IRS Loses Bid for $1 Million FBAR Penalty for Lack of Jury Trial

The government can’t claim a $1 million penalty from a woman who allegedly didn’t report foreign accounts without providing her an opportunity for a trial, a federal judge in Texas ruled Friday.

The US District Court for the Northern District of Texas dismissed the government’s case against Sharnjeet Sagoo, whom the IRS said failed to report financial interests in foreign banks accounts, also known as FBAR.

Judge Reed O’Connor said the US Supreme Court’s recent decision in SEC v. Jarkesy requires a jury trial before assessing the fine.

O’Connor’s ruling is one of the first to apply the justices’ 2024 ...