19-3920 USA v. Kahn 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 ------ 4 August Term, 2020 5 (Argued: December 17, 2020 Decided: July 13, 2021) 6 Docket No. 19-3920 7 _________________________________________________________ 8 UNITED STATES OF AMERICA, 9 Plaintiff-Appellee, 10 - v. - 11 JEFFREY KAHN, as co-executor of the estate of HAROLD KAHN, 12 and JOEL KAHN, as co-executor of the estate of HAROLD KAHN, 13 Defendants-Appellants. 14 _________________________________________________________ 15 Before: KEARSE, BIANCO, and MENASHI, Circuit Judges. 16 Appeal from a judgment of the United States District Court for the 17 Eastern District of New York, Kiyo A. Matsumoto, Judge, in favor of the government 1 against defendants as co-executors of the estate of Harold Kahn ("Kahn"), in the 2 principal penalty amount of $4,264,728, plus statutory additions and interest, for 3 Kahn's undisputedly willful failure, in violation of 31 U.S.C. § 5314, to file in 2009 a 4 Report of Foreign Bank and Financial Accounts ("FBAR") for his two foreign bank 5 accounts whose balances, at the time of his failure to file, totaled $8,529,456. The 6 district court granted the government's motion for summary judgment on the ground 7 that, under 31 U.S.C. § 5321 as amended in 2004, the maximum penalty for Kahn's 8 failure to file an FBAR is 50 percent of the aggregate balance in the accounts at the 9 time of that failure; the court rejected defendants' contention that a 1987 Treasury 10 Department regulation, 31 C.F.R. § 1010.820(g)(2), limits the government's authority 11 to impose penalties for willful FBAR violations to $100,000 per account. See United 12 States v. Kahn, 17-cv-7258, 2019 WL 8587295 (E.D.N.Y. Sept. 23, 2019). On appeal, 13 defendants pursue their contention that the regulation trumps the later-amended 14 statute. We conclude that the district court correctly ruled that the penalty limitation 15 provided in the 1987 regulation, which had tracked the penalty provision enacted in 16 a prior version of the statute, was superseded by the 2004 statutory amendment 17 increasing the penalty maximum. 18 Affirmed. -2- 1 Judge Menashi dissents in a separate opinion. 2 JULIE CIAMPORCERO AVETTA, Tax Division, 3 Department of Justice, Washington, D.C. (Richard E. 4 Zuckerman, Principal Deputy Assistant Attorney 5 General, Joshua Wu, Deputy Assistant Attorney 6 General, Francesa Ugolini, Geoffrey J. Klimas, 7 Attorneys, Tax Division, Department of Justice, 8 Washington, D.C.; Seth D. DuCharme, Acting United 9 States Attorney for the Eastern District of New York, 10 New York, New York, on the brief), for Plaintiff- 11 Appellee. 12 JAMES N. MASTRACCHIO, Washington, D.C. (Daniel G. 13 Strickland, Eversheds Sutherland (US), Washington, 14 D.C., on the brief), for Defendants-Appellants. 15 KEARSE, Circuit Judge: 16 Defendants Jeffrey and Joel Kahn, as co-executors of the estate of Harold 17 Kahn ("Kahn"), appeal from a judgment of the United States District Court for the 18 Eastern District of New York, Kiyo A. Matsumoto, Judge, in favor of the United States 19 against defendants as co-executors of the Kahn estate …
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