not interfere with the right to assess. Apparently, that was not explained to the taxpayer or his representative.