United States v. Gentges, 531 F.Supp.3d 731

Heinz Gentges, a U.S. citizen, maintained two UBS Swiss accounts in 2007 ("4959" and "4337") whose balances exceeded $10,000, triggering FBAR filing obligations.
Gentges did not file an FBAR for 2007; the IRS assessed two willful FBAR penalties on Oct. 7, 2016: $679,365 (4959) and $224,488 (4337).
The accounts were opened/maintained as numbered accounts with "hold mail" service; Gentges signed UBS forms referencing avoidance of IRS disclosure and acknowledging U.S. tax liability, visited Switzerland multiple times in 2007, and made large cash withdrawals.
Gentges used a long‑time preparer (Surico) for his 2007 U.S. tax return; Schedule B question about foreign accounts was answered “No.” Gentges admits he signed the return without substantive review and claims a software default produced the “No.”
Gentges did not disclose the Swiss accounts to his accountant or the attorney who formed his trusts and later moved funds among Swiss banks as institutions ceased servicing U.S. clients.
Procedural posture: Government moved for summary judgment. Court granted summary judgment that Gentges willfully violated the FBAR requirement, granted as to the 4959 penalty calculation, but denied as to the 4337 calculation and remanded that penalty to the IRS for recalculation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Gentges's failure to file an FBAR for 2007 was willful	Gentges acted willfully (includes recklessness): false Schedule B answer, numbered accounts, hold‑mail, not telling tax adviser, large cash withdrawals	The erroneous Schedule B was a software default; he trusted his preparer and did not knowingly conceal accounts	Willfulness includes recklessness; summary judgment for Gov't — Gentges recklessly disregarded FBAR duty by signing return without review and other indicia of willful blindness
Whether IRS used proper data to calculate the 4337 penalty	IRS reasonably used best available balance (Dec. 31, 2007) to compute 50% penalty when June 30, 2008 balance unavailable	IRS must follow IRM: use account balance as of June 30 following the reporting year; using Dec. 31 balance departed from agency guidance	Court found IRS departed from its own IRM; denied summary judgment as to the 4337 penalty and remanded to IRS for proper determination; 4959 penalty calculation upheld

Horowitz, 978 F.3d 80 (4th Cir. 2020) (willfulness under §5321 includes knowing and reckless conduct)
Norman v. United States, 942 F.3d 1111 (Fed. Cir. 2019) (failure to read tax return supports recklessness finding)
Bedrosian v. United States, 912 F.3d 144 (3d Cir. 2018) (civil willfulness encompasses objective recklessness)
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (civil "willfully" can include reckless conduct)
Lefcourt v. United States, 125 F.3d 79 (2d Cir. 1997) (distinguishing civil and criminal willfulness in tax context)
Hayman v. Commissioner, 992 F.2d 1256 (2d Cir. 1993) (signing a return charges taxpayer with constructive knowledge of its contents)
Williams, [citation="489 F. App'x 655"] (4th Cir. 2012) (signing tax return without review can constitute willful blindness to FBAR requirement)