Court Opinion

ID: 4670960
Source: CourtListenerOpinion
Date Created: 2021-03-24 17:00:41.868087+00
Date Added: 2024-06-11T08:02:19.343652
License: Public Domain

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 

FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 19-55585
Plaintiff-Appellee,
D.C. No.
V. 2:18-cv-00803-
MWF-JEM
JANE BoyD,
Defendant-Appellant. OPINION

 

 

Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding

Argued and Submitted September 1, 2020
Pasadena, California

Filed March 24, 2021

Before: Sandra S. Ikuta and Mark J. Bennett, Circuit
Judges, and Douglas Woodlock,* District Judge.

Opinion by Judge Bennett;
Dissent by Judge Ikuta

 

* The Honorable Douglas P. Woodlock, United States District Judge
for the District of Massachusetts, sitting by designation.
2 UNITED STATES V. BOYD

 

SUMMARY™

 

Tax

The panel reversed the district court’s judgment and
remanded for further proceedings in an action by the United
States for tax penalties and interest involving a taxpayer’s
failure to report foreign financial accounts.

Taxpayer had a financial interest in multiple financial
accounts in the United Kingdom. She received interest and
dividends from these accounts but did not report the interest
and dividends on her 2010 federal income tax return, or
disclose the account to the Internal Revenue Service. In
2012, taxpayer participated in the Internal Revenue
Service’s Offshore Voluntary Disclosure Program and
submitted a Report of Foreign Bank and Financial Accounts
(FBAR) listing her fourteen foreign accounts for 2010, and
amended that year’s tax return to include the interest and
dividends from those accounts. The IRS concluded that
taxpayer had committed thirteen non-willful violations of
the reporting requirements under 31 U.S.C. § 5314—one for
each account she failed to timely report for 2010. The United
States then sued taxpayer for civil penalties under

§ 5321(a)(5)(A).

Examining the statutory and regulatory scheme for
reporting a relationship with a foreign financial agency
under § 5314, the panel held that § 5321(a)(5)(A) authorizes
the IRS to impose only one non-willful penalty when an

 

™“ This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. BOYD 3

 

untimely, but accurate, FBAR is filed, no matter the number
of accounts.

Judge Ikuta dissented because the panel’s interpretation
of the statutes is contrary to the language of the relevant
statutes and regulations, and is implausible in context. In
Judge Ikuta’s view, the majority interprets the statutes and
regulations in a manner that unfairly favors the tax evader.

 

COUNSEL

A. Lavar Taylor (argued) and Jonathan T. Amitrano, Law
Offices of A. Lavar Taylor LLP, Santa Ana, California, for
Defendant-Appellant.

Francesca Ugolini (argued), Deborah K. Snyder, and
Kathleen E. Lyon, Attorneys; Richard E. Zuckerman,
Principal Deputy Assistant Attorney General; Tax Division,
United States Department of Justice, Washington, D.C.; for
Plaintiff-Appellee.

David Michaels, DTMtax, Placentia, California, for Amici
Curiae Laxman, Jashu, Hiten, and Anita Patel.

Caroline D. Ciraolo and Caroline Rule, Kostelanetz & Fink
LLP, Washington, D.C., for Amicus Curiae American
College of Tax Counsel.
4 UNITED STATES V. BOYD

 

OPINION
BENNETT, Circuit Judge:

Defendant Jane Boyd did not timely file a Report of
Foreign Bank and Financial Accounts form (“FBAR”)
disclosing her foreign financial accounts in the United
Kingdom.! The Internal Revenue Service (“IRS”) found
that she violated the reporting requirements of 31 U.S.C.
§ 5314 and imposed multiple penalties under 31 U.S.C.
§ 5321(a)(5)(A) based on her belated submission of a single
FBAR. The government sued in the district court seeking to
obtain a judgment against Boyd in the amount of $47,279,
plus additional late-payment penalties and interest for non-
willful violations. The parties cross moved for summary
judgment. The district court granted the government’s
motion, concluding that § 5321(a)(5)(A) authorized the
government to impose multiple non-willful penalties—up to
$10,000 for each foreign bank account that was required to
be listed on the FBAR. We reverse this judgment and
conclude that § 5321(a)(5)(A) authorizes the IRS to impose
only one non-willful penalty when an untimely, but accurate,
FBAR is filed, no matter the number of accounts.

L

The relevant facts are undisputed. Jane Boyd, an
American citizen, had a financial interest in fourteen

 

! The FBAR was due by June 30, 2011. Boyd filed an accurate
FBAR in October 2012 on the prescribed form, TD F 90-22.1. A blank
copy of Form TD F 90-22.1 as it appears in the Excerpts of Record, is
attached as Appendix A to this opinion. The parties do not dispute that
this was the prescribed form at the time Boyd made her belated FBAR
filing. Appendix B to this opinion contains certain relevant statutes and
regulations.
UNITED STATES V. BOYD 5

 

financial accounts in the United Kingdom with an aggregate
balance in excess of $10,000. The amounts in these accounts
significantly increased between 2009 and 2011 after her
father died in 2009 and she deposited her inheritance. Boyd
received interest and dividends from these accounts and did
not report the interest and dividends on her 2010 federal
income tax return or disclose the accounts to the IRS. In
2012, Boyd asked to participate in the IRS’s Offshore
Voluntary Disclosure Program—a program that allows
taxpayers to voluntarily report undisclosed offshore
financial accounts in exchange for predictable and uniform
penalties. After the IRS accepted Boyd into the program,
she submitted, in October 2012, an FBAR listing her
fourteen foreign accounts for 2010 and amended her 2010
tax return to include the interest and dividends from these
accounts.

Boyd was granted permission by the IRS to opt out of
the program in 2014. The IRS then examined Boyd’s
income tax return and concluded that she committed thirteen
FBAR violations—one violation for each account she failed
to timely report for calendar year 2010.7 The late-submitted
FBAR was complete and accurate. The IRS concluded that
Boyd’s violations were non-willful, and it assessed a total
penalty of $47,279. In 2018, the government sued Boyd
seeking to obtain a judgment against her for the $47,279 plus
additional late-payment penalties and interest.

Boyd argued before the district court that she had
committed only one non-willful violation, not thirteen, and
that the maximum penalty allowed by the statute for that

 

2 The IRS determined that one of the accounts was used to fund
several other accounts and therefore did not impose a separate penalty
on the fourteenth account.
6 UNITED STATES V. BOYD

 

single non-willful violation was $10,000. The government
contended that the relevant statutes and regulations
authorized the IRS to assess one penalty for each non-
reported account. The district court agreed with the
government. Boyd timely appealed.

We have jurisdiction under 28 U.S.C. § 1291.

II.

This case presents an issue of first impression for this
court. We must decide whether 31 U.S.C. § 5321 authorizes
the IRS to impose multiple non-willful penalties for the
untimely filing of a single accurate FBAR that includes
multiple foreign accounts.

Boyd argues that the statutory language does not support
a separate penalty for each account she should have listed on
the FBAR she failed to timely file. Rather, according to
Boyd, the statutory and regulatory schemes provide that a
non-willful, untimely but accurate FBAR filing constitutes a
single violation subject to a maximum penalty of $10,000.
Boyd also contends that the rule of lenity applies to statutes
imposing penalties and, therefore, §5321 should be
construed strictly against the government.

The government argues that multiple non-willful
violations may spring from a single late but accurate FBAR,
because 31 U.S.C. § 5314 and its implementing regulations
create reporting requirements that extend to each foreign
account. In the government’s view, Boyd’s reading of
§ 5321 is incompatible with the statutory scheme as a whole,
particularly when viewing the statute’s “reasonable cause”
exception and willful penalty provisions, both of which, the
government claims, are directed to accounts and not the
FBAR form.
UNITED STATES V. BOYD 7

 

We agree with Boyd. The statute, read with the
regulations, authorizes a single non-willful penalty for the
failure to file a timely FBAR. Accordingly, we reverse the
district court and remand for further proceedings consistent
with this opinion.

A.

We review de novo both the “district court’s grant of
summary judgment,” Bradley v. United States, 817 F.2d
1400, 1402 (9th Cir. 1987), and its interpretation of the
statute, see United States v. Town of Colo. City, 935 F.3d
804, 807 (9th Cir. 2019). Summary judgment here is
appropriate if there is “no genuine dispute as to any material
fact and the [government] is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). When we interpret a statute,
our “first step ... is to determine whether the language at
issue has a plain and unambiguous meaning with regard to
the particular dispute in the case.” Robinson v. Shell Oil Co.,
519 U.S. 337, 340 (1997). If so, the “inquiry must cease,”
provided “the statutory scheme is coherent and consistent.”
Id. (quoting United States v. Ron Pair Enters., Inc., 489 U.S.
235, 240 (1989)). We determine “[t]he plainness or
ambiguity of [the] statutory language . . . by reference to the
language itself, the specific context in which that language
is used, and the broader context of the statute as a whole.”
Id. at 341; see also Util. Air Regul. Grp. v. EPA, 573 U.S.
302, 320 (2014) (noting that it is a “fundamental canon of
statutory construction that the words of a statute must be read
in their context and with a view to their place in the overall
statutory scheme” (quoting FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 133 (2000))). Thus, in
addition to looking at the statutory text, we analyze the
statutory and regulatory framework as a whole and examine
the meaning of the statutory provisions “with a view to their
8 UNITED STATES V. BOYD

 

place” in that framework. Util. Air Regul. Grp., 573 US.
at 320.

