Kimble v. United States, 991 F.3d 1238

Ms. Kimble was designated a joint owner of a numbered UBS (Switzerland) account opened by her father and took steps to keep the account secret after his death.
From at least 2003–2008 she did not disclose the foreign account or income on her federal tax returns; she signed returns under penalty of perjury representing she had no foreign accounts and did not review the returns.
In 2008 she learned of the UBS investigation, entered the Offshore Voluntary Disclosure Program in 2009, later negotiated with the IRS, and ultimately paid an assessed FBAR penalty.
The IRS determined her failure to file an FBAR was willful and assessed a penalty of 50% of the account balance (statutory maximum), which Ms. Kimble paid and then sued for refund in the Court of Federal Claims.
The Court of Federal Claims granted the government’s motion for summary judgment, finding willfulness (reckless disregard suffices) and no abuse of discretion in imposing the 50% penalty.
The Federal Circuit affirmed: willfulness was supported by undisputed facts and the IRS’s imposition of the maximum statutory penalty did not constitute an abuse of discretion; an Eighth Amendment challenge was waived.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether failure to file FBAR was "willful" under 31 U.S.C. § 5321(a)(5)	Kimble: must have actual knowledge of FBAR obligation; she lacked actual knowledge until 2008	Government: willfulness includes reckless disregard; signing returns and concealing account supports willfulness	Held: Willfulness may be shown by recklessness; undisputed facts support willful violation
Whether IRS abused discretion by assessing 50% statutory penalty	Kimble: IRS should have mitigated; maximum penalty disproportionate	Government: IRS applied Internal Revenue Manual mitigation guidelines which recommended 50% given facts	Held: No abuse of discretion; guidelines supported maximum penalty
Whether 1987 regulation (31 C.F.R. § 1010.820) limits penalty amount	Kimble: regulation caps willful FBAR penalty below statutory maximum	Government: statute controls; regulation conflicts with statute	Held: Regulation invalid to extent inconsistent with statute; statute governs penalty
Whether Eighth Amendment excessive‑fine claim can be raised	Kimble: penalty is excessive under Eighth Amendment	Government: claim not properly pleaded below	Held: Claim waived for failure to plead; court did not consider merits

Norman v. United States, 942 F.3d 1111 (Fed. Cir. 2019) (willfulness under FBAR statute includes recklessness)
Bedrosian v. United States, 912 F.3d 144 (3d Cir. 2018) (subjective motivations not required to establish willfulness under FBAR statute)
Greer v. Comm’r, 595 F.3d 338 (6th Cir. 2010) (signing a tax return creates constructive knowledge of its contents)
Lebron v. Nat’l R.R. Passenger Corp., 513 U.S. 374 (1995) (legal claims must be pled; arguments unsupported by pleadings may be waived)
Casa de Cambio Comdiv S.A. v. United States, 291 F.3d 1356 (Fed. Cir. 2002) (claims not raised in complaint are forfeited)
Premier Off. Complex of Parma, LLC v. United States, 916 F.3d 1006 (Fed. Cir. 2019) (standard of review for CFC summary judgment rulings)
Ninestar Tech. Co. v. Int’l Trade Comm’n, 667 F.3d 1373 (Fed. Cir. 2012) (review standard for agency penalty/selection decisions)