Overview

• On September 19, the Northern District of Texas dismissed the DOJ’s suit to reduce a $1,020,922.50 FBAR assessment against Sharnjeet K. Sagoo to judgment, holding the IRS’s administrative assessment violated the Seventh Amendment.
• The court found an after‑the‑fact jury trial could not cure the defect because the IRS had already acted as prosecutor, jury, and judge and because assessments carry real‑world impacts such as potential administrative offsets.
• On September 23, the Western District of Pennsylvania in HDH Group upheld a $6.6 million promoter‑penalty regime under I.R.C. § 6700, stressing de novo judicial review in district court and a jury right with the government bearing the burden of proof.
• On August 21, the U.S. Tax Court in Silver Moss declined to apply Jarkesy to civil tax fraud penalties, citing sovereign‑immunity limits on jury trials in Tax Court and characterizing tax penalties as public rights.
• Legal analysts expect appeals and broader challenges, with Sagoo being invoked in FBAR cases and potential ramifications for other agencies that rely on administrative processes to impose monetary sanctions.