B.

Section 5321 authorizes the government to “impose a
civil money penalty on any person who violates, or causes
any violation of, any provision of section 5314.” 31 U.S.C.
§ 5321(a)(5)(A). Section 5321 establishes two types of civil
penalties depending on whether the violation was willful or
non-willful. See id. § 5321(a)(5). The maximum penalty for
a non-willful violation “shall not exceed $10,000.” /d.
§ 5321(a)(5)(B)(i).3. ~The maximum penalty for willful
violations is the greater of $100,000 or “50 percent of the
amount determined under subparagraph (D).” Id.
§ 5321(a)(5)(C). Subparagraph (D) provides that for “a
violation involving a transaction,” the relevant amount is
“the amount of the transaction,” id. § 5321(a)(5)(D)(i), while
for “a violation involving a failure to report the existence of
an account or any identifying information required to be
provided with respect to an account,” the relevant amount is
“the balance in the account at the time of the violation,” id.
§ 5321(a)(5)(D)ii). The statute thus penalizes willful
violations involving misreporting or non-reporting of
account information up to the greater of 50 percent of the
account balance, or $100,000.

 

3 The statute also recognizes a reasonable cause exception for non-
willful violations: “No penalty shall be imposed” if a violation was “due
to reasonable cause” and “the amount of the transaction or the balance in
the account at the time of the transaction was properly reported.”
31U.S.C. § 5321(a)(5)\(B)Gi).

* So, for example, a penalty of up to $500,000 may be imposed for
a willful failure to report an account with a balance of $1,000,000, and a
UNITED STATES V. BOYD 9

 

The salient question is: Did Boyd commit one non-
willful violation for her single failure to timely file the
FBAR, or did she commit thirteen (or fourteen) non-willful
violations for her single failure to timely file an FBAR listing
her fourteen relevant accounts? We turn to the applicable
statutes and implementing regulations to answer this
question.

Section 5321(a)(5)(A) provides for imposition of “a
civil money penalty on any person who violates, or causes
any violation of, any provision of section 5314.” Congress
did not define “provision.” We therefore apply the ordinary
and plain meaning of that word. See Metro One
Telecomms., Inc. vy. Comm ’r, 704 F.3d 1057, 1061 (9th Cir.
2012) (“[I]n the absence of an indication to the contrary,
words in a statute are assumed to bear their ordinary,
contemporary, common meaning.” (quoting Walters v.
Metro. Educ. Enters., Inc., 519 U.S. 202, 207 (1997))). A
provision is “an article or clause (as in a contract) that
introduces a condition” or “a condition, requirement, or
item specified in a legal instrument.” Provision, Merriam-
Webster.com, https://www.merriam-webster.com/dictiona
ry/provision (last visited Nov. 9, 2020) (defining provision
as “proviso” or “stipulation”).5

Section 5314 contains several provisions, including:

(a) Considering the need to avoid impeding
or controlling the export or import of

 

penalty of up to $100,000 may be imposed for a willful failure to report
an account with a balance of $150,000.

5 To determine “the plain meaning of terms, we may consult the
definitions of those terms in popular dictionaries.” Metro One
Telecomms., Inc., 704 F.3d at 1061.
10 UNITED STATES V. BOYD

 

monetary instruments and the need to avoid
burdening unreasonably a person making a
transaction with a foreign financial agency,
the Secretary of the Treasury shall require a
resident or citizen of the United States or a
person in, and doing business in, the United
States, to keep records, file reports, or keep
records and file reports, when the resident,
citizen, or person makes a transaction or
maintains a relation for any person with a
foreign financial agency. The records and
reports shall contain the following
information in the way and to the extent the
Secretary prescribes:

(1) the identity and address of participants in
a transaction or relationship.

(2) the legal capacity in which a participant is
acting.

(3) the identity of real parties in interest.
(4) a description of the transaction.

31 U.S.C. §5314(a) (emphases added). As emphasized
above, §5314(a) contains two separate and relevant
provisions: (1) filing a report when maintaining a
relationship with a foreign financial agency, and (2) ensuring
the filed report contains specified information as prescribed
by the Secretary. We next consider the relevant regulations,
as they prescribe how these provisions may be violated.

The Supreme Court in California Bankers Association v.
Shultz, 416 U.S. 21 (1974) explained that “the Act’s civil and
UNITED STATES V. BOYD 11

 

criminal penalties attach only upon violation of regulations
promulgated by the Secretary; if the Secretary were to do
nothing, the Act itself would impose no penalties on
anyone.” /d. at 26. Consequently, our focus must be on the
directives the Secretary had in place at the time of Boyd’s
reporting of her foreign financial accounts. There are two
relevant regulations. The first requires a citizen (like Boyd)
to report financial interests in foreign accounts “for each
year in which such relationship exists and [to] provide such
information as shall be specified in a reporting form
prescribed under 31 U.S.C. 5314 .... The form prescribed
under section 5314 is the Report of Foreign Bank and
Financial Accounts [the FBAR] ....” 31 CFR.
§ 1010.350(a) (emphases added). The second requires that
the FBAR “be filed . . . on or before June 30 of each calendar
year with respect to foreign financial accounts exceeding
$10,000 maintained during the previous calendar year.” Jd.
§ 1010.306(c).6 Thus, § 1010.350 (and the FBAR form)
describes what information must be disclosed in the report
prescribed by §5314—the FBAR—while § 1010.306
imposes a deadline for when the FBAR must be filed.

Because Boyd’s late-filed FBAR was accurate, she could
not have violated § 1010.350—the regulation that delineates
the content of the report (the FBAR) required by § 5314.
Boyd violated only § 1010.306. Her FBAR for calendar year
2010 was due by June 30, 2011, and she did not file it until
2012. Thus, we hold that, under the statutory and regulatory

 

6 The requirement to file an FBAR does not turn on the number of
accounts, only on the aggregate value in those accounts. And only one
yearly FBAR is required, whether there are twenty accounts with an
aggregate value of $10,000, or one account with a value of $10,000,000.
12 UNITED STATES V. BOYD

 

scheme, Boyd committed a single non-willful violation—the
failure to timely file the FBAR.’

We are unpersuaded by the government’s arguments that
Boyd committed multiple violations. First, the
government’s reliance on § 1010.350(a) to support that
Boyd committed multiple violations is misplaced because,
as discussed above, Boyd did not violate § 1010.350(a).8 To
the contrary, she disclosed all the information called for by
Form TD F 90-22.1.

Second, the government argues that the use of the word
“any” before “violation” in § 5321(a)(5)(A) suggests “that
more than one violation may occur with respect to a
particular report (§ 5314(a)) required to be filed.” We

 

7 The dissent accuses us of misquoting and misreading § 1010.306.
Dissent at 25 n.6, 27-28. The dissent is wrong. Subsection (c) of
§ 1010.306 states that “[r]eports required to be filed by § 1010.350 shall
be filed... . on or before June 30 of each calendar year.” The following
subsection (d) makes clear that such reports must be made using the
prescribed form. See 31 C.F.R. § 1010.306(d) (‘Reports required by . . .
§ 1010.350 ... shall be filed on forms prescribed by the Secretary.”
(emphasis added)). Because a taxpayer must make the reports on the
FBAR, it is the FBAR that must be filed by June 30. See United States
v. Bittner, 469 F. Supp. 3d 709, 718 (E.D. Tex. 2020) (“[I]t is the failure
to file an annual FBAR that is the violation contemplated and that
triggers the civil penalty provisions of § 5321.”), appeal docketed, No.
20-40612 (5th Cir. Sept. 18, 2020); see also United States v. Kaufinan,
No. 3:18-CV-00787 (KAD), 2021 WL 83478, at *9 (D. Conn. Jan. 11,
2021) (FBARs must be filed on or before June 30 ....” (internal
quotation mark and citation omitted)).

8 The regulations and FBAR require a person to report much more
information than the number of accounts. Taken to its “logical”
conclusion, the government’s argument could permit many more non-
willful violations than those tied just to the number of accounts that
should have been listed on an FBAR that was not timely filed.
UNITED STATES V. BOYD 13

 

disagree. The language in § 5321(a)(5)(A) that “any
violation of... any provision of section 5314” simply refers
to the relevant regulations that prescribe how the provisions
in § 5314 may be violated. As discussed above, under the
relevant regulations, Boyd committed one violation. And
even if the language could support separate non-willful
penalties in a different factual scenario—like if an individual
first failed to timely file an FBAR, and then filed an
inaccurate one—we are not presented with those facts. Boyd
failed to timely file an FBAR and later filed an accurate one.”

In sum, under the statutory and regulatory scheme,
Boyd’s conduct amounts to one violation, which the IRS
determined was non-willful. Section 5321(a)(5)(B)(i)
authorizes one penalty per non-willful violation of § 5314,
not to exceed $10,000. Because Boyd committed a single
non-willful violation, the IRS may impose only one penalty
not to exceed $10,000.

