9th Circuit Holds That Copy of Unfiled Return Delivered to Examining Agent is Filing of Return for Statute of Limitations Purposes (5/12/22)

In Seaview Trading, LLC v. Commissioner, ___ F.4th ___,  (9th Cir. 5/11/22), CA 9 here and GS here [to come], the Court (majority panel) held that filing for starting a relevant statute of limitations (there TEFRA § 6229(a), for partnership return) is (from the summary)

when (1) an IRS official authorized to obtain and receive delinquent tax returns informs a partnership that a tax return is missing and requests that tax return, (2) the partnership responds by giving the IRS official the tax return in the manner requested, and (3) the IRS official receives the tax return, then the partnership has "filed" a tax return for purposes of § 6229(a).

The relevant facts and law, highly summarized, are: (1) pursuant to the regulations and procedures, the partnership return was required to be filed timely at the relevant IRS service center; (2) the IRS service center did not receive a timely filed 2001 partnership return; (3) the partnership did not timely file (or could not prove that it timely filed) an original 2001 partnership return (see JAT Note #2 below); (4) the IRS in due course audited the partnership for 2001; (5) in the course of the audit, the IRS agent requested and received a copy of the 2001 partnership return and had that copy in his possession by January 2006; and (6) in October 2010 (more than three years after the agent had the return in his possession for use in the audit), the IRS issued the partnership FPAA, noting that no return was filed but that a copy of the return was provided "during the examination;" the FPAA reduced the reported loss of $35 million to zero. [As an aside, likely a bullshit tax shelter, but that is only inference from the large loss disallowed.]

The partnership filed a petition in the Tax  Court. The Tax Court held that "(1) Seaview did not "file" the tax return by faxing a copy to the IRS revenue agent or by mailing a copy to the IRS counsel, and (2) in any case, the copies of the 2001 Form 1065 sent to the IRS in 2005 and 2007 were not "returns." Seaview and the IRS then settled all their disputes but preserved Seaview's right to appeal the Tax Court's denial of summary judgment."

The issue was whether a return (said to be a copy of the original return) delivered to an agent in the audit was a delinquent filing or whether the delinquent return must be filed with the service center. The Court held that the regulations requiring filing with the service center applied only to timely filed returns, that there are no regulations applying to filing delinquent returns and that "no IRS regulation prohibits the filing of untimely returns with a requesting IRS official." Based on that, the Court held "we hold that a delinquent partnership return is "filed" under § 6229(a) when an IRS official authorized to obtain and process a delinquent return asks a partnership for such a return, the partnership delivers the return to the IRS official in the manner requested, and the IRS official receives the return."

Continuing Legal Education - On the Dubitante Opinion (5/4/22)

I updated my legal education today in reviewing a “dubitante” opinion on the issue of prosecutorial immunity. Wearry v. Foster, ___ F.4^th ___, ___, Slip Op. 20 (5^th Cir. 5/3/22), Ho, dubitante, here. The subject of the majority opinion is outside the area of tax procedure, but the dubitante opinion can be issued in any legal context. So, I write about this gap filled in my legal education. (I am somewhat comforted on my ignorance in that a law review article notes that “Judges rarely write dubitante opinions or use the term, and informal polling suggests not many legal scholars are aware of the practice. “  Jason J. Czamezki, The Dubitante Opinion, 39 Akron L. Rev. 1 (2006), here (this is a good resource for more than most would want to know about dubitante opinions).

One place I often turn to first (but not last) on things that are either new to me or fuzzy to me is Wikipedia. The Wikipedia on the dubitante opinion is here. I liked the following by Judge Friendly, a giant among appellate judges, in  Feldman v. Allegheny Airlines, Inc., 524 F.2d 384, 393 (2d Cir. 1975): "Although intuition tells me that the Supreme Court of Connecticut would not sustain the award made here, I cannot prove it. I therefore go along with the majority, although with the gravest doubts."

