taxpayers to disclose foreign holdings to the i and to to the i are asked and to treasury for various reasons it was initially for it was it was to provide for  for investigative purposes and criminal purposes specifically under money laundering statutes and with awesome specifically mentioned in the legislative history of this idea that congress beautifully for hiding money in swiss bank accounts and it was  revenue laws by saying it's something directly traceable to the power granted by congress to congress by section eight article one of the constitution to lead collect taxes duties impose an excise as it is this the kind think it's directly internal revenue laws which includes all others exercise of power that you're referring to under title twenty six then you have eight different exception that uses different statutory language that i would submit your honor is consider i'm turning revenue laws but provide for internal revenue so the idea is that a reporting requirement that then is used to investigate tax evasion provides for internal revenue not only do you have the original bank secrecy x factor but then in two thousand four congress upped the ante on people who didn't file at bars by virtue of in increasing the penalty because i or asked had if they had the congress had asked treasury to provide a report as to people holding assets offshore and treasury got back to them in a white paper that basically say we we estimate that there are still hundreds of thousands not withstanding the penalties that already exist there are hundreds of thousands of taxpayers u s taxpayers that are hiding money offshore as a result what treasury get what congress is it increased the penalty and about the same time the prior year in two thousand and three treasury delegated authority with in so here you have a clear marriage of a statutory language provides for internal revenue and what the act are is all about and so there you have your squarely with an exception and i'm going to one last point that i think is really crucial here court to create a certain uniformity of the law in certain areas and specifically excluded tax from one of its areas which is why happy is exceptional now the app are cases by and large are brought not until recently or actually is now i'm sure a factor called factor but at the time there was no third party reporting the question then becomes how you make sure that people are still paying their fair share because that that income is of provide for internal rapinoe if it provides for internal revenue and also helps with money laundering investigations that doesn't mean that it has doesn't get within the statute doesn't say exclusive we provide or only provide for internal revenue so once you recognize and which i think is clear is day not only when you look at the bank secrecy act all the things that have happened with our since then and once you're satisfied that it does provide for internal revenue because it does then that's the end of the employer and so therefore we think and then functionally as i said before these cases are by and large going to federal circuit anyway so there is no law it defies the reasoning that congress the top five the reason that congress ha in giving the federal circuit exclusive jurisdiction under certain areas of law in order to create that uniformity to transfer this case to federal circuit because these cases are going to we knowledge that we generally exercise plenary review over questions involving the application or more of the fact that we recognize that issues of state of mind often represented an exception core there is also a objective element in terms of the what a reasonable person you know when the same facts realized the risk a few was undertaking with that that is not that is an aid that is an objective standard of review that court if you look at the court's actual conclusion the court didn't say that it found it he didn't know it said that the government handled provided evidence sufficient to show by her ponder enough and so even the courts own and now i mean the courts credited the court didn't say because this guy said he didn't now and i believe him then i find that even though that's not what more then said little more than you're saying at the point and also there are a bunch of subsidiary points that the court also didn't make credit i mean didn't make findings it didn't say that it believed that he had he been no we had two accounts the court said buck there's some evidence that he didn't know he had two accounts and i don't have to reach that because even if i did we go the other way now we think that the court has misconstrued the record in the in fatal ways by the bottom of it but as to what the court didn't do it didn't rest strictly on a crowded determination and our arguments don't really take that credibility and it does the other arguments don't attack that credibility determination arguments or as a matter of law he was wracked less because the undisputed record shows as by that if you prefer that he would say no to all of those to all those elements but i would suggest is that even in that even that lead that passage that you're referring to still he says a lot i find the courts got a binary analysis either he did it intentionally or he was negligent with the court didn't really consider was if there's a third option then the third option that the law requires the court to consider which is that careful he was impressing and a reasonable were asking what it was i get that argument and why would the court get to those questions and resolve them if the court made the finding that it did i mean it's it decided that he knew it we don't know what the court decided in terms of how risky his