II.

Despite the clear language of § 5321(a)(5)(B)(), the
government argues that the amount of the penalty can be
assessed on a per-account basis based on the statutory

 

° The district court cases that the government cites in support of its
position, see United States v. Ott, No. 18-cv-12174, 2019 WL 3714491
(E.D. Mich. Aug. 7, 2019); United States v. Gardner, No. 2:18-cv-
03536-CAS-E, 2019 WL 1767120 (C.D. Cal. Apr. 22, 2019), are
inapposite because those courts did not directly address the question
raised here—whether a person commits multiple violations equivalent to
the number of accounts reported on an untimely but accurate FBAR. We
further note that two district court cases, relied upon by Boyd, postdating
the decision we now review, have directly rejected the outcome reached
below in this case. See Kaufman, 2021 WL 83478, at *8—-11; Bittner,
469 F. Supp. 3d at 718-26.
14 UNITED STATES V. BOYD

 

scheme as a whole and legislative intent. We are
unpersuaded.

Before 2004, § 5321 only penalized willful violations.
See 31 U.S.C. § 5321(a)(5) (2004). Congress amended the
statute to allow for non-willful penalties and did so by
establishing a new generally applicable penalty provision,
31 U.S.C. § 5321(a)(5)(B), while placing willful violations
and the associated penalty provision in different
subparagraphs, 31 U.S.C. § 5321(a)(5)(C)-(D). See
American Jobs Creation Act of 2004, Pub. L. No. 108-357,
§ 821(a), 118 Stat. 1418, 1586. The new penalty provision
in § 5321(a)(5)(B)G) does not expressly authorize (or forbid)
multiple non-willful penalties on a per account basis for a
late-filed but accurate FRAR—“[T]he amount of any civil
penalty imposed [for a non-willful violation of any provision
of § 5314] ... shall not exceed $10,000.” 31 USC.
§ 5321(a)(5)(B)(G). The willful-violation provisions, on the
other hand, are not silent as to multiple account penalties;
they state that a penalty amount is determined “in the case of
a violation involving a transaction, [by] the amount of the
transaction, or ... in the case of a violation involving a
failure to report the existence of an account or any
identifying information required to be provided with respect
to an account, [based on] the balance in the account at the
time of the violation.” 31 U.S.C. § 5321(a)(5)(D)@)-(ii).

The government contends that the wil/ful violation
penalty provision, § 5321(a)(5)(D)Gi)—which explicitly
bases the penalty amount on the balance of any account
willfully misreported or non-reported—is evidence that the
non-willful violation penalty provision also must base the
penalty amount on the number of accounts misreported or
non-reported, given that Congress intended to treat the two
penalty frameworks identically. In the government’s view,
UNITED STATES V. BOYD 15

 

the 2004 amendments merely extended the existing penalties
authorized by § 5321 to non-willful violations. We find the
text Congress adopted did not do so.

“Congress generally acts intentionally when it uses
particular language in one section of a statute but omits it in
another.” Dep’t of Homeland Sec. v. MacLean, 574 U.S.
383, 391 (2015). Thus, we presume that Congress purposely
excluded the per-account language from the non-willful
penalty provision in subparagraph (B)(1) because it included
such language in the willful penalty provision in
subparagraph (D). See United States v. McDuffy, 890 F.3d
796, 800 (9th Cir. 2018) (“[W]here Congress includes
particular language in one section of a statute but omits it in
another section of the same Act, itis generally presumed that
Congress acts intentionally and purposely in the disparate
inclusion or exclusion.” (alteration in original) (quoting
Dean v. United States, 556 U.S. 568, 573 (2009))), cert.
denied, 139 S. Ct. 845 (2019); see also Fortney v. United
States, 59 F.3d 117, 120 (9th Cir. 1995) (applying this
presumption to the Internal Revenue Code). Indeed,
Congress could very easily have written, using the language
of the willful violations penalty provision, something like:
“Except as provided in subparagraph (C) [dealing with
willful violations], the amount of any civil penalty imposed
under subparagraph (A) shall not exceed $10,000 for each
failure to timely report the existence of an account or any
identifying information required to be provided with respect
to an account.” Instead, Congress wrote the statute it did:
“Except as provided in subparagraph (C) [dealing with
willful violations], the amount of any civil penalty imposed
under subparagraph (A) shall not exceed $10,000.”
31 U.S.C. § 5321(a)(5)(B)G). We decline to read into the
statute language that Congress wrote in the willful penalty
16 UNITED STATES V. BOYD

 

provision but omitted from the non-willful penalty
provision. '”

The government also contends that the per-account
language in the reasonable cause exception to non-willful
violations (which Congress created with the same set of
amendments that established non-willful violations)
supports its interpretation. But contrary to the government’s
argument, the inclusion of per-account language in the
reasonable cause exception supports that Congress
intentionally omitted per-account language from the non-
willful penalty provision. Since we know Congress was
aware of that language during the amendment process and
left it out of the non-willful penalty provision, we think the
better view is that Congress acted intentionally when it
drafted the non-willful civil penalty with no reference to
“account” or “balance in the account.” See MacLean,
574 US. at 391; see also Bittner, 409 F. Supp. 3d at 719;
Kaufman, 2021 WL 83478, at *9 (agreeing with Bittner “that
Congress intentionally omitted reference to ‘account’ or

 

10 The dissent erroneously claims that we “defin[ed] the word
‘violation’ differently when it is used in” § 5321(a)(5)(B) than when it is
used in subparagraph (D). Dissent at 28-30. We have not done so. We
have simply given effect to Congress’s intent to formulate two different
schemes of punishment for willful and non-willful violations. See
Kaufinan, 2021 WL 83478, at *10 (“Concluding that the manner of
calculating the statutory cap for a willful violation is different than for a
non-willful violation does not mean that the conduct underlying the
violation differs. Under both scenarios, the violation flows from the
failure to file a timely and accurate FBAR. The only difference is that
the manner for calculating the statutory cap for penalties for willful
violations involves an analysis that includes consideration of the balance
in the accounts, while no such analysis is required for non-willful
violations.”). The dissent on the other hand ignores the import of
Congress’s explicit choice to omit the per-account language from the
non-willful penalty provision in subparagraph (B).
UNITED STATES V. BOYD 17

 

‘balance in the account’ when drafting the penalty provision
for non-willful violations”).

The government contends that the use of the word “any”
before “civil penalty” in § 5321(a)(5)(B)G@) suggests that
“multiple potential items are being referenced.” The “any
civil penalty imposed under subparagraph (A)” language in
§ 5321(a)(5)(B)G) simply refers to subsection (a)(5)(A),
which provides that the Secretary “may impose a civil
money penalty on any person who violates, or causes any
violation of, any provision of section 5314.” This does not
suggest the possibility of multiple non-willful penalties on a
per-account basis for the single failure to file a timely
FBAR."

 

" The American College of Tax Counsel, appearing before us as
amicus curiae, points out that, in 2014, the IRS provided taxpayers its
view of the difference between willful and non-willful penalties:

Separately, taxpayers with foreign accounts
whose aggregate value exceeds $10,000 any time
during the year must file a[n FBAR].... The FBAR
is not filed with a federal tax return and must be filed
by June 30 each year.

For the FBAR, the penalty may be up to $10,000,
if the failure to file is non-willful, 1£ willful, however,
the penalty is up to the greater of $100,000 or 50
percent of account balances; criminal penalties may
also apply.

Fact Sheet, Offshore Income and Filing Information for Taxpayers with
Offshore Accounts, FS-2014-7 (June 2014) (hereinafter, “2014 Fact
Sheet”) (emphasis added), available at https://www.its.gov/newsroom/
18 UNITED STATES V. BOYD

 

The non-willful penalty provision allows the IRS to
assess one penalty not to exceed $10,000 per violation, and
nothing in the statute or regulations suggests that the penalty
may be calculated on a per-account basis for a single failure
to file a timely FBAR that is otherwise accurate. Thus, the
IRS may impose only one penalty not to exceed $10,000 for
Boyd’s single failure to file a ttmely FBAR.

IV.

Starting with the language of the statute and the
regulations as a whole, and using normal tools of statutory
construction, we have no difficulty concluding that the
government cannot assess multiple penalties for the non-
willful violation here—failing to timely file an FBAR. But

 

offshore-income-and-filing-information-for-taxpay ers-with-offshore-
accounts (last visited Nov. 9, 2020).

And even here, at the same time the IRS was telling Boyd she was
subject to multiple non-willful penalties, it sent her a form letter
(consistent with the 2014 Fact Sheet) appearing to state the opposite.
The letter explained that the IRS was “proposing a penalty” and included
two checked boxes. The first box explained that the IRS was “proposing
the assessment of a penalty under 31 U.S.C. § 5321(a)(5) for failing to
meet the filing requirements of 31 U.S.C. § 5314. For each calendar
year, any U.S. person having one or more foreign accounts with
maximum balances aggregating over $10,000 is required to file [the
FBAR] with the Internal Revenue Service by June 30th of the following
year.” The second box explained that “/fJor the failure to file [the
FBAR] due on or after June 30, 2005, the penalty cannot exceed
$10,000.” (emphasis added).

