Opinion
28898-10 5819-11 5821-11 6034-11
10-12-2022
HERBERT HIRSCH & BONITA HIRSCH, ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Patrick J. Urda Judge
Before the Court are a motion for jury trial [Doc. 111 and a motion for oral argument [Doc. 122], filed by petitioners Herbert and Bonita Hirsch. We will deny the relief requested in each.
"Doc." references are to the filings in the lead case, Docket No. 28898-10, as numbered by the Clerk of this Court.
In their motion for jury trial, the Hirsches argue that the jury-trial right enshrined in the Seventh Amendment to the Constitution extends to Tax Court proceedings that involve fraud penalties, as here. [Doc. 111 at 7-16.] In support of this position, the Hirsches point to Jarkesy v. SEC, 34 F.4th 446, 453-57 (5th Cir. 2022), in which the U.S. Court of Appeals for the Fifth Circuit concluded that the jury-trial right applied to an SEC civil enforcement proceeding as such actions were analogous to traditional suits at common law to which the jury-trial right attached. [Id. at 2-8.]
As the Fifth Circuit previously explained, however, "[s]ince there was no right of action at common law against a sovereign, enforceable by jury trial or otherwise, there is no constitutional right to a jury trial in a suit against the United States." Mathes v. Commissioner, 576 F.2d 70, 71 (5th Cir. 1978), aff'g T.C. Memo. 1977-220.Thus, a "[p]etitioner has no right under the seventh amendment to the Constitution . . . to a trial by jury in the Tax Court." Swanson v. Commissioner, 65 T.C. 1180, 1185 (1976); see also, e.g., Stephens v. Commissioner, 565 Fed.Appx. 795, 797 (11th Cir. 2014); Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); Martin v. Commissioner, 756 F.2d 38, 40 (6th Cir. 1985); Funk v. Commissioner, 687 F.2d 264, 266 (8th Cir.1982), aff'g T.C. Memo. 1981-506; Olshausen v. Commissioner, 273 F.2d 23, 27-28 (9th Cir. 1959), aff'g T.C. Memo. 1958-85. In short, Tax Court proceedings occupy wholly different ground than the enforcement action in Jarkesy, and that decision provides no support to revisit our consistent refrain (joined by the Courts of Appeals) that there is no right to a jury trial in the Tax Court.
We note that the Fifth Circuit did not mention Mathes in its decision in Jarkesy, which strongly suggests that it did not intend to disturb its long-established holding that the jury-trial right does not apply to Tax Court proceedings.
Nor are we persuaded that a different result obtains because of the fraud penalty at issue. The Ninth Circuit has reflected on this point, determining that the existence of penalties in a Tax Court proceeding does not implicate the jury-trial right. See Olshausen v. Commissioner, 273 F.3d at 28.
We have under consideration in the instant case a proceeding provided for by statute to test the validity of a penalty assessed pursuant to that statute. No such action existed at common law, and, therefore, no jury trial is required by the Seventh Amendment.Id. We will accordingly deny the Hirsches motion for jury trial. Finding the law settled on this point, we see no need for oral argument and will deny that motion as well. It is therefore
Of course, the Hirsches have the option to pay the deficiency asserted by the IRS and sue for a refund in federal district court, which would have entitled them to elect trial by jury. See 28 U.S.C. §§ 1346(a)(1) and 2402. Any deprivation of the jury-trial right "was due to his own act." Swanson, 65 T.C. at 1181; Mathes v. Commissioner, 576 F.2d at 71.
ORDERED that petitioners' motion for jury trial, filed May 27, 2022, is denied. It is further
ORDERED that petitioners' motion for oral argument, filed August 18, 2022, is denied.