behavior was maybe his behavior was tremendously risky but he just now or maybe he didn't know certain facts and that that the should the court doesn't have to deal with all three issues well i mean if he knew all the facts and that again amount to reckless conduct or he knew some of the facts and he shouldn't have known whether if you look at all that stuff they can do or should have known whether that constitute reckless that constitutes reckless behavior this court i submit this court can't really go through a fair analysis because it doesn't know what there's a tremendous amount of evidence that suggests that he knew or is reckless at the time of filing but what the evidence that succeeds comes after the actual filing shows that he's suspicious behavior his reckless conduct continue for example he knew that he was violating the law for decades  told him then he has a new return preparer he doesn't talk to the return preparer he doesn't remember talking the term there at all about about his foreign holdings and he has no idea how that return with basic information where is your count what account number how much money adding he does a review that forms that form doesn't get far with the tax return mind you gets filed to a different address so there's no mistaking that this is not part of  get people to come forward by themselves the benefit of voluntary disclosure program is that if you step for yourself you'll have to pay a reduced penalty and we will give you some assurances that you will be criminally prosecuted after and that's the deal that the government offered he then puts in that filing that he's been told that u b s is going to provide his enduring permeation his information to the internal revenue service then he files disclosing account that he had for thirty five this court based upon the exception as he explained it to you because there is no doubt that the primary purpose of the regulations as they relate to the half hour is for the collection of revenue and that is a specific exemption from the exclusive federal jurisdiction and i would you also agree with him that the current acclaim probably the government doesn't necessarily bring this into play yes i do agree that but i would note that one thing that i know he mentioned in there they mentioned in their  and didn't quite come up and i want to cover is one of the reasons obviously for the federal circuit is uniformity and one of the reasons uniformity is not an issue here is because there have been many district court decisions already on this exact specific issue the only difference between responsibilities and who were not paying their taxes and who the government had to then go after and bring the case to try and get the penalties enforced so that brought a different jurisdiction on this case was entirely different because in this case my client mr the pros and did not act locally and behave entirely a perfectly throughout the process and he himself paid just some of the power of the so that we could bring the case under a new legal exaction theory so that we could have it decided by the district court so we i believe well definitely i would like to dress as well your honor because i believe brown is dispositive on this issue because brown speaks to recklessness and recklessness as exactly what the government is basically making the linchpin of its effort to hav factual component and then the plane or standard to the legal component because germination of recklessness is in and of itself a factual analysis in fact williams which is the fourth circuit case that covers the f d r state directly that lawfully is a factual analysis and it's a clear eric issue it's a factual mouses because there's no statutory interpretation there's no legal interpretation in fact one of the arguments that we sat through this morning prior to this one this issue came up this court being asked to determine and to give us a legal definition of what recklessness is here recklessness is a long known common look at it but there's a bit of a nuance here and i'm there since the supreme court case that came  out this year in the u s bank the c w capital asset and in footnote seven of the court's decision i don't know if you're familiar with it but it talks about this was a bankruptcy case but if the court if the bankruptcy court somehow misunderstood the nature of the arm's length query if it devise some multi factor test of for addressing the issue it would apply to nope overview what it may not do is review independently a garden variety decision is here that the various back span of the men up in arms length or a non arms length transaction and so do not confer insider status you would say well insider status is a fact issue is saying if the court misunderstand how to apply the law to the facts it looks like they know but in that case why wouldn't you by analogy apply that case to to to this case as well government really goes out of its way in a torture analysis to try to dissect his opinion but before he gets into his discussion of what willful is and whether he's determined whether this is well or not and when he makes that ultimate statement which i think is the most important one is that i'm not allo i'm not going to let these inferences reach me to the point of inferring welcome this at page seven of his opinion he quite clearly in three different places points out what willfully is and it includes recklessness out of as we would say back right grew up but they got to the point the point is that here you've got a person who knew probably back in the eighty's or ninety's from mr hersh has been accounted that he was breaking the law correct and then goes out and creates any excuse and what do i do about it he said well you