Supreme Court Decides Time Limit to Petition Tax Court CDP Determination is Nonjurisdictional and Subject to Equitable Tolling (4/21/22; 4/25/22)

In Boechler, P.C. v. Commissioner, 583 U.S. ___, 2022 U.S. LEXIS 2095  (2/21/22), here,  the Court held that “Section 6330(d)(1)’s 30-day time limit to file a petition for review of a collection due process determination is a nonjurisdictional deadline subject to  equitable tolling.” (From the Syllabus.)  The holding is based on a close reading of § 6330(d)(1) and the notion that for jurisdictional status or prohibition of equitable tolling, an express or clear statement is required, which this statute lacks. And, it seems that even nonjurisdictional time limits may not be equitably tolled if there is some reason in the text to conclude that. (I am not sure equitable tolling is separate from the nonjurisdicitional conclusion, but the Court seems to think so. E.g., Slip Op. 8, “Of course, the nonjurisdictional nature of the filing deadline does not help Boechler unless the deadline can be equitably tolled.”)

Other than permitting equitable tolling for § 6330(d)(1)’s time limit, I am not sure the opinion offers any broader important lessons. However, the opinion does state (Slip Op. 14-15):

Finally, the broader statutory context confirms the lack of any clear statement in §6330(d)(1). Other tax provisions enacted around the same time as §6330(d)(1) much more clearly link their jurisdictional grants to a filing deadline. See 26 U. S. C. §6404(g)(1) (1994 ed., Supp. II) (the Tax Court has “jurisdiction over any action . . . to determine whether the Secretary’s failure to abate interest under this section was an abuse of discretion, . . . if such action is brought within 180 days”); §6015(e)(1)(A) (1994 ed., Supp. IV) (“The individual may petition the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate  relief available to the individual under this section if such petition is filed during the 90-day period”). These provisions accentuate the lack of comparable clarity in §6330(d)(1).

So, I guess we know what the answer is for those provisions.

Chevron Spinning Uses and Abuses (4/20/22; 4/21/22)

Yesterday, I said that I would post something today on the legislative/interpretative distinction forming a key element of the decision I discussed.  On The Further Weaponization of the APA and Chevron Deference (Federal Tax Procedure Blog 4/19/22), here.  I noted that the Judge and the parties assumed that the regulation in issue was legislative.  If the regulation really is legislative for APA purposes, then it requires either notice and comment before becoming effective or, if effective immediately, then a good cause statement.  The Court held that the regulation had not been subject to notice and comment and the good cause statement was inadequate.  Hence, the regulation was invalid.

The statute in question provides (42 USC § 264(a) as quoted in the opinion):

The [CDC], with the approval of the [Secretary of Health and Human Services], is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession. For purposes of carrying out and enforcing such regulations, the [CDC] may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.

The question was the validity of the mask mandate under this statute. The regulation was based on an interpretation of the statute.  The Judge said that the words of the statute, properly interpreted, did not support the mask mandate.  That’s an interpretive issue.  At least, I think, it is interpretive enough to justify me posting something on the APA legislative/interpretive distinction.  

On The Further Weaponization of the APA and Chevron Deference (4/19/22)

In Health Freedom Defense Fund, Inc. v. Biden, 2022 U.S. Dist. LEXIS 71206 (M.D. Fla. 4/18/22), CL here, the Court (Judge Kathryn Kimball Mizelle, Wikipedia here) invalidated a Centers for Disease Control regulation requiring travelers to wear masks in transportation hubs.  The opinion refers to this as the “Mask Mandate,” an apt description, so I will use it.  The Court applied a straightforward APA analysis (whether it did so correctly is another question).  That analysis proceeds as follows: 

First, the Court determines that the rigorous interpretation of the relevant statutory text, now in vogue at Chevron’s Step One, indicates that the “best interpretation” of the governing statute is that CDC does not have the power it purported to exercise. 

Second, the Court (pp. 25-26) rejects the argument that the agency interpretation could trump the court's best interpretation of the statute.  The Court explains:  “Chevron deference requires that courts defer to an agency interpretation of a statute that the agency administers when the statute is ambiguous and the interpretation is reasonable.”  But, based on its textual interpretation, the Court found no ambiguity necessary for agency interpretive space, thus rejecting the application of Chevron.   

As an alternative, the Court invokes (pp. 26-31) the major questions doctrine, which requires that Congress speak clearly as to the agency’s authority on systemically important issues, and it had not done so.  

