The Supreme Court denied rehearing Monica Toth, an 82-year-old grandmother fighting the IRS, but Judge Neil Gorsuch broke with his peers in the ruling.
Thousands of petitions for review are filed with the Supreme Court every year, and most of them are denied by the judges. Toth’s case went up to the Supreme Court last year after two lower courts ruled in favor of the IRS after the IRS penalized Toth $2.1 million, half the amount of his $4.2 million fund, because he did not He reported the funds he had in a foreign bank account. . Toth challenged the ruling, but was denied a rehearing by the Supreme Court, so the lower court rulings, which require Toth to pay the funds, stand.
Toth claimed this violated the Eighth Amendment, which prohibits cruel and unusual punishment as well as excessive fines, but the Supreme Court denied hearing the case.
“Apart from a few types of cases, the Supreme Court has the discretion to hear appeals, and here, only Justice Gorsuch wanted to do that. With the exception of death penalty cases, you don’t see many successful Eighth Amendment challenges. so I’m not surprised. By rejecting Toth’s petition, the lower court’s decision stands and she will have to pay the civil penalty,” said attorney and former federal prosecutor Neama Rahmani. news week.
Rahmani added that the results of the decision may not seem fair, but the case was not an issue for the Supreme Court to consider.
“It is a matter of the legislative and executive branch,” Rahmani said. “If there is no constitutional or other protection, the IRS can impose these types of civil penalties.”
According to a report from the New York Post, the funds originated from a gift from Toth’s father shortly before his death. His father fled from Nazi Germany during World War II and sought refuge in Argentina. Once Toth became an adult, she moved to the United States and obtained citizenship.
Haunted by memories of an oppressive nation, her father wanted to designate a sum of money for his daughter in case she ever had to flee. Her father allocated $4.2 million in a Swiss bank account for Toth before her death.
Toth had to pay $40,000 in back taxes to the IRS after learning he failed to file a foreign bank and financial account report with the IRS each year. Toth was unaware of a rule that requires US citizens with more than $10,000 in funds from foreign bank accounts to file the report each year.
Toth paid back taxes, but the IRS requested penalties of more than $2 million after alleging Toth violated the Bank Secrecy Act of 1970, which requires US financial institutions to assist US government agencies in detecting and preventing money laundering, and sanctioned her for the action.
Lower courts ruled in favor of the IRS, arguing that penalties were not the same as fines, and therefore the penalties did not violate the Eighth Amendment.