The Seventh Amendment and IRS Civil Penalties After Jarkesy

March 17, 2026  |  New York Law Journal

In Securities and Exchange Commission v. Jarkesy (2024), the Supreme Court held that the SEC’s enforcement scheme, which permits the imposition of monetary penalties through an in-house forum, violates the Seventh Amendment right to a jury trial. In the last two years, parties facing a variety of penalties imposed by the IRS have invoked Jarkesy to argue that the Seventh Amendment applies equally in the tax context. In his latest New York Law Journal article, Morvillo Abramowitz Grand Iason & Anello partner Jeremy H. Temkin examines how courts are applying Jarkesy to penalties imposed by the IRS, noting that litigants contesting such penalties will need to run the gauntlet of establishing that, historically, the penalty at issue could only be enforced through courts of law; that a jury trial is not precluded by the public rights exception, which applies to revenue collection; and that the availability of judicial review in the IRS’s “penalty-now-trial-later” regime is insufficient under the Seventh Amendment. While many courts have rejected attempts to invoke Jarkesy in the tax context, practitioners should closely monitor this evolving area of law and preserve their clients’ potential jury trial rights.