Case Explained: USA V. KERR

Court: United States Court of Appeals for the Ninth Circuit Filed: 2026-06-15 Docket: 2:19-cv-05432-DJH The Ninth Circuit affirmed the district court’s judgment upholding approximately $1.9 million in civil penalties assessed by the IRS against Stephen M. Kerr for failure to file Reports of Foreign Bank and Financial Accounts (FBARs) for 2007 and 2008. The court held that the district court did not abuse its discretion by remanding the miscalculated penalties to the IRS for recalculation without vacating the original assessments under the Administrative Procedure Act. Applying the standard of review for abuse of discretion, the court determined that equity demanded a remedy short of vacatur because Kerr was undisputedly liable for the penalties and vacatur would have created a risk of significant revenue forfeiture for the government and an unjust windfall for Kerr due to the statute of limitations. The court further ruled that the recalculated penalties did not constitute “new” assessments barred by the six-year statute of limitations under 31 U.S.C. § 5321(b)(1), as the remand was limited to correcting a calculation error in penalties that were already timely assessed. Consequently, Kerr’s motion to correct and supplement the record was denied, and the judgment affirming the IRS’s collection of the recalculated penalties stands. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.