The statute should be interpreted to give the IRS unreviewable discretion with respect to the penalty up to the maximum permitted by the statute

The continuing saga in Williams has been brought to a close (unless appeal) with this issue.  United States v. Williams, 2014 U.S. Dist. LEXIS 105666 (ED VA 2014), here.  (The order is cryptic, so I also include the brief (without exhibits) as follows:  Williams  opening brief, here, U.S. opening brief, here, Williams response brief, here, and U.S. response brief, here.)
The Internal Revenue Manual states that in assessing penalties, examiners "exercise discretion" in determining "the total amount of penalties to be asserted," and also states that examiners are to consider the facts and circumstances of each case when making that determination. The Manual clarifies that the penalties are determined "per account," and not per person or per unfiled FBAR. IRM § 4.26.16.4. The Manual specifically lists "[t]he nature of the violation and the amounts involved" and "[t]he cooperation of the taxpayer during the examination" as among the factors that an examiner should consider. However, it also warns that "given the magnitude of the maximum penalties permitted for each violation, the assertion of multiple penalties . . . should be considered only in the most egregious cases." IRM § 4.26.16.4.7.

 Standard of review is de novo or the standard is for abuse of discretion.

1.  Violating Section 5314 by signing his federal tax return. The court found the signature "prima facie evidence that the taxpayer knew the contents of his return," Op. at 12, and concluded that he was also on notice of the FBAR requirement.
2. Not carefully reviewing the instructions on his federal tax return suggested a "conscious effort to avoid learning about reporting requirements."
3. False answers indicate an intent to conceal financial information.
4. 50% or $100,000 per year penalties issued by the IRS were within the range authorized by Congress in 31 U.S.C. § 5321(a)(5)(C) for willful violations.
5. Were penalties assessed for an improper purpose ? Court cannot simply substitute its judgment for that of the agency.
6. Eligible for the FBAR penalties, including the penalties for willful violations ?
7. FBAR penalties were authorized by the statute and "accordingly . . . were proper."
8. Reasoned decision-making and consideration of the appropriate factors.
 http://federaltaxcrimes.blogspot.ch/2014/08/williams-yet-again-court-bows-deeply-to.html