Bedrosian v. US — tax — reversal — Ambro
Says the introduction:
This appeal presents two issues of first impression in our Court concerning the Internal Revenue Service’s assessment of civil penalties for violation of 31 U.S.C. § 5314 and its implementing regulations, which require certain persons annually to file a Report of Foreign Bank and Financial Accounts (colloquially called a “FBAR” or simply “Report”). First, we examine federal court jurisdiction over actions challenging the IRS’s assessment of civil FBAR penalties. We conclude that jurisdiction exists here but reserve the question whether it is established in the District Court when a taxpayer files suit to challenge a FBAR penalty before fully paying it. Second, we clarify that, to prove a “willful” FBAR violation, the Government must satisfy the civil willfulness standard, which includes both knowing and reckless conduct. To ensure this action accords with that standard, we remand for further proceedings consistent with our opinion.
The court sided with the government in holding that the district court applied the wrong standard for willfulness insofar as implied that the issue turned on the taxpayer’s subjective motivations and the overall egregiousness of his conduct.
Joining Ambro were Chagares and Greenaway. Arguing counsel were Andrew Weiner for the government and Patrick Egan of Fox Rothschild for the taxpayer.
US v. Bey — criminal — reversal — McKee
The Third Circuit today vacated a defendant’s criminal conviction, holding that, while the initial stop was lawful, the continuation of the stop after the officers should have realized that he did not meet the physical description violated the Fourth Amendment.
Joining McKee were Vanaskie and Restrepo. Arguing counsel were Brett Sweitzer of the EDPA federal defender for the defendant and Robert Zauzmer of the EDPA US Attorney’s office for the government.
In re: Community Bank of Northern Va. Mortgage Lending Practices Litig. — civil / jurisdiction — reversal — Shwartz
An attorney-fee-allocation dispute broke out after the final order approving a class action settlement. After one side filed a state action alleging breach of contract, the other side asked the federal court that had presided over the class action to halt the state litigation and decide the fee issue itself, which it did. The Third Circuit reversed, holding that the district court erred in exercising ancillary jurisdiction over the state litigation.
Joining Shwartz were Roth and Fisher. Arguing counsel were Stanley Stein of Pittsburgh for the appellant and Gary Lynch of Carlson Lynch for the appellee.