In United States v. Rum, 995 F.3d 882 (11th Cir. 4/23/21), CA11 here; TN here, the Eleventh Circuit in a per curiam opinion affirmed the district court’s grant of summary judgment for the Government in an FBAR willful civil penalty collection suit. I wrote on the district court’s grant of summary judgment previously. District Court Confuses Analysis in Approving Magistrate's R&R Imposing FBAR Willful Penalty (Federal Tax Crimes Blog 9/26/19), here.
The Eleventh Circuit opinions lists Rum’s arguments:
(A) that the district court applied an incorrect standard of willfulness (by holding that willfulness as used in 31 U.S.C. § 5321(a)(5)(C) includes a reckless disregard of a known or obvious risk); (B) that the district court erred in concluding that there were no genuine issues of material fact as to whether his conduct rose to required level of willfulness/recklessness; (C) that the district court erred in refusing to recognize that 31 C.F.R. § 1010.820(g)(2) limits the amount of a willful violation to $100,000; (D) that the district court erred when it held that the IRS's factfinding procedures were sufficient and therefore applied the arbitrary and capricious rather than a de novo standard of review with respect to the amount of the penalty; (E) that, even assuming the arbitrary and capricious standard applies, the district court erred in failing to conclude that the IRS factfinding procedures were arbitrary and capricious; and finally, (F) that the district court erred in rejecting Rum's challenge to the additions to the base amount (interest and late fees).
I address here only (A) and (D)-(E).
Standard for FBAR Civil Penalty Willfulness
The Court adopted (Slip Op. 12-16) the consensus holdings that “willfully” as the element of the civil penalty includes recklessness. I don’t think I need to say more about the holding here because it just rehashes what courts have held before. The importance of the holding is that it adds to a number of similar holdings, so that it seems that there is no real counterweight to the holding. It states the consensus.
Rum’s APA Claims