Is Statutory Interpretation a Legislative Act When Agencies Do It But Not When Courts Do It? (4/8/22)

I recently wrote on the Sixth Circuit’s important decision in Oakbrook Land Holdings, LLC v. Commissioner, ___ F.4th ___ (6th Cir. 3/14/22), CA9 here and GS here. See Sixth Circuit Creates Circuit Conflict with Eleventh Circuit on Conservation Easement Regulations (Federal Tax Procedure Blog 3/15/22).  I was reading today Bryan Camp’s great discussion on this case in Lesson From The Tax Court: Penalty Approval In Conservation Easement Cases (Tax Prof Blog 4/4/22), here.  In concluding the post, Professor Camp offered this comment:

Comment: I said Judge Guy’s concurrence in Oakbrook was “ironic.”  Here's why.  Judge Guy thought the regulation was what is called a "legislative" regulation and was not an "interpretive" regulation.  While Treasury had followed the proper APA process for issuing an interpretive regulation, that process was not proper for issuing a legislative regulation.  So Judge Guy said the regulation was inoperative because it had not been validly issued.  Ok so far.  But then Judge Guy ends up construing (oh! dare I say "interpreting") the statutory language at issue.  The irony here is that Judge Guy totally agrees with the regulation on how the term “perpetuity” in the statute should be interpreted.  So the taxpayer loses.  But I doubt Judge Guy would say he was “legislating” from the bench!  Nah!  He was just “interpreting.”  Cuz that's what a court does, doncha know. Thus the irony: when Treasury does the same thing as a Court does in a regulation suddenly it’s a legislative act and not an interpretive act.  But when the Court does it, it’s just...well...interpretation.  Go figure.

This caught my attention because that precise point has bothered me.  As I note in my article, central to Professor Hickman’s argument that Treasury regulations which do no more than interpret ambiguous statutory text are legislative regulations.  This argument is embraced in many court opinions.  Indeed that is the argument I tilt against in my article John A. Townsend, The Report of the Death of the Interpretive Regulation Is an Exaggeration (SSRN last revised 12/15/21), here..  I address Professor Camp’s point at several places in my article, but the following are two most pertinent here:

First, pp. 5-6, footnotes omitted and emphasis supplied):

    At a high level, the key difference I have with Professor Hickman’s claim hinges upon whether regulations that only interpret statutory text within the range of reasonable interpretations of the statute from enactment of the statute are  legislative regulations rather than interpretive regulations. Professor Hickman claims that interpreting is legislating. If that claim is true, regulations that only interpret statutory text are legislative, must be adopted with Notice and Comment, and must be prospective in application. My opposing claim is that such Treasury regulations are interpretive regulations which the APA specifically exempts from the Notice and Comment requirement although they may be adopted with Notice and Comment (and usually are by the Treasury) and can apply retroactively. The interpretations in such regulations operate within the same interpretive space as judicial opinions. When courts interpret, they are not legislating, for our constitution does not authorize courts to legislate. When agencies interpret within that interpretive space pursuant to explicit or implicit authority to interpret ambiguous statutory text, they also are not legislating.

Court Invalidates Regulation for Invalidity of Good Cause Statement (4/6/22)

In Liberty Global, Inc. v. United States (D. Colo. Dkt. 1:20-cv-03501-RBJ #46 Order dtd. 4/4/22), CL here and GS here, the Court granted summary judgment to Liberty Global holding IRS temporary regulations on § 245A invalid for not undertaking notice and comment before the effective date.  (The docket entries and pleadings on the motion are available on Courtlistener here.)  I am not so much concerned about the substantive issue of whether Liberty Global owes the tax in question.  I am concerned about what I perceive as lack of sound analysis on the APA issues by parties and, as a result, by the Court.

Basically, the Court held that:

1.  The regulation in issue was a legislative regulation, apparently without analysis of the issue because “the parties do not dispute that the temporary regulations are legislative rules.”  (Slip Op. 9.)

2. As a legislative regulation issued with a statement of good cause for immediate effect, the good cause statement was not persuasive; therefore the temporary regulation did not have immediate effect.

3. Implicit in #2 was that, if the good cause statement were valid, the temporary regulation could have not only been effective immediately upon promulgation but there was still the issue of whether good cause immediate effect would permit retroactivity under § 7805(b)(2) (although that may be implicit).

