Does the Seventh Amendment provide a taxpayer with the right to a jury before the government imposes tax penalties? This issue is live at the Tax Court, at Courts of Appeals, and at the Supreme Court. Fortunately, the tax literature includes two entries on this topic, one by Professor Steve Johnson and another by Professor Bryan Camp. Both are somewhat skeptical about a jury trial requirement, thought they emphasize different aspects of the question. Their work should illuminate the conversation, and inform the litigation.
Few thought tax penalties attracted jury rights prior to the 2024 Supreme Court decision in Jarkesy v. Securities and Exchange Commission. But after the Court decided that jury rights attached to securities fraud penalties, an analogous question arose in tax. A cert petition is pending in Hirsch v. U.S. Tax Court, where the Eleventh Circuit refused petitioner’s request for a writ of mandamus on the grounds that the Tax Court had unconstitutionally denied them a jury trial. Tax practitioners are following Hirsch closely.
This Term, the Court will decide another post-Jarkesy case, F.C.C. v. AT&T, which involves penalties for mishandling customer data and which was argued in April 2026. The F.C.C. can only collect penalties under an enforcement order that can be challenged in district court, where a jury is available. In contrast, taxpayers must pay tax penalties before pursuing a district court challenge under the 1958 case Flora v. United States. Thus, the IRS has more potent assessment authority, and the tax fraud penalty jury question will likely remain open after F.C.C. v. AT&T. In the meantime, the Tax Court (an Article I court with no jury capacity) recently has held that jury rights do not attach to tax penalty cases, and appellate courts have begun to consider related cases, including the Eleventh Circuit in Hirsch and the Fifth Circuit in Sagoo, where the government has appealed a district court decision granting jury rights to a taxpayer who faces FBAR penalties.
Johnson and Camp agree that civil tax fraud penalties are the most likely to attract jury rights. Also, they use the same framework to analyze the application of Jarkesy to tax fraud penalties: first, whether a case is an action at common law, and second, whether the public rights exception (discussed below) applies. Camp argues that this inverts the traditional analysis that considered the public rights question first and only got to the Seventh Amendment question if the matter did not involve a public right.
To frame the possible application of Jarkesy in tax, Professor Johnson catalogs the statute, listing a dozen different kinds of penalties. These include timeliness, accuracy-related, information reporting, and tax adviser penalties; civil tax fraud penalties; and criminal fraud penalties. Of these, as Johnson explains, taxpayers generally have the right to a jury only when they face criminal fraud penalties, although jury trials are available in district court in refund suits and in actions brought by the government in district court to enforce collection of an assessment. Professor Camp also canvasses the case law, explaining that there are many cases holding that jury rights do not apply in tax cases and that that long established case law history is the best argument for a tax exception to a jury requirement for tax penalties, even though the precedent generally grapples with jury rights for collection, not jury rights for penalties.
The authors agree on the Jarkesy test. First, is a case an action at common law? Key is the question of whether the penalty is punitive or remedial. The Jarkesy court concluded that the SEC fraud penalties were punitive rather than remedial and that therefore they had to be legal in nature. The Court reasoned that punitive penalties must result from actions at common law because they cannot be equitable, as equity authorizes courts to remediate, for instance via restitution remedies such as unjust enrichment or profit disgorgement, but not to penalize.
The second part of the test is the longstanding public rights exception to the jury requirement. The Jarkesy Court wrote that public rights are matters that “historically could have been determined exclusively by the executive and legislative branches.” It listed “revenue collection” as a public rights example. The Supreme Court identified a public rights exception for tax in 1856, in Murray’s Lessee v. Hoboken Land & Improvement Co.
Though the authors agree on the Jarkesy test, they diverge somewhat on its application. As to the first part of the test, Camp interprets Jarkesy as establishing a strict and narrow definition of remedial remedies, while Johnson considers the Supreme Court’s statement in Jarkesy that penalties are only remedial if they are “solely” remedial doctrinally precarious, because few if any penalties have no punitive purpose. Johnson calls it merely “plausible, but far from certain, that at least some civil tax penalties are punitive in the sense suggested by Jarkesy.” Johnson also emphasizes the different context of tax penalties as compared to securities penalties, including the fact that tax penalties always go to the government, and never to another private party.
The two Articles also treat a 1938 precedent, Helvering v. Mitchell, somewhat differently. There, the Supreme Court held that a civil fraud tax penalty was remedial, not punitive, for purposes of the double jeopardy clause of the Fifth Amendment. Johnson treats this as strong evidence of the longstanding treatment of tax civil fraud penalties as other than actions at common law. Camp points out that various definitions in tax law, including “tax” and “penalty,” have different meanings in different contexts, and that both Congress and the IRS call the civil fraud liabilities “penalties.”
As to the second step, regarding the public rights exception, both Johnson and Camp acknowledge Murray’s Lessee, which recognized the public rights exception to the jury trial requirement in a case involving the government’s effort to recover remitted taxes from an errant tax collector. Both Johnson and Camp focus on the Jarkesy Court’s language that “[p]ractice may be probative when it reflects the settled institutional understandings of the branches” and consider how to distinguish a civil tax fraud penalty case from Granfinanciera, S.A. v. Nordberg, where the Court held in 1989 that transferees of allegedly fraudulent transfers were entitled to a jury trial when a bankruptcy trustee sued to set the transfers aside. For Johnson, the long history of tax cases consistently refusing jury rights and the embedding of penalties within the tax code demonstrates why the public rights exception should apply. Camp agrees about the importance of tax cases and precedent as a reason to apply the public rights exception, although he also points out that the application of civil fraud penalties is very rare, subject to special process within the government, and arguably not intertwined with the rest of tax law.
Camp’s article, published soon after the Jarkesy case, focuses on a close analysis of the opinion itself, while Johnson offers a more comprehensive analysis. For instance, Johnson offers an argument that uses the 1938 Mitchell precedent (which held that civil tax fraud penalties were remedial and not criminal for purposes of the Double Jeopardy Clause) to explain why the Court should the respect the intent of Congress to impose tax penalties. Johnson argues that Mitchell stands for the proposition that it is “within the constitutional authority of Congress to assign determination of this penalty to an administrative agency [that] may make its determination without employing the procedures of the Article III courts.”
Tax penalties can avoid a jury trial requirement if a court decides they are remedial, or if a court decides that the public rights exception applies, or if a court decides that the availability of a jury trial in a district court refund suit is sufficient to satisfy the Seventh Amendment. Regardless of how courts decide cases about the jury right in civil tax fraud, the courts, the litigants, and the academy should read both articles. This is impact scholarship, beautifully timed and indisputably useful.
