penalty facts summary in the case of Mr. Zwerner and a realistic worst case scenario for John Doe

stage 1 : a) government assessed 4 civil FBAR penalties equivalent to 50% of the highest account balance for each of tax year 2004, 2005, 2006 and 2007, aggregating $3,488,609.33 for an account that appears to have had a high balance of $1,691,054 during the relevant time period.
b) Jury trial in the Federal District Court for the Southern District of Florida. Jury returned a verdict finding Mr. Zwerner “willful” and thus liable for 3 civil FBAR penalties equivalent to 50% of the high balance in his foreign financial account for each of the years 2004, 2005 and 2006 years as previously assessed by the government. The jury determined Mr. Zwerner was not “willful” as to the year 2007.
Final outcome : settlement post trial pending violation of the constitutional prohibition against excessive fines for 2 civil FBAR penalties for 2004 and 2005 in the amounts of $723,762 and $745,209 respectfully, interest thereon of $21,336.11 and $20,947.52 respectively, plus statutory penalties that have accrued under 31 U.S.C. § 3717(e)(2) on the FBAR penalty assessments for 2004 and 2005 of $128,016.64 and $125,685.11 respectively.

stage 2 :  a) The IRS asserted 3- 75% civil income tax fraud penalties for tax years 2004, 2005 and 2006.
Final outcome :  Following the audit, the income tax civil fraud penalty was abated in the U.S. Tax Court for 2006, by IRS Appeals for 2004 and 2005, and was not even asserted by the IRS for 2007.

In most cases the IRS just has a suspicion with regards to willfulness or willful blindness and want to assess the civil FBAR penalties for 2 or 3 years to force the taxpayer to litigate for a better result.
Keep in mind since no civil fraud could be sustained Mr. Zwerner was entitled to the mitigation guidelines for establishing the correct civil FBAR penalties but only because of the size of the account it did not matter.
In this highly publicized trial and case the DOJ Tax did only collect in the end 2 willful civil (hypothetically mitigated) FBAR penalties without civil tax fraud established.
The takeaway for all the taxpayers currently out there wondering what their realistic worst case scenario should look like .... it should be a max. of 2 willful civil FBAR penalties, of course always assuming not more egregious facts than in the case of Mr. Zwerner.