Law360 quoted Kostelanetz partner Michael Sardar on several of the most consequential federal court tax decisions of 2025.
In an article titled “Top Federal Tax Decisions of 2025,” Michael is quoted on the impact of two major tax cases to come out of the courts in 2025 — Murrin v. Commissioner and U.S. v. Sagoo.
In Murrin, as Law360 notes, the Third Circuit Court of Appeals decided that it was permissible for the IRS to collect unpaid taxes from a woman more than 20 years after her tax return preparer committed fraud in preparing her tax returns without her knowledge. The decision was later amended by the court to clarify that its decision should not be interpreted to prevent the taxpayer from contesting the interest on the tax owed.
Michael told Law360 that the ruling is likely to draw the U.S. Supreme Court's attention. “There is definitely a circuit split on the issue, and it would seem an important case for the Supreme Court to decide,” he noted, saying that the Third Circuit’s decision added “more holes” to the “Swiss cheese” that governs the IRS’s statute of limitations on tax collection.
“If the conduct of someone other than the taxpayer is going to impact a taxpayer’s ability to get a fresh start, to have the statute of limitations close and move on, I think that’s a significant case,” Michael said.
Michael also explored with Law360 the potential implications of the Supreme Court’s decision in SEC v. Jarkesy, which held that the Seventh Amendment entitles a defendant to a jury trial when the U.S. Securities and Exchange Commission (“SEC”) pursues civil penalties for securities fraud. Since the case was decided in 2024, it has long been assumed that the new precedent could affect how the IRS pursues civil penalties for tax offenses.
In Sagoo, a Texas federal judge relied on Jarkesy in ruling that a taxpayer should not have to pay $1 million in civil penalties for undeclared foreign bank accounts because the penalties were assessed without affording the taxpayer a jury trial.
Michael noted that Sagoo is the 2025 court decision he is “most excited about” because it opens up tax defenses to “a whole host of what I would refer to as special tax penalties,” such as those that Law360 described as “punitive, one-time penalties assessed by the IRS.”
Sagoo “is a ruling that would take decades of what has always been accepted as OK and the common practice and turn it on its head,” Michael explained. “This idea that the IRS or the government would have to bring any of those penalties to a jury before they make an assessment? That would change everything.”
Read the full Law360 article here.
About Michael
Michael represents clients in all stages of civil and criminal tax controversies before the Internal Revenue Service, state tax authorities, the Department of Justice, and local prosecutors. He has also represented scores of clients with unreported foreign assets, enabling the repatriation of over half a billion dollars of offshore assets through the IRS Offshore Voluntary Disclosure Program, the Streamlined Compliance Procedures, and the IRS’s current Voluntary Disclosure Practice.