The US Supreme Court denied taxpayers' bid Monday to review whether Herbert Hirsch, Bonita Hirsch, Harvey Birdman and Diane Birdman could demand a jury trial over more than $15 million in IRS civil tax fraud penalties. The refusal leaves the US Tax Court ruling intact for now.
Herbert Hirsch and the petition
Herbert Hirsch was one of the petitioners who asked the high court to take the case. He and the other three argued that the penalties, assessed under the Internal Revenue Code, triggered the Seventh Amendment’s guarantee of a jury trial.
The petitioners said the US Tax Court was wrong to deny that demand. Their filing relied on the high court’s 2024 decision in SEC v. Jarkesy, which struck down a penalty levied by the SEC.
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SEC v. Jarkesy in 2024
The challenge tried to use SEC v. Jarkesy as the legal bridge between agency penalties and the jury trial right. That decision gave the petitioners a way to argue that fraud penalties under the Internal Revenue Code should receive the same jury-trial treatment they sought here.
The US Supreme Court did not take that step. By declining review, it left Herbert and Bonita Hirsch and Harvey and Diane Birdman without a ruling from the justices on whether the Seventh Amendment applies to these penalties at this size.
IRS civil tax fraud penalties
The dispute centers on civil tax fraud penalties imposed by the IRS, not on a criminal charge. The amount at issue is more than $15 million, which is the figure the petitioners placed before the court when they asked for review.
For taxpayers facing penalties in that range, the immediate consequence is procedural: the fight stays in the lower court system, and the Supreme Court will not weigh in on the jury-trial question in this case.