No one cited this letter in their briefs, and it does not “estop” the
government or the IRS. We cite it and the 2014 Fact Sheet for two
purposes—first for their logical read of the statute and regulations, and
second for the fact that they come from the IRS, which now urges upon
us a different and far less logical read.
UNITED STATES V. BOYD 19

 

even if the statute were ambiguous in its treatment of non-
willful penalties, we must strictly construe a “tax provision
which imposes a penalty . . . ; [it] cannot be assessed unless
the words of the provision plainly impose it.” Bradley,
817 F.2d at 1402-03. While the rule of lenity ordinarily
applies only to criminal statutes, see Kasten v. Saint-Gobain
Performance Plastics Corp., 563 U.S. 1, 16 (2011), our
circuit strictly construes tax penalty provisions independent
of the rule of lenity. The statute in Bradley was not a penal
statute, and we did not discuss the rule of lenity.
Nevertheless, we still strictly construed the statute, which
authorized a maximum civil penalty of $500 for the filing of
frivolous returns. Bradley, 817 F.2d at 1402. We are bound
by Bradley’ s statement of the law.”

Even if the government’s reading of the statutory scheme
were reasonable (and we think it is not), that reading does
not arise from the plain words of either the statute or the
regulations. And Boyd’s reading, even if it is not compelled,
is reasonable. Thus, the rule we enunciated in Bradley
would come into play, and we would strictly construe the
statute against the government. The district court found the
rule inapplicable because “that is not exactly the issue
here—there’s no question that the civil penalty exists; that’s
the basis for this dispute.” United States v. Boyd, No. 18-
803-MWE (JEMx), 2019 WL 1976472, at *5 (C.D. Cal. Apr.
23, 2019). We disagree. The precise issue here is not
whether the statute authorizes a non-willful penalty; it is
whether the statute plainly authorizes a non-willful penalty

 

” We note that though Boyd raised Bradley in her opening brief, the
government did not discuss the case in its answering brief. We also note
that the United States Tax Court has held that the rule of lenity applies
to tax laws that impose a monetary penalty. Mohamed v. Comm’r, T.C.
Memo. 2013-255, 2013 WL 5988943, at *10-11.
20 UNITED STATES V. BOYD

 

for each account under the facts here, and it does not.’
Thus, the government’s position would also be unavailing
under Bradley.

V.

Boyd was required to file one FBAR for the 2010
calendar year by June 30, 2011. She failed to do so.
Accordingly, she committed one violation, and the IRS
concluded that her violation was non-willful. Thus, the

maximum penalty for such a violation “shall not exceed
$10,000.”

REVERSED and REMANDED.

 

IKUTA, Circuit Judge, dissenting:

When the Bank Secrecy Act! was enacted by Congress
in 1970, it was a cutting edge vehicle to combat “a serious

 

13 Though the government did not discuss Bradley, it did discuss
Comm 'r v. Acker, 361 U.S. 87 (1959), which was also cited by Boyd in
her opening brief. The government argued: “[T]he Supreme Court noted
the established principle that ‘one is not to be subjected to a penalty
unless the words of the statute plainly impose it.’ As the District Court
held ..., however, there is no dispute here that § 5321(a)(5) provides
for a penalty.” (emphasis added). We reject this “out of one, many”
argument.

' The Bank Secrecy Act is the popular name for the Bank Records
and Foreign Transactions Act, Pub. L. No. 91-508, 84 Stat. 1114. Title
II of the Act was originally codified at 31 U.S.C. §§ 1051-1122. In
1982, these sections were re-enacted without substantive change as
31 U.S.C. §§ 5311 to 5322, with applicable regulations at 31 C.F.R.
§ 103.11 et seq.
UNITED STATES V. BOYD 21

 

and widespread use of foreign financial institutions, located
in jurisdictions with strict laws of secrecy as to bank activity,
for the purpose of violating or evading domestic criminal,
tax, and regulatory enactments.” Cal. Bankers Ass’n y.
Shultz, 416 U.S. 21, 27 (1974). The use of foreign accounts
led to the loss of “hundreds of millions in tax revenues,” and
had “debilitating effects” on the American economy. /d.
at 28. Similar issues are facing law enforcement today. In
recent years, Americans have poured billions of dollars into
undeclared accounts in jurisdictions like Switzerland and the
British Virgin Islands. See, e.g., Laura Saunders, Zhe JRS
Reels in a Whale of an Offshore Tax Cheat — and Goes for
Another, Wall St. J., Oct. 23, 2020.2 In many cases, “an
American puts assets into foreign trusts, companies, and
other offshore accounts nominally owned by foreigners to
make it look as though no tax is owed to the IRS.” /d. Such
“offshore structures are hard for the IRS to investigate if
they’re in countries without treaties or agreements easing the
exchange of tax information.” /d. The IRS has redoubled
its efforts “to pierce the veil of bank secrecy.” Jd.

The Bank Secrecy Act gives the IRS multiple statutory
tools for combating these offshore tax evasion techniques.
See Shultz, 416 U.S. at 27. One tool that has remained
essentially unchanged since 1970 is the power to impose
penalties on Americans who fail to keep records and file
reports on transactions or accounts with foreign financial
agencies, e.g., 31 U.S.C. §§ 5314, 5321. These reporting
requirements and associated penalties deter taxpayers from
hiding their offshore accounts and therefore “have a high

 

2 Available at https://www.wsj.com/articles/the-irs-reels-in-a-

whale-of-an-offshore-tax-cheatand-goes-for-another-1 1603445399.
22 UNITED STATES V. BOYD

 

degree of usefulness in criminal, tax, or regulatory
investigations or proceedings.” 31 U.S.C. § 5311.

Instead of providing an evenhanded interpretation of
these statutes, the majority strains to interpret them
narrowly. The majority rejects the most natural reading of
the statutory language, which requires Americans to report
each foreign account and imposes a penalty for each failure
to do so. Rather, the majority focuses on the procedure for
complying with the law. Because the regulations direct
taxpayers to aggregate their reports of foreign accounts on a
single reporting form,? the majority concludes that it is the
failure to provide the reporting form (not the failure to report
the individual foreign financial accounts) that constitutes the
statutory violation, and that the IRS may impose only single
penalty for failure to provide the reporting form. Maj. at 11-
12.

Because this interpretation is contrary to the language of
the relevant statutes and regulations—as well as being
implausible in context—I dissent.

I

The facts of this case are undisputed. From 2004 to
2011, Jane Boyd had a financial interest in multiple financial
accounts in the United Kingdom. Boyd did not report these
accounts to the IRS as required by law. After a state
government discovered her foreign accounts, Boyd entered
into the IRS’s limited-amnesty program, which allowed
persons to voluntarily report previously undisclosed

 

3 Report of Foreign Bank and Financial Accounts (Form TD-F 90-
22.1), frequently referred to as the FBAR (revised Jan. 2012), available
at https://www.irs.gov/pub/irs-pdf/f9022 1 pdf.
UNITED STATES V. BOYD 23

 

offshore financial accounts to the IRS in exchange for lower
penalties. As part of her participation in this program, Boyd
submitted her delinquent reports in October 2012. For
unknown reasons, Boyd subsequently opted out of the
amnesty program, and so became subject to full assessment
of penalties. The IRS ruled that Boyd’s failure to report her
foreign accounts was not willful, and it assessed a penalty
for each of thirteen unreported accounts for a total penalty of
$47,279. The government subsequently brought a civil
action against her when she failed to pay the penalty amount.
The district court granted summary judgment in favor of the
government, and this appeal followed.

II

On appeal, the only issue is whether the IRS may assess
a penalty for Boyd’s failure to file a report regarding each of
the thirteen accounts she maintained in the United Kingdom.
The language of the relevant statutes and regulations makes
clear that the IRS can do so.*

The IRS assessed civil penalties against Boyd under
31 U.S.C. §5321(a)(S5)(A) for a violation of 31 U.S.C.
§ 5314. As relevant here, § 5314(a) has both a substantive
and procedural element. As to the substantive element,
§ 5314(a) directs the Secretary of the Treasury to require a
person to “file reports’ when that person “makes a
transaction with a foreign financial agency” or “maintains a
relation ... with a foreign financial agency.” Procedurally,
the report must contain certain information “in the way and

 

4 The text of the relevant statutes and regulations are attached as an
appendix.
24 UNITED STATES V. BOYD

 

to the extent the Secretary prescribes.” 31 U.S.C.
§ 5314(a).5

As required, the Secretary promulgated regulations to
implement the statute. The relevant regulation, 31 C.F.R.
§ 1010.350(a), states that “[e]ach United States person
having a... financial account in a foreign country [1] shall
report such relationship to the Commissioner of Internal
Revenue for each year in which such relationship exists and
[2] shall provide such information as shall be specified in a
reporting form prescribed under 31 U.S.C. 5314 to be filed
by such persons.” 31 C.F.R. § 1010.350(a) (emphasis
added). As this wording makes clear, the obligation to report
each account (as set out in the first clause of § 1010.350(a))
is independent of the obligation to file a reporting form (as
set out in the second clause of § 1010.350(a)).

