Institute for Justice takes FBAR Excessive Fines Case

My excessive fines post of February 22, 2012, suggested that the IRS would not risk an excessive fines lawsuit against money legitimately gained:

It seems unlikely, if the money is legitimate, that the IRS would charge a penalty at all.  If taxes are owed, perhaps a small FBAR penalty.  But in case the penalty is confiscatory, the IRS is well aware that the Eighth Amendment protects the taxpayer.  … it is sufficient at this point to say that fines must be proportionate to the crime and to the damage done to the government, and if the tax code already applies fines and interest against unpaid taxes, it seems unlikely to me that the IRS would risk applying any FBAR fine to foreign accounts because the Supreme Court could possibly strike down the entire FBAR law as unconstitutional under the Eighth Amendment.

But I soon retracted that view because of the penalties the IRS was actually handing out. Now, 14 years later (!), the Institute for Justice has take up the case of US citizen and resident whose bank account in Switzerland contained money he had earned through legitimate consulting. The fine of US $437K seems excessive when the damage to the IRS on the undisclosed income was a mere $29K and there was already $12K late payment tacked on to that. There is no penalty for money laundering in this case. It is innocent money. However, it seems extremely unlikely to me now that the whole FBAR law would be struck down merely because the fine structure is excessive.