I think the Court’s holdings are consistent with mainstream judicial and scholarly current thinking.  As readers of this blog know, I part company with mainstream current thinking on key premises relevant to this discussion.  I provide key relevant points of departure, but those wanting detailed analysis can find it in John A. Townsend, The Report of the Death of the Interpretive Regulation Is an Exaggeration (SSRN last revised 12/15/21), here.

On Tax Exceptionalism and Deference (4/3/22)

Yesterday in a blog on Chevron deference here, I stated in the first sentence that that the claim of tax exceptionalism was a false claim.  I included my reason for saying it was a false claim as a Postscript to that blog, but have decided to pull it out and make it a separate blog entry.  

A major component for that claim of tax exceptionalism was that there was a difference in deference for tax interpretations and deference for other agency interpretations.  Starkly, the claim was that Chevron deference to all other agency interpretations did not apply to tax interpretations.  Just stating that starkly should make one suspicious of the claim because Congress never did anything that justified the claim, and the Supreme Court never articulated the claim; when the Supreme Court did address the claim in 2011, it squarely rejected it.  Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44 (2011).  I also had anticipated the Mayo holding outcome in my pre-Mayo Federal Tax Procedure Books, e.g., the 2010 edition p. 59 here, where I conclude “My feeling is that the courts will ultimately reach consensus (perhaps enforced by the Supreme Court) that Chevron does apply, but the issue may be academic only in most cases since the two standards for deference would likely produce the same results.”

            I have recently written on the myth of tax exceptionalism in my article above, here, at pp. 67-70 which I quote here without the footnotes. (But remember  that the detail (the writing substitute for detail) is in the footnotes; to see the text and footnote, click here.)

                        10.      The Myth of Tax Exceptionalism.

            So-called “tax exceptionalism” has also crept into the discussion, at least as regards tax rulemaking and its imagined distinction from rulemaking by other agencies.  The notion, much bandied about for many years, is that IRS administration of the tax law was somehow outside the ambit of administrative law rules (including the APA) that applied to other federal agencies.  If not outside, then IRS administration was at least subject to peculiar applications of administrative law. In a recent case, quoting an article co-authored by Professor Hickman, the Sixth Circuit alleged in the conclusion to the majority opinion that Treasury and the IRS “do not have a great history of complying with APA procedures, having claimed for several decades that their rules and regulations are exempt from those requirements.”  That claim is based on Professor Hickman’s claim addressed in this article that interpretive regulations are legislative regulations so that the use of Temporary Regulations for immediate effect and presumably even retroactive effect for interpretations is not in compliance with the APA.  That allegation, the core of tax exceptionalism, is false which may explain why, although a central feature of the Sixth Circuit opinion, neither the parties nor Professor Hickman as amicus repeated the allegation in their briefs before the Supreme Court, and the Supreme Court judiciously did not repeat it.

Is Chevron on Life Support; Does It Matter? (4/2/22; 4/3/23)

In teaching tax procedure for many years, I introduced my students to Chevron deference while discussing the false claim of “tax exceptionalism.” I define Chevron deference as a court deferring to an agency statutory interpretation that is less persuasive than the interpretation determined by the court. After all, if a court determines that the agency interpretation is the best interpretation, it does not defer to the agency interpretation. In a recent article titled  See John A. Townsend, The Report of the Death of the Interpretive Regulation Is an Exaggeration (SSRN last revised 12/15/21), here, I addressed the key feature for Chevron deference, the continued existence of the APA interpretive regulation category.  As a Postscript to that article I dug in deeper on Chevron deference.  Readers can view that Postscript separately here. In the Postscript, I review my evolved thoughts on Chevron, developing analytical Categories for potential deference to agency interpretations.  (Those Categories are below.)  I inferred that Chevron deference to lesser agency interpretations is rarely outcome determinative. I base my inference on how I understand judges work (do they really apply less persuasive interpretations if they can avoid it?) and my reading of many cases citing Chevron.

An author posted an empirical analysis of cases where he identified 56 Federal Courts of Appeals cases as “granted Chevron deference” for the year ended November 30, 2021. Damonta D. Morgan, Chevron’s New Step Zero?: Measuring the Impact of Justice Gorsuch’s “Pecuniary Interest” Query (Notice and Comment 1/4/22), here. Mr. Morgan graciously shared his data set and permitted me to use it to test my inference.