can't break the law so it just the size of the let it go and then later on he gets a significant loan puts it into a second account hey you signed this the government's now going to do an audit and he goes to it gets advice the advice is you got a problem it would seem but that point not to disclose the second to kill it is a major problem if that is that in his opinion that well in two thousand and seven he files the f r and it has every last thing about his foreign account except for that one account it has been a country it has the bank it has an account number and it has up to a million dollars what accounts for the facts as brought out a trial and testified to by my client and found credible by the judge is that he did not know there were two accounts he always thought of it as want to count and indeed what i think but it is not apparent that he submitted it knowing that amid the second account the government's evidence going to that point relies on inferential leaps on which we are unwilling to hang a finding that the drawing with willful and you're on of the evidence as testified to testified to by my client was that when he went before he ever heard from the government he went and got legal advice because he had read some articles about the fact that the government was starting to look more into these types of accounts and he became uncomfortable he went to an accountant and he spoke to the lawyer and that were sent to an expert forensic accountant and they prepared new filings for every one of these years going back to two thousand and four and in those he accurately and appropriately stated his income and stated  hours and by the way was all after tax dollars there's no evidence of the let me ask you a question on this very point i could government presented evidence that your client had made separate transfers from each of his u b s accounts in the weeks immediately out he had three accounts from time after filing the f bar and before he transferred the two accounts but it's not evident in more and part of the problem here and i think is really important on the record not in his opinion but on the record at the end of the trial and the judge was we were having an argument the judge gave it to the government you have not called a single witness with any knowledge of these facts the accountant was available to them the agent who audited my clients are when you see these facts what do you mean so i understand what the government asked him to do once they started auditing some two years later he went to an interview with two i r s agents we deposed and both he that they made an initial determination that it wasn't woeful that was then overturned we depose a person who ever turned it in their opinion where he did that can you show me and yes we did that all evidence points to an unintentional oversight or negligent act page ten i just i don't understand that's negligence or negligence and willful is recklessness where could be reckless it was as he has a show that by any stated correctly what is reckless so how did these facts for get well off how do they fit into showing not reckless just just show me the analysis he does not do that specifically your honor because of that a problem no because by definition at the start of the opinion he has stated that local and this includes reckless behavior then having made that definition to wrap the opinion he says this is why this is not recklessness under the facts of this particular case as the judge found but it's replete he talks about all the different factors that why it doesn't rise to the standard of openness which includes reckon this for instance you know when it's as i know i'm breaking the law and what you can do to break the law recklessness as i understand it which colloquially is that i should know that i'm running a big risk here and i'm just going to ignore the risk i hear ya know but in this between reckless and well and therefore that's why the safeco analysis required an extra step that ok let's just go to logic and willfulness and recklessness can get you a civil penalty correct let's assume it's not  you know dinners including even mashed potatoes dinner is ready you're not going to say but you didn't tell me the magnitude of the ready you told me the dinner was ready isn't that a good logic then that recklessness recklessness is a subset of willfulness it is an all of the things that necessarily are vocal it's something else but he's i don't believe that opinion should be required to dissect it on that level number one because we he told them an account number and i told them out up two million dollars i mean if that there is no what a decision that this makes the owner standard would mean is that there's really not a case you could devise that wouldn't be will conduct and the statute calls for a ten thousand dollars penalty if it's not well call and a million dollar penalty if it is and congress would not have made that distinction without there being some basis for it to be non local and if this case is is not is woeful i can't think of a case where anyone failed to exactly correctly fill out their form check the box on my on my tax return saying i have a foreign bank account tell me exactly what bank gets him i can't think of  payer paid all the taxes owed on the accounts and close the accounts and you quote the account of to happen to have not disclosed and the fact that there was no other suspicious activity this stands in stark contrast on every one of those aspects because recklessness does add eight mental state of mind there's twenty case law i believe that you your honor cited one i will give you another one along six twenty after reading be three twenty seven which talks about whether an