The first clause of § 1010.350(a) sets out the reporting
obligation: “[e]ach United States person having a financial
interest in, or signature or other authority over, a bank,
securities or other financial account in a foreign country”
must “report such relationship” to the IRS. /d. A person
must “report” a financial interest in a “financial account”
“for each year in which such relationship exists.” /d.

The second clause of § 1010.350(a) sets out a procedural
requirement: that the person having the interest in the
foreign account must “provide such information as shall be
specified in a reporting form.” Jd.

 

5 The Secretary has delegated “[t]he authority to enforce the
provisions of 31 U.S.C. § 5314 and [its implementing regulations] . . . to
the Commissioner of Internal Revenue.” 31 C.F.R. § 1010.810(g).
UNITED STATES V. BOYD 25

 

Section 1010.306 confirms that § 1010.350(a)
implements two independent requirements. Section
1010.306(d) states that the “reports required to be filed” by
§ 1010.350 “shall be filed on forms prescribed by the
Secretary.” The “reports required to be filed” are distinct
from the form that must be used for filing the reports. This
interpretation is required by § 1010.306(e), which provides
that “/f/orms to be used in making the reports required by”
§ 1010.350 “may be obtained from BSA E-Filing System.”
Id. § 1010.306(e) (emphasis added). Given that the reports
are distinct from the applicable reporting forms, the
requirement in § 1010.306(c) that “[r]Jeports required to be
filed by § 1010.350 ... shall be filed with FinCEN on or
before June 30 of each calendar year,” requires the specified
United States person to file a report regarding each foreign
account before June 30, and (as explained in § 1010.306(d))
must do so on the appropriate reporting form.®

Paragraph 5 of § 5321 sets out civil penalties and
establishes both the mens rea and actus reus for a violation
of the reporting requirements in § 5314. As to mens rea, a

 

* Thus, the majority is incorrect in stating that § 1010.306(c)
“requires that the FBAR ‘be filed ... on or before June 30 of each
calendar year... .” Maj. at 11 (quoting § 1010.306(c)). The majority
omits the text in § 1010.306(c) immediately preceding its quotation,
which states that “/rJeports required to be filed by § 1010.350 shall be
filed ... on or before June 30.” 31 C.F.R. § 1010.306(c) (emphasis
added). Contrary to the majority, § 1010.306(c) does not reference the
FBAR reporting form. The “[rleports required to be filed by
§ 1010.350” references § 1010.350(a), which provides that a person with
“a financial interest in, or signature or other authority over, a bank,
securities, or other financial account in a foreign country shall report
such relationship to the Commissioner of Internal Revenue for each year
in which such relationship exists.” (emphasis added). Therefore, the
“[rleports required to be filed,” for purposes of § 1010.306(c), refers to
a report of a “financial account” or other such relationship.
26 UNITED STATES V. BOYD

 

violation may be either willful or not willful. See 31 U.S.C.
§ 5321(a)(5)(B), (C). Regardless of the mens rea, the actus
reus is the same: “any violation of, any provision of section
5314.” Compare 31 U.S.C. §5321(a)(5)(A) (penalty
authorized for “any violation of, any provision of § 5314”
that is not willful), with id, §5321(a)(5)(C) (penalty
authorized for “any violation of, any provision of § 5314”
that is willful). Subparagraphs (B)(i), (C) and (D) of
§ 5321(a)(5) explain the penalties that may be assessed for
any “violation,” which vary depending on the mens reas
(willful or not).

For violations that are not committed willfully,
subparagraph (B)(i) provides that the penalty “shall not
exceed $10,000.” Subparagraph (B)(ii) includes an
exception for “any violation” if it was due to “reasonable
cause” and if “the amount of the transaction or the balance
in the account at the time of the transaction was properly
reported.” This language indicates that the failure to report
a single transaction, or the balance in a single account,
constitutes a violation.

For violations committed willfully, subparagraph (C)(1)
provides that the maximum penalty is the greater of
$100,000 or 50 percent of an amount determined in
subparagraph (D). Subparagraph (D) sets out two different
amounts. Subparagraph (D)(i) provides that “in the case of
a violation involving a transaction” the relevant amount is
“the amount of the transaction.” Subparagraph (D)(ii)
provides that “in the case of a violation involving a failure to
report the existence of an account or any identifying
information required to be provided with respect to an
account” the relevant amount is “the balance in the account
at the time of the violation.” This language makes clear that
UNITED STATES V. BOYD 27

 

a violation may involve “a failure to report the existence of
an account” or may involve a single transaction.

Reading these provisions together in a straightforward
manner, a “violation” of § 5314 is the same whether the
mens reais willful or not willful: the failure to report a single
account or a single transaction. A person with an interest in
a financial account in a foreign country must report that
relationship to the IRS. The person must provide the report
pursuant to the appropriate procedures, including meeting
the June 30 deadline, and submitting the report on the
appropriate reporting form. 31 U.S.C. § 5314(a), 31 C.F.R.
§§ 1010.350(a), 1010.306(c). The failure to do so is a
violation subject to a civil penalty. If that same person had
an interest in a second financial account in a foreign country,
that person would have the same obligation to report the
second account to the IRS pursuant to the relevant
procedures. The failure to do so would be a second violation,
and that person would be subject to a second civil penalty.

In other words, the applicable statute and regulations
make clear that any failure to report a foreign account is an
independent violation, subject to independent penalties.
Accordingly, the district court did not err in affirming the
IRS’s imposition of penalties against Boyd for each failure
to report a foreign account.

Ii

The majority’s arguments to the contrary do not comport
with the language of the relevant statutes and regulations.

The majority’s primary argument appears to be as
follows. A penalty under § 5321(a) is imposed for a
violation of a provision of §5314. Section 5314
incorporates the regulatory requirements in § 1010.350 and
28 UNITED STATES V. BOYD

 

§ 1010.306. Section 1010.350 requires a person to report
foreign accounts in a reporting form. The majority then
misreads § 1010.306 as requiring the reporting form (rather
than the reports themselves) to be filed before June 30 of
each year. According to the majority, Boyd violated only
the requirement to file the reporting form on time. 31 C.F.R.
§ 1010.306(c). Because Boyd had only one violation—the
failure to timely file the reporting form—only one penalty
can be assessed. Maj. 10-12.

The majority’s analysis is wrong because the majority
conflates the “report” that a person must make, with the
“reporting form” required by the regulations. Contrary to
the majority, there is no language in the relevant statutes or
regulations providing that it “is the failure to file an annual
FBAR that is the violation contemplated and that triggers the
civil penalty provisions of § 5321.” Maj. at 12 n.7 (quoting
United States v. Bittner, 469 F. Supp. 3d 709, 718 (E.D. Tex.
2020)). Rather, as indicated above, the statute and
regulations make clear that the requirement to report an
account and the requirement to file a reporting form are
distinct, and the violation of § 5314 described in § 5321
includes the failure to report the existence of an account
before June 30, as required by § 1010.306(c).

The majority attempts to explain away the language in
§ 5321(a)(5)(B) and (D) indicating that a failure to report the
existence of a single transaction or a single account
constitutes a violation. The majority acknowledges that
language in subparagraph (D), § 5321(a)(5)(D), “explicitly
bases the penalty amount on the balance of any account
willfully misreported or non-reported.”. Maj. at 14
(emphasis added). But the majority argues that Congress
intended a “violation” of § 5314 that is not willful to include
only the failure to file a single reporting form, and intended
UNITED STATES V. BOYD 29

 

a “violation” of § 5314 that is willful to include the failure
to report the existence of each foreign account.

This reasoning fails. The “normal rule of statutory
construction” is that “identical words used in different parts
of the same act are intended to have the same meaning.”
Sullivan v. Stroop, 496 U.S. 478, 484 (1990) (citation
omitted). Nothing in the language of § 5321 suggests that
Congress wanted the word “violation” to have a different
meaning in different subparagraphs. As mentioned above,
even though subparagraphs (B) and (D) refer to different
mens rea, the actus reus (the violation itself) is defined the
same way—as “any violation of, any provision of section
5314”—for violations that are both willful and not willful.
See 31 U.S.C. § 5321(a)(5)(A) (penalty authorized for “any
violation of, any provision of § 5314” that is not willful);
§ 5321(a)(5)(C) (penalty authorized for “any violation of,
any provision of § 5314” that is willful). Moreover, other
language in the statute indicates Congress’s understanding
that a single transaction can constitute a “violation” of a
provision in § 5314. See 31 US.C. §5321(a)(5)(B)(it)
(providing that a violation is excused if it involved a properly
reported “transaction’); § 5321 (a)(5)(D)@) (referring to “a
violation involving a transaction”). Therefore, there is no
basis for defining the word “violation” differently when it is
used in subparagraph (B) than when it is used in
subparagraph (D). If subparagraph (D) explicitly establishes
that the word “violation” refers to the failure to report the
existence of an account, we must use that definition through
the entire section.