I used the Categories to identify which cases in Mr. Morgan’s dataset involve deference to lesser agency interpretations. My categorization of the cases is in the table linked here; and explanations for the Categories assigned in the table are here [Note: the linked file when this blog was originally published was the wrong one; on 4/3/22 at 1:30 pm, I posted the correct linked file.] The aggregate results by Category are:

 

Category 0 - Cannot characterize but no deference; some could be like Chevron Step 0; this Category was not in the Postscript.	8
Category 1 - Statute unambiguous with no interpretive space for agency interpretation; no deference.	2
Category 2 - Statute ambiguous; no agency interpretation; court interprets; no deference	0
Category 3 - Court determines agency interpretation is best interpretation and applies it; no deference	8
Category 4 - Court determines agency interpretation unreasonable & applies the court's better interpretation; no deference	2
Category 5 - Court determines agency interpretation is reasonable but not best interpretation and defers to the agency interpretation anyway; deference (only category where court expressly deferred to a less reasonable agency interpretation)	0
Category 6 - Court determines agency interpretation is reasonable but makes no determination of best interpretation; applies agency interpretation; inconclusive deference	36
Category 7 - Court determines agency interpretation is reasonable but there is at least one other reasonable interpretation and court is in equipoise as to the best interpretation; court applies agency interpretation; no deference (because the court does not defer to a less persuasive agency interpretation)	0

The only relevant Categories to test my inference are Categories 5, 6 and,7 possibly, 7.  I wanted to present the other Categories (0-4) to illustrate a large swath of cases involving interpretations where there is no deference.  Actually 56 identified cases in a year that could possibly involve Chevron deference is a very small percentage court of appeals cases in the courts of appeals.  Mr. Morgan’s data set already excluded the bulk of the Category 0-4 cases because they involve no possible deference.  I have cases in those Categories where I disagree with Mr. Morgan that they were “granted Chevron deference.” Based on my assignment of cases to Categories, I conclude: 1. No court said or implied that it deferred to a less persuasive agency interpretation  (Category 5). 2. Courts deferred in 36 cases to “reasonable” agency interpretations without indicating that the agency interpretations were not the best; deference is inconclusive (Category 6). In this Category, my reading of the cases is that many and even most could be Category 3 no deference cases if the courts had determined the best interpretation. 3. In 20 cases (Categories 0-4), the courts gave no deference, although they noised about Chevron.   My broader observations are: 1. This data set is consistent with my inference that courts rarely defer to lesser agency interpretations. I recognize that there may be more unspoken deference in Category 6 than I infer.  2. Scholars have noted the decline, even the death, of Chevron deference in the Supreme Court, but some claim that Chevron deference is more common in the Courts of Appeals.  E.g., Nathan Richardson, Deference Is Dead (Long Live Chevron), 73 Rutgers U. L. Rev. 441, 445 & 485-493 (2021).  My analysis suggests that the claim may not account for Category 6 which is inconclusive as to deference.   3. Many of the Chevron discussions in cases in the data set and in cases I have read tend to be formulaic pablum without focus on what drives outcomes. This may be what Justice Kennedy lamented as “reflexive” Chevron in Pereira v. Sessions, 585 U.S. ___, ___, 138 S. Ct. 2105, 2120-2021 (2018) (Kennedy, J., concurring); see also Kisor v. Willkie, 588 U.S. ___, 139 S.Ct. 2400, 2415 (2019) (Kagan majority opinion invoking Kennedy’s caution for reflexive Auer deference, like Chevron deference for subregulatory interpretation of agency regulations). Justice Kennedy’s description and other oft-voiced concerns about Chevron deference should result in less deference. Perhaps this phenomenon was in play in the post-Pereira data set from which I worked. 4. In Chevron lingo, Step Two’s “reasonable” concept is ambiguous and flexible enough to mask a court’s approving the agency interpretation because it is the best interpretation.  Judge Newman of the Second Circuit recently observed that: (i) reasonable for Chevron has no set meaning; (ii) in some cases, courts “almost” seem to be “just accepting agency interpretations with which they agree and rejecting those they disfavor,” which is not deference; and (iii) Chevron “perhaps” offers “a narrow range of acceptable agency interpretations, on either side of the disputed issue, that courts are willing to uphold, but they are ready to assert the power to reject others that, for stated, or more often unstated, reasons, they deem beyond an amorphous notion of ‘reasonable.’” Jon O. Newman, On Reasonableness: The Many Meanings of Law’s Most Ubiquitous Concept, 21 J. App. Prac. & Process 1, 83 (2021),, downloadable pdf here. 5. If the Supreme Court or Congress were to reverse Chevron and any vestige of deference to lesser agency interpretations, case outcomes may not differ much in the aggregate. This would be particularly true if Skidmore respect is given to agency interpretations.  Although courts sometimes noise about Skidmore “deference,” Skidmore is not deference but an approach for a judge to determine and apply the best interpretation. See John A. Townsend, Really, Skidmore "Deference?" (Federal Tax Procedure Blog 5/31/20; 6/3/20), here.  If the judge applies the best interpretation there is no deference even if it is the same as the agency interpretation. Added 4/3/22 2:00pm: As originally published on 4/2/22, I included a Postscript to explain my description in the first sentence above of tax exceptionalism as being false.  Since that tax exceptionalism was not directly related to the principal topic of this blog, I have deleted it and made it a separate blog entry.

