Megan L. Brackney was quoted in a Law360 article titled “Top Federal Tax Cases To Watch In 2nd Half Of 2025.”
The article highlights prominent tax cases, pending court rulings, and other decisions to watch for in the second half of 2025. Law360 details a number of matters expected to come up later this year, including pending litigation concerning the Employee Retention Tax Credit (ERC), the economic substance doctrine, and transferee liability related to artificial capital loss deductions utilizing “Son of Boss” schemes.
In addition, courts are expected to begin deciding cases that could shed light on how last year’s U.S. Supreme Court decision in SEC v. Jarkesy may affect other enforcement agencies, such as the IRS. That landmark decision established a new precedent, stating that individuals and businesses are entitled to a jury trial before the Securities and Exchange Commission (SEC) can assess civil fraud penalties against them.
Jarkesy did not address tax penalties, but the case is already being used to challenge the IRS’ authority to assess civil penalties without a jury trial. In HDH Group Inc. v. United States in the U.S. District Court for the Western District of Pennsylvania, an insurance company argues that the IRS should not be allowed to penalize it for fraudulently promoting the tax advantages of microcaptive insurance policies. The insurance company argues that as a result of Jarkesy, they have a right to a jury trial prior to the IRS assessing any penalties. To date, the IRS maintains that the agency is authorized to issue §6663 penalties provided that there is convincing evidence the transactions were deceptively arranged for tax break purposes.
Megan said, “It would be a very watershed moment in tax procedure and administration if the IRS couldn’t assess and collect those penalties without judicial action.”
You can read more about notable federal tax cases in the article here.
About Megan
Megan is a tax controversy attorney with a distinguished track record of delivering exceptional results for clients facing complicated and difficult tax issues. The current Chair-Elect of the American Bar Association Section of Taxation, she is also a frequent speaker and contributor to local and national conferences on taxation, ethics in tax practice, IRS penalties, and civil tax controversy.