The majority acknowledges that the word “violation” in
§ 5321(a)(5)(D)(i1) refers to the conduct of failing to report
the existence of a single account, but claims that the same
word in § 5321(a)(5)(B)(1) refers to the conduct of failing to
30 UNITED STATES V. BOYD

 

file a reporting form. Maj. at 16 n.10. It thus defines
“violation” differently in the two different contexts. In an
effort to brush off this interpretive problem, the majority
claims that it is “simply giv[ing] effect to Congress’s intent
to formulate two different schemes of punishment for willful
and non-willful violations.” Maj. at 16 n.10. But this is not
responsive. While Congress chose to impose different
punishments for willful and non-willful violations, nothing
in the statute suggests that the conduct that violates § 5314
(failing to file a report of an account) changes with the
violator’s mens rea.

Finally, the majority makes the last-ditch argument that
we must strictly construe a tax provision that imposes a
penalty. Maj. at 18-19 (citing Bradley v. United States,
817 F.2d 1400, 1402-03 (9th Cir. 1987) (stating that “a
penalty cannot be assessed unless the words of the provision
plainly impose it,” but affirming a penalty assessed against
an individual who had no legal obligation to pay taxes)). The
majority’s construction of the relevant statutes and
regulations is not “strict”; rather, it is strained and
unpersuasive. Under the most natural reading of the relevant
statutes and regulations, each failure to report a foreign
account is a separate violation. “We are not impressed by
the argument that [any doubtful question] should be resolved
in favor of the taxpayer.” ang Lin Ai v. United States, 809
F.3d 503, 506-07 (9th Cir. 2015) (internal citations and
quotation marks omitted). Rather, “where the rights of
suitors turn on the construction of a [tax] statute .. . itis our
duty to decide what that construction fairly should be,” and
“doubts which may arise upon a cursory examination of [tax
statutes may | disappear when they are read, as they must be,
with every other material part of the statute, and in the light
of their legislative history.” /d. at 507. Therefore, “we do
not mechanically resolve doubts in favor of the taxpayer but
UNITED STATES V. BOYD 31

 

instead resort to the ordinary tools of statutory
interpretation.” /d.

38 3K 3

Boyd violated § 1010.306(c) for each report of a foreign
account that she failed to file before June 30. Because she
failed to file thirteen such reports, she committed thirteen
violations of a provision in § 5314, and the IRS could have
assessed penalties of up to $130,000. See 31 U.S.C.
§ 5321(a)(5)(B). Therefore, it was permissible for the IRS
to assess penalties in the amount of $47,279, and the district
court did not err in granting summary judgment in favor of
the government. By holding otherwise, the majority
misinterprets the relevant statutes and regulations in a
manner that unfairly favors the tax evader. I therefore
dissent.
32

UNITED STATES V. BOYD

 

APPENDIX A
UNITED STATES V. BOYD 33

 

Case: 19-55585, 11/08/2019, ID: 11494907, DktEntry: 17, Page 39 of 48

TD F 90-22.1 REPORT OF FOREIGN BANK OMB No. 1585-2088
(Rev. March 2011) + This Alaport is for Calendar
Department of the Teessury AND FINANCIAL ACCOUNTS Year Endad 12/31
cet ei a cece Do NOT file with your Federal Tax Return —— =
this form : Amended []

 

 

 

Filer Information

2 ~~ Type ot Filer
a Ci individual == bE] Partnership = ¢ L] Corporation = d L) Consolidated ~—e CL] Fiduciary or Other—Enter type

 

 

 

3 U.S. Taxpayer Identification Number] 4 Foreign identification (Complete only if item 3 is not applicable.) 5 individual's Date of Birth
MM/DO/YYYY
a type: C1 passport C] other
If filer has no U.S, Identification
jMurmber, complete |{tern/ At: b Number © Country of Issue
6 Last Name ar Organization Name 7 First Name 8 Middle Initial

 

 

9 Address (Number, Street, and Apt. or Suite Na.)

 

10 City 11 State

a

Zip/Postal Gode 13° Country

 

 

 

 

14 Does the filer have a financial interest in 25 or more financial accounts?
C1 Yes If *Yes” enter total number of accounts
(1€“¥es" is checked, do not complete Part II or Part Ill, but retain records of this information)

 

 

 

 

 

LI No
Elaal ion on Financial A Owned
45 = Maximum value of account during calendar year reported [* Type of account a[_|Bank b[ |Securities ¢[_] Other—Enter type below

 

7 Name of Financial Institution in which account is held

 

48 Account number or other designation | 18 Mailing Address (Number, Street, Suite Number) of financial institution in which account is held

 

20 (City 21° State, if known 22 Zip/Postal Gode, it known | 23 Gountry

 

 

  

 

 

iler Signature 45 Filer Title, if not reporting a personal account 46 Date (MM/DD/YYYY)

 

 

 

File this form with: U.S. Department of the Treasury, P.O. Box 32621, Detroit, Ml 48232-0621

This form should be used to report a financial interest in, signature authority, or other authority over one or more financial accounts in foreign
countries, as required by the Department of tha Treasury Regulations 31 GFR 1010.350 (formerly 31 CFR 103.24). No report is required if the aggregate
value of the accounts did not exceed $10,000, See Instructions For Definitions.

PRIVACY ACT AND PAPERWORK REDUCTION ACT NOTICE

Pursuant to the requirements of Public Law 93-579 (Privacy Act of 1974), notice is hereby given that the authority to collect information on TD F
90-22.1 in accordance with § USC 552a (e) is Public Law 91-508; 31 USC 5314; 5 USC 301; 31 CFR 1010.350 (formerly 34 CFR 103.24).

The principal purpose for collecting the information is to assure maintenance of reports where such reports or records have a high degree of
usefulness in criminal, tax, or regulatory investigations or proceedings. The information collected may be provided to those officers and employees of
any constituent unit of the Department of the Treasury who have a need for the records in the performance of their duties. The records may be referred
to any other department or agency of the United States upon the request of the head of such department or agency for use in a criminal, tax, or
regulatory investigation or proceeding. The information collected may also be provided te appropriate state, local, and foreign law enforcement and
regulatory personnel in the performance of their official duties. Disclosure of this information is mandatory. Civil and criminal penalties, including in
certain circumstances a fine of not more than $500,000 and imprisonment of not more than five years, are provided for failure to file a report, supply
information, and for filing a false or fraudulent report. Disclosure of the Social Security number is mandatory. The authority to collect is 31 CFR
1010.350 (formerly 31 CFR 103.24) . The Social Security number will be used as a means to identify the individual who files the report.

The estimated average burden associated with this collection of information is 20 minutes per respondent or record keeper, depending on individual
circumstances. Camments regarding the accuracy of this burden estimate, and suggestions for reducing the burden should be directed to the Internal
Revenue Service, Bank Secrecy Act Policy, 5000 Ellin Road C-3-242, Lanham MD 20706.

 

Cat. Ne. 12996D Form TD F 90-22.1 (Rev. 3-2011)

37
34

UNITED STATES V. BOYD

 

Case: 19-55585, 11/08/2019, ID: 11494907, DktEntry: 17, Page 40 of 48

 

Continued—Information on Financial Account(s) Owned Separately
Complete a Separate Block for Each Account Owned Separately

 

This side can be copied as many times as necessary in order to provide information an all accounts,

Form TD F 90-22.1
Page Nuniber

of

 

 

1 Filing for nalendar 3-4 Check appropriate Identification Number

ear
7 [J] Taxpayer Identification Number

(1 Foreign Identification Number

Enter identification number here:

 

6 Last Name ar Organization Name

 

48 Maximum value of account during calendar year reported

16 Typeof account a[_|Bank b[ |Securities c[_] Other—Enter type below

 

17 Name of Financial Institution in which account is held

18 Account number or other designation

19 Mailing Address (Number, Street, Suite Number) of financial institution in which account is held

 

20 Gity 21 State, if known

22 Zip/Postal Code, if known | 23 Country

 

15 Maximum value of account during calendar year reported

16 Typeof account a[_|Bank b[_] Securities ¢ [_] Other—Enter type below

 

47 Name of Financial Institution in which account is held

 

18 Accounl number or uther designation

19 Mailing Address (Number, Slreel, Suite Number) of financial institution in which account is held

 

20 Gity 21° State, if known

22 Zip/Postal Code, if known | 23 Country

 

18 Maximum value of account during calendar year reported

16 Typeofaccount a[ |Bank b[ |Securities c[ | Other—Enter type below

 

47 Name of Financial Institution in which account is held

 

18 Account number or other designation

19° Mailing Address (Number, Street, Sutte Number) of financial institution in which account is held

 

20 City 21 State, if known

22 Zip/Postal Code, ifknown | 23 Country

 

15 Maximum value of account during calendar year reported

18 Type of account a[_]Bank b[_] Securities 6 [_] Other—Enter type below

 

17 Name of Financial Institution in which account is held

 

48 Account number or other designation

19 Mailing Address (Number, Street, Suite Number) of financial institution in which account is held

 

20 City 21° State, if known

22 Zip/Postal Code, if known | 23 Country

 

15 Maximum value of account during calendar year reported

46 Typeofaccount al ]Bank b[_]Securties c[_] Other—Enter type below

 

17 Name of Financial Institution in which account is held

 

18 — Account number or other designation

19 Mailing Address (Number, Street, Suite Number) of financial institution in which account is held

 

20 City 21° State, if known

22 Zip/Postal Code, if known | 23 Country

 

18 Maximum value of accaunt during calendar year reported

17 Name of Financial Institution In which account is held

 

16 Typeof account a{_]Bank b[ Securities c [_] Other—Enter type below

 

18 Account number or other designation

20 City 21 State, if xnown

 

19° Mailing Address (Number, Street, Suite Number) of financial institution in which account is held

22 Zip/Postal Code, it known | 25 Couniry

 

Forn TD F 90-22.1 (Rev. 3-2011]

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(3) An officer or employee of an Authorized Service Provider is nat
required to report signature authority over a foreign financial account
that is owned or maintained by an invastment company that is
registered with the Securities and Exchange Commission. Authorized
Service Provider means an entity that is registered with and examined
by the Securitiss and Exchange Commission and provides services to
an investment company registered under the Investment Company Act
of 1940,

(4) An officer or employee of an entity that has a class of equity
securities listed (or American depository receipts listed) on any United
States national securities exchange is not required ta report signature
authority over a foreign financial account of such entity.