Court Holds Defendant in FBAR Suit Alleging No Deficiency in Tax for Excessive Fines Argument Must Prove Deficiency Despite Tax Court No Deficiency Decision (4/1/22)

In United States v. Kerr, 2022 U.S. Dist. LEXIS 57004 (D. Az. 3/29/22), GS [to be posted] and CL here, Government brought suit to collect an FBAR civil willful penalty. The Government conceded error in the calculation and submitted revised much lower calculations. The Court invoked the APA to remand the matter to the IRS for recalculation with a more robust explanation. Whether remand to the IRS can result in a valid FBAR assessment is yet to be determined.

I focus on Kerr’s claim that the FBAR civil willful penalty assessments violated the Eighth Amendment prohibition on Excessive Fines. This claim is often made in FBAR civil willful penalty cases, but it have never been made successfully so far as I am aware. Kerr also failed here.

I include the Court’s discussion in its entirety (Slip Op. 15-17, one footnote omitted) because it discusses the lack of preclusive effect for a stipulated no deficiency decision in the Tax Court without any judicial resolution of the issues behind the no deficiency stipulation.

c. Whether the Assessment Violates the Eighth Amendment

             Although the Court will only enter judgment on three of the penalties made in the Original Assessment, it will consider Mr. Kerr's argument that the FBAR penalties violate his rights under the Eighth Amendment. The Eighth Amendment provides that no “excessive fines” shall be imposed. U.S. Const. amend. VIII. A punitive forfeiture violation is excessive “if it is grossly disproportional to the gravity of a defendant's offense.” United States v. Bajakajian, 524 U.S. 321, 334 (1998). Although no court has expressly held that civil FBAR penalties constitute a fine under the Eighth Amendment, the Court will assume, without deciding, that they are. See United States v. Bussell, 699 F. App'x 695, 696 (9th Cir. 2017) (evaluating whether FBAR penalties are “grossly disproportional” to the gravity of the defense under the Eighth Amendment).

             Mr. Kerr bears the burden of showing that the civil penalties are grossly disproportional. See United States v. $132,245.00 in U.S. Currency, 764 F.3d 1055, 1058 (9th Cir. 2014). Courts show substantial deference to legislative bodies when reviewing statutorily established penalties. Bajakajian, 524 U.S. at 334; Solem v. Helm, 463 U.S. 277, 290 (1983). In Bajakajian, the Court considered several factors in determining whether a fine was excessive including the nature of the conduct, the resulting harm, and whether other penalties may be imposed. 524 U.S. at 336-38; see also United States v. Bussell, 2015 WL 9957826, at *7 (C.D. Cal. Dec. 8, 2015). The Ninth Circuit has noted that these Bajakajain [sic] factors are not “rigid” and so courts are not limited to these considerations. United States v. Mackby, 339 F.3d 1013, 1016 (9th Cir. 2003).

             Under these factors, Mr. Kerr argues that the penalty is grossly excessive because (1) the only crime he committed was willfully failing to report the accounts, (2) this failure was unconnected to other criminal activity, (3) that other criminal penalties already exist for this conduct, and (4) that “the government suffered no injury as it stipulated that [Mr.] Kerr did not underreport his tax liabilities.” (Doc. 47 at 25).