'Zwerner' Eighth Amendment Argument Could Have Far-Reaching Impact

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Tax professionals throughout world are closely watching the outcome of a case in which a federal jury found that Carl R. Zwerner faces penalties of as much as 150 percent because he willfully failed to report the accounts to the U.S. government, attorneys told Bloomberg BNA in a series of interviews.

Zwerner's attorney, Martin Press, said following the May 28 verdict that his client plans to argue before a judge June 6 that the $2.2 million in penalties being sought by the government are excessive and violate the Eighth Amendment—an argument that has never been asserted in tax penalty litigation and could have far-reaching implications, lawyers said.
“This is the first case I can think of where the Eighth Amendment is and will be in play,” Steven Toscher, a principal with Hochman, Salkin, Rettig, Toscher & Perez PC in Los Angeles, told Bloomberg BNA June 3. “This is unique. I think the whole tax world involved in the foreign area is watching this case.”


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