{§) An officer or employee of a United States subsidiary is not required
to report signature authority over a foreign financial account of the
subsidiary if its United States parent has a class of equity securities
listed on any United States national securities exchange and the
subsidiary is included in a consolidated FBAR report of the United
States parent.

(6) An officer or employee of an entity that has a class of equity
securities registered (or American depository receipts in respect of
equity securities registered) under section 12(g) of the Securities
Exchange Act is not required to report signature authority over a foreign
financial account of such entity.

Trust Beneficiaries. A trust beneficiary with a financial interest
described in section (2) of the financial interest definition is not
required to report the trust's foreign financial accounts on an FBAR if
the trust, trustee of the trust, or agent of the trust: (1) is a United States.
person and (2) files an FBAR disclosing the trust's foreign financial
accounts.

United States Military Banking Facility. A financial account maintained
with a financial institution located on a United States military installation
is not required to be reported, even if that military installation is outside
of the United States.

Filing Information

When and Where to File. The FBAR is an annual report and must be
received by the Department of the Treasury on or before June 30th of
the year following the calendar year being reported. Do Not file with
federal income tax return.
Fila by mailing to:
Department of the Treasury
Post Office Box 32621
Detroit, Ml 48232-0621
If an express delivery service is used, file by mailing to:
IRS Enterprise Computing Genter
ATTN: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, Mi 48226
The FBAR may be hand delivered to any local office of the Internal
Revenue Service for forwarding to the Department of the Treasury,
Detroit, MI. The FBAR may also be delivered to the Internal Revenue
Service's tax attaches located in United States embassies and
consulates for forwarding to the Department of the Treasury, Detroit, MI.
The FBAR is not considered filed until it is received by the Department
of the Treasury in Detroit, MI.
No Extension of Time to File. There is no extension of time available
for filing an FBAR. Extensions of time to file federal tax returns do NOT
extend the time for filing an FBAR. If a delinquent FBAR is filed, attach a
statement explaining the reason for the late filing.
Amending a Previously Filed FBAR. To amend a filed FBAR, check the
“Amended” box in the upper right hand corner of the first page of the
FBAR, make the needed additions or corrections, attach a statement
explaining the additions or corrections, and staple a copy of the original
FBAR to the amendment. An amendment should not be made until at
least 90 calendar days after the original FBAR is filed. Follow the
instructions in “When and Where to File” to file an amendment.
Record Keeping Requirements. Persons required to file an FBAR must
retain records that contain the name in which each account is
maintained, the number or other designation of the account, the name
and address of the foreign financial institution that maintains the
account, the type of account, and the maximum account value of each
account during the reporting period. The records must be retained for a

period of 5 years fram June 30th of the year following the calendar year
reported and must be available for inspection as provided by law.
Retaining a copy of the filed FBAR can help to satisfy the record
keeping requirements.

An officer or employee whe files an FBAR to report signature authority
over an employer's foreign financial account is not required to
personally retain records regarding these accounts.

Questions. For questions regarding the FBAR, contact the Detroit
Computing Center Hotline at 1-800-800-2877, option 2.

Explanations for Specific Items

Part | — Filer Information

Item ?. The FBAR is an annual report. Enter the calendar year being
reported. If amending a previously filad FBAR, check the “Amended”
box.

Item 2. Check the box that describes the filer. Check only ona box.
Individuals reporting only signature authority, check box “a”. If filing a
consolidated FBAR, check box "d". To determine if a consolidated
FBAR can be filed, see Part V. If the type cf filer is not listed in boxes “a”
through "c", check box “e”, and enter the type of filer. Persons that
should check box “e” include, but are not limited to, trusts, estates,
limited liability companies, and tax-exempt entities (even if the entity is
organized as a corporation). 4 disregarded entity must chack box “a”,
and enter the type of entity followed by "(D.E.)". For example, a limited
liability company that is disregarded for United States federal tax
purposes would enter “limited liability company (D.E.)”.
Item 3. Provide the filer's United States taxpayer identification number.
Generally, this is the filer's United States social security number (SSN),
United States individual taxpayer identification number (ITIN), or
employer identification number (EIN). Throughout the FBAR, numbers
should be entered with no spaces, dashes, or other punctuation. If the
filer does NOT have a United States taxpayer identification number,
complete Iter 4.
Kem 4. Complete Item 4 only if the filer does NOT have a United States
taxpayer identification number. Item 4 requires the filer to provide
information from an official foreign government document to verify the
filer's nationality or residence. Enter the dacument number followed by
the country of issuance, check the appropriate type of document, and if
“other” is checked, provide the type of document.
Item 5. If the filer is an individual, enter the filer's date of birth, using the
month, day, and year convention.
Items 9, 10, 11, 12, and 13. Enter the filer's address. An individuai
residing in the United States must enter the street address of the
individual's United States residence, not a post office box. An individual
residing outside the United States must enter the individual's United
States mailing address. If the individual does not have a United States
mailing address, the individual must enter a foreign residence address.
An entity must enter its United States mailing address. If the entity does
not have a United States mailing address, the entity must enter its
foreign mailing address.
Item 14, If the filer has a financial interest in 25 or more foreign financial
accounts, check "Yes" and enter the number of accounts, Do not
complete Part II or Part Ill of the FBAR, If filing a consolidated FBAR,
only complete Part V, Items 34-42, for each United States entity
included in the consolidated FBAR.
Note. If the filer has signature authority over 25 or more foreign financial
accounts, only complete Part IV, Items 34-43, for each person for which
the filer has signature authority, and check “No” in Part |, Item 14.

Filers must comply with applicable recording keeping requirements.
See Record Keeping Requirements.

 

Part II — Information on Financial Account(s) Owned
Separately

Enter information in the applicable parts of the form only. Number the
pages used, and mail only those pages. If there is nat enough space to
provide all account information, copy and complete additional pages of
the required Part as necessary. Do not use any attachments unless
otherwise specified in the instructions.

39
36 UNITED STATES V. BOYD

 

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Item 15. Determining Maximum Account Value.

Step 1. Determine the maximum value of each account (in the currency
of that account) during the calendar year being reported. The maximum
value of an account is a reasonable approximation of the greatest value
of currency cr nonmonetary assets in the account during the calendar
year. Periodic account statements may be refied on to determine the
maximum value of the account, provided that the statements fairly
reflect the maximum account value during the calendar year. For Itam
15, if the filer had a financial interest in more than one account, each
account must be valued separately.

Step 2. In the case of non-United States currency, convert the
maximum account value far each account into United States dollars.
Convert foreign currency by using the Treasury's Financial Management
Service rate (this rate may be found at www.fms.treas.gov) from the last
day of the calendar year. If no Treasury Financial Management Service
rate is available, usa another verifiable exchange rate and provide the
source of that rate. In valuing currency of a country that uses multiple
exchange rates, use the rate that would apply if the currency in the
account were converted into United States dollars an the jast day of the
calendar year.

If the aggregate of the maximum account values exceeds $10,000, an
FBAR must be filed. An FBAR is not required to be filed if the person did
not have $10,000 of aggregate value in foreign financial accounts at any
time during the calendar year.

For United States persons with a financial interest in or signature
authority over fewer than 25 accounts that are unable to determine if the
aggregate maximum account values of the accounts exceeded $10,000
at any time during the calendar year, complete Part Il, Ill, IV, or V, as
appropriate, for each of these accounts and enter “value unknown” in
Item 16.

Item 16. Indicate the type of account. Check only one box. if “Other” is
selected, describe the account.

tem 17, Provide the name of the financial institution with which the
account is held.

Item 18. Provide the account number that the financial institution uses.
to designate the account.

Items 19-23. Provide the complete mailing address of the financial
institution where the account is located. If the foreign address does not
include a state (e.g.. province) or postal code, leave the box(es) blank.

