Friday, October 27, 2017

Ninth Circuit Summarily Rejects Arguments Against FBAR Willful Penalty (10/27/17)

In United States v. Bussell,  (9th Cir. No. 16-55272 10/25/17), unpublished opinion, here, the background was
In June 2013, the IRS assessed an approximately $1.2 million penalty against Bussell for failing to disclose her financial interests in an overseas account on her 2006 tax return, which she was required to report in 2007. Bussell did not pay the penalty, and the government filed suit. Bussell previously had been criminally charged for concealing financial assets in 2002. On appeal, Bussell admits that she willfully failed to disclose her financial interests in her overseas account on her 2006 tax return, but she raises several arguments seeking reversal of the district court’s summary judgment ruling.
That's quite a succinct statement pointing to the outcome.  Note that the admission Bussell made, as described by the Court, was that she willfully failed to disclose her financial interests on her 2006 tax return.  The court just leaves it at that without saying anything about willfulness with respect to the FBAR obligation that was the basis of the penalty in issue on the appeal.  (Perhaps that type of lack of focus is why the opinion is designated as not for publication.)

Most of the arguments Bussell presented on appeal, as presented in the opinion, seem to have been light on reasoning and the Court in the nonpublished opinion treated them that way.  Probably the only holding worthy of specific comment here is the Excessive Fines holding.  The Court succinctly dismissed this claim:
Bussell relies on Bajakajian, for her position that the government’s assessment against her is “grossly disproportional” to the gravity of her defense, and therefore violates the Excessive Fines Clause. However, the assessment against her is not grossly disproportional to the harm she caused because Bussell  defrauded the government and reduced public revenues. See United States v. Mackby, 339 F.3d 1013, 1017–18 (9th Cir. 2003). Therefore, Bussell has failed to carry her burden to establish that the penalty is grossly disproportional to her offense.
Because the opinion is not published and the arguments, as described by the Court, seem insubstantial, I have not bothered to dig into the briefs.  If anyone sees something in the case or briefs worthy of comment, please either email me or post a comment.

A News article on the opinion (with some discussion of the oral argument, the prior criminal case involving bankruptcy fraud, and even a photo Letantia Bussell, identified as a Medical Doctor) Ninth Circuit Affirms $1.1 Million Civil Tax Penalty (Metropolitan News-Enterprise 10/27/17), here.

No comments:

Post a Comment

Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.