Part Ill — Information on Financial Account(s) Owned
Jointly

Enter information in the applicable parts of the form only. Number the
pages Used, and mail only those pages. If there is not enough space to
provide all account information, copy and complete additional pages of
the required Part as necessary. Do not use any attachments unless
otherwise specified in the instructions.

For Items 15-23, see Part ll. Each joint owner must report the entire
value of the account as determined under Item 15.

Item 24, Enter the number of joint owners for the account. If the exact
number is not known, provide an estimate. Do not count the filer when
determining the number of joint owners.

Items 25-93. Use the identifying information of the principal joint owner
{excluding tho filer) to completa Items 25 38, Leave blank items for
which no information is available. If the filer's spouse has an interest in a
jointly owned account, the filer's spouse is the principal joint owner.
Enter "(spouse)" on line 26 after the last name of the joint spousal
owner. See Exceptions, Certain Accounts Jointly Owned by Spouses, to
determina if the filer's spouse is required to independently report the
jointly owned accounts.

Part IV — Information on Financial Account(s) Where
Filer has Signature Authority but No Financial Interest
in the Account(s)

Enter information in the applicable parts of the form only. Number the
pages Used, and mall only those pages. If there ts nat enough space to
provide all account information, copy and compiste additional pages of
the required Part as necessary, Do not use any attachments unless:
otherwise specified in the instructions.

25 or More Foreign Financial Accounts. Filers with signature authority
over 25 or more foreign financial accounts must complete only Items
34-49 for each person on whose behalf the filer has signature authority.

Moditied Reporting for United States Persons Residing and
Employed Qutside of the United States. A United States person who
(1) resides outside of the United States, (2) is an officer or employee of
an employer who is physically located outside of the United States, and
(3) has signature authority over a foreign financial account that is owned
or maintained by the individual's employer should only complete Part |
and Part IV, Items 44-43 of the FBAR. Part IV, Items 34-43 should only
be completed one time with information about the individual's employer.

For Items 15-23, see Part ll.

Items 34-42, Provide the name, address, and identifying number of the
owner of the foreign financial account for which the individual has
signature authority over but no financial interest in the account. If there
is more than one owner of the account for which the individual has
signature authority, provide the information in Items 34-42 for the
principat joint owner (excluding the filer). If account information is
completed for more than one account of the same owner, identify the
owner only once and write "Same Owner” in Item 34 for the succeeding
accounts with the same owner.

Item 43, Enter filer's title for the position that provides signature
authority (6.g., treasurer).

 

Part V — Information on Financial Account(s) Where
Corporate Filer Is Filing a Consolidated Report

Enter information in the applicable parts of the fonn only. Number the
pages used, and mail only those pages. If there is nct enough space to
provide all account information, copy and complete additional pages of
the required Part as necessary. Do not use any attachments unless
otherwise specified in the instructions.

Who Can File a Consolidated FBAR. An entity that is a United States
persan that owns directly or indirectly a greater than 50 percent interest
in another entity that is required to file an FBAR is permitted to file a
consolidated FBAR on behalf of itself and such other entity. Check box
“d” in Part |, Item 2 and complete Part V. If filing a consolidated FBAR
and reporting 25 or more foreign financial accounts, complete only
Items 34-42 for each entity included in the consolidated FBAR.

For Items 15-23, see Part il.

Items 34-42, Provide the name, United States taxpayer identification
number, and address of the owner of the foreign financial account as.
shown on the books of the financial institution, If account information is
completed for more than ane account of the same owner, identify the
owner only once and write "Sarme Owner” in Item 34 for the succeeding
accounts of the same owner.

Signatures

items 44-46, The FBAR must be ed by the filer named in Part |. tf
the FBAR is being filed on behalf of a partnership, corporation, limited
liability company, trust, estate, or other entity, it must be signed by an
authorized individual. Enter the authorized individual's title in Itern 45.

An individual must leave “Filer's Title” blank, unless the individual is
filing an FBAR dus to tha individual's signature authority. If an individual
is filing because the individual has signature authority over a foreign
financial account, the individual should enter the title upon which his or
her authority is based in Item 45.

Aspouse included as a joint owner, who does not file a separate
FBAR in accordance with the instructions in Part Ill, must also sign lhe
FBAR (in Item 44) for the jointly owned accounts. See the instructions
for Part III.

 

 

Penalties

A person wha is requited to file an FAR and fails to properly file may
be subject to a civil penalty not to excead $10,000. If there is reasonable
cause for the failure and the balance in the account is properly reported,
no penalty will be imposed. A person who wilifully falls to report an
account or account identifying information may be subject to a civil
monetary penalty equal to the greater of $100,000 or 50 percent of the
balance in the account at the time of the violation. See 31 U.S.C. section
532 1(a)(6). Willful violations may also be subject to criminal penalties
under 31 U.S.C. section 5322(a), 31 U.S.C. section 5322(b), or 18 U.S.C.
section 1001

40
UNITED STATES V. BOYD

37

 

APPENDIX B
38 UNITED STATES V. BOYD

 

Appendix B

31 U.S. Code § 5314. Records and reports on foreign financial agency transactions

(a)Considering the need to avoid impeding or controlling the export or import of monetary
instruments and the need to avoid burdening unreasonably a person making a transaction with a
foreign financial agency, the Secretary of the Treasury shall require a resident or citizen of the
United States or a person in, and doing business in, the United States, to keep records, file
reports, or keep records and file reports, when the resident, citizen, or person makes a transaction
or maintains a relation for any person with a foreign financial agency. The records and reports
shall contain the following information in the way and to the extent the Secretary prescribes:
(1)the identity and address of participants in a transaction or relationship.

(2)the legal capacity in which a participant is acting.

(3)the identity of real parties in interest.

(4)a description of the transaction.

(b)The Secretary may prescribe—

(1a reasonable classification of persons subject to or exempt from a requirement under this
section or a regulation under this section;

(2)a foreign country to which a requirement or a regulation under this section applies if the
Secretary decides applying the requirement or regulation to all foreign countries is unnecessary
or undesirable;

(3)the magnitude of transactions subject to a requirement or a regulation under this section;
(4)the kind of transaction subject to or exempt from a requirement or a regulation under this
section; and

(5)other matters the Secretary considers necessary to carry out this section or a regulation under
this section.

{c)A person shall be required to disclose a record required to be kept under this section or under
a regulation under this section only as required by law.

31 U.S. Code § 5321. Civil penalties

(a)

(5)Foreign financial agency transaction violation —

{A)Penalty authorized —

The Secretary of the Treasury may impose a civil money penalty on any person who violates, or
causes any violation of, any provision of section 5314.

(B)Amount of penalty —

(i)In general —

Except as provided in subparagraph (C) [willful violations], the amount of any civil penalty
imposed under subparagraph (A) shall not exceed $10,000.
UNITED STATES V. BOYD 39

 

(ii)Reasonable cause exception —No penalty shall be imposed under subparagraph (A) with
respect to any violation if—

(Dsuch violation was due to reasonable cause, and

([)the amount of the transaction or the balance in the account at the time of the transaction was
properly reported.

(C)Willful violations —In the case of any person willfully violating, or willfully causing any
violation of, any provision of section 53 14—

(ithe maximum penalty under subparagraph (B)(i) shall be increased to the greater of—
(D$100,000, or

(1D50 percent of the amount determined under subparagraph (D), and

(ii)subparagraph (B){ii) shall not apply.

(D)Amount—The amount determined under this subparagraph is—

{i)in the case of a violation involving a transaction, the amount of the transaction, or

(ii)in the case of a violation involving a failure to report the existence of an account or any
identifying information required to be provided with respect to an account, the balance in the
account at the time of the violation.

31 CFR § 1010.306 - Filing of reports.

{c) Reports required to be filed by § 1010.350 shall be filed with FinCEN on or before June 30 of
each calendar year with respect to foreign financial accounts exceeding $10,000 maintained
during the previous calendar year.

(d) Reports required by § 1010.311, § 1010.313, § 1010.340, § 1010.350, § 1020.315, §

1021.311 or § 1021.313 of this chapter shall be filed on forms prescribed by the Secretary. All
information called for in such forms shall be furnished.

(e) Forms to be used in making the reports required by § 1010.311, § 1010.313, § 1010350, §
1020.315, § 1021.311 or § 1021.313 of this chapter may be obtained from BSA E-Filing System.
Forms to be used in making the reports required by § 1010.340 may be obtained from the U.S.
Customs and Border Protection or FinCEN.

31 CFR § 1010.350 - Reports of foreign financial accounts.

(a) In general. Each United States person having a financial interest in, or signature or other
authority over, a bank, securities, or other financial account in a foreign country shall report such
relationship to the Commissioner of Internal Revenue for each year in which such relationship
exists and shall provide such information as shall be specified in a reporting form prescribed
under 31 U.S.C. 5314 to be filed by such persons. The form prescribed under section 53 14 is the
Report of Foreign Bank and Financial Accounts (TD-F 90-22.1), or any successor form. See
paragraphs (g)(1) and (g){2) of this section for a special rule for persons with a financial interest
in 25 or more accounts, or signature or other authority over 25 or more accounts.