No Collection-Due-Process Review for FBAR Penalties: Eleventh Circuit Confirms Tax Court Lacks Jurisdiction over Title 31 Civil Penalties

I. Introduction

In Stephen C. Jenner & Judy A. Jenner v. Commissioner of Internal Revenue, No. 25‑10014 (11th Cir. Dec. 8, 2025) (per curiam, not for publication), the Eleventh Circuit resolved a recurring procedural question at the intersection of tax administration and Bank Secrecy Act enforcement:

Can taxpayers use the Internal Revenue Code’s collection‑due‑process (CDP) procedures and the Tax Court to challenge civil penalties for failing to file foreign bank account reports (FBARs)?

The court’s answer is unequivocal: no.

The Jenners had been assessed FBAR penalties under 31 U.S.C. § 5321 and were subjected to administrative offset of a portion of their Social Security benefits to satisfy those penalties. Seeking to invoke the familiar protections of the Internal Revenue Code’s CDP regime, they:

Filed IRS Form 12153 requesting a CDP hearing under I.R.C. § 6330, and
When the IRS refused, petitioned the U.S. Tax Court to compel such a hearing and review the matter.

The Tax Court dismissed for lack of jurisdiction. On appeal, the Eleventh Circuit affirmed, holding that:

FBAR penalties are civil penalties imposed under Title 31 (the Bank Secrecy Act), not taxes imposed under Title 26 (the Internal Revenue Code), and
The Tax Court’s jurisdiction, being strictly limited to matters conferred by Title 26, does not extend to FBAR penalties or to challenges to administrative offsets used to collect them.

The opinion consolidates prior indications—most notably a footnote in United States v. Rum—into a direct, explicit holding: FBAR penalties are outside the CDP jurisdiction of the Tax Court, and their collection via administrative offset is governed exclusively by Title 31 mechanisms.

II. Summary of the Opinion

The Eleventh Circuit’s reasoning proceeds in several clear steps:

Source of the penalty: FBAR penalties arise under the Bank Secrecy Act (31 U.S.C. § 5321), not under the Internal Revenue Code.
Nature of the exaction: The statute itself labels FBAR consequences as a “civil penalty,” not a “tax,” and the Supreme Court has long distinguished taxes from penalties.
Tax Court’s jurisdiction is limited to Title 26: Under I.R.C. § 7442, the Tax Court may exercise only jurisdiction “as is conferred on [it] by this title,” i.e., Title 26.
CDP framework is limited to tax levies: I.R.C. §§ 6330 and 6331 create procedural rights (notice, a CDP hearing, and Tax Court review) only when the IRS levies to collect an “unpaid tax” under the Internal Revenue Code.
Administrative offset under Title 31 is a different process: The Treasury’s decision to collect FBAR penalties by administrative offset from Social Security benefits flows from 31 U.S.C. §§ 3711, 3716, and related Treasury regulations, not from I.R.C. levy provisions.
No CDP “notice of determination” ever issued: The IRS’s May 2023 letter simply explained that CDP rights do not apply to FBAR penalties and suggested the proper judicial fora (district court or Court of Federal Claims). It was not a “notice of determination” within the meaning of § 6330(d)(1).
Tax Court lacks jurisdiction; dismissal affirmed: Because the underlying liability is neither a tax nor imposed under Title 26, and because no CDP determination existed, the Tax Court correctly concluded it lacked jurisdiction.

The court reminds the Jenners that any substantive defenses—such as their statute of limitations argument—must be pursued instead in a U.S. district court or the U.S. Court of Federal Claims, the proper fora for FBAR disputes.

III. Detailed Analysis

A. Statutory and Regulatory Framework

1. The Bank Secrecy Act and FBAR Penalties (Title 31)

The Bank Secrecy Act (BSA), codified at 31 U.S.C. §§ 5311–5336, aims to combat money laundering, tax evasion, and other financial crimes by requiring reporting of foreign financial accounts. Two pieces are central:

Reporting obligation: 31 U.S.C. § 5314 and 31 C.F.R. § 1010.350 require U.S. citizens and residents to report relationships with foreign financial accounts by filing an FBAR (FinCEN Form 114) each year.
Civil penalty: 31 U.S.C. § 5321(a)(5) authorizes a “civil penalty” for failures to file FBARs, with different tiers (non‑willful and willful), though the opinion quotes § 5321(a)(3) as a representative civil‑penalty provision to emphasize the “civil penalty” language.

Administration and enforcement of FBAR penalties proceed via delegation:

The Secretary of the Treasury’s BSA powers are delegated to FinCEN (31 C.F.R. § 1010.810(d)),
FinCEN has re‑delegated FBAR penalty assessment authority to the IRS (31 C.F.R. § 1010.810(g); IRS Delegation Order 25‑13).

Importantly, the source of the obligation and penalty remains Title 31, even though the IRS functionally implements assessment and collection.

2. Collection of FBAR Penalties as “Nontax Debt” (Title 31, Subchapter II)

Once assessed, FBAR penalties are governmental debts. Their collection is governed by general federal debt‑collection statutes:

31 U.S.C. §§ 3711, 3716 & 3701(a)(8): Executive agencies may collect “nontax debts” through tools such as administrative offset.
Administrative offset (31 U.S.C. § 3716): The government may withhold federal payments (e.g., Social Security benefits) to satisfy a debtor’s nontax obligation, provided notice and an opportunity to contest are given.
Exclusion of tax debts: 31 U.S.C. § 3701(d)(1) expressly provides that administrative offset under § 3716 “does not apply” to claims or debts arising under the Internal Revenue Code, underscoring that the administrative‑offset regime is intended for non‑tax debts.

In this case, the Treasury Department’s Bureau of the Fiscal Service notified the Jenners that it would collect FBAR penalties by offsetting up to 15% of their monthly Social Security benefits—classic § 3716 administrative offset.

3. The Tax Court’s CDP Jurisdiction (Title 26)

The Internal Revenue Code (Title 26) creates a parallel but distinct scheme:

Levy power (I.R.C. § 6331): If a person fails to pay a tax after notice and demand, the IRS may collect “such tax” by levy upon the person’s property or rights to property.
Collection‑Due‑Process (CDP) rights (I.R.C. § 6330):
- Before levying, the IRS must provide written notice of intent to levy and of the right to request a CDP hearing in the IRS Independent Office of Appeals,
- The notice must identify the “unpaid tax,” and
- At the CDP hearing, the taxpayer may raise “any relevant issue relating to the unpaid tax or the proposed levy.”
Judicial review (I.R.C. § 6330(d)(1)): After the CDP hearing concludes, the Appeals officer issues a “notice of determination.” The taxpayer may then petition the U.S. Tax Court to review that determination.
Tax Court jurisdictional statute (I.R.C. § 7442): The Tax Court has jurisdiction only to the extent “conferred on [it] by this title,” that is, by the Internal Revenue Code itself.

CDP procedures and Tax Court review thus come into play only when there is:

An unpaid tax imposed under Title 26,
An IRS levy (or proposed levy) to collect that tax,
Statutory notice of intent to levy and of CDP rights,
A CDP hearing in Appeals, and
A notice of determination issued after that hearing.

The Jenners attempted to bring FBAR penalties within this framework by filing a Form 12153 labeled “FBAR penalty” and arguing that IRS collection through offset triggered CDP rights. The core of the Eleventh Circuit’s analysis is that these conditions are not and cannot be satisfied for a Title 31 FBAR penalty.

B. Precedents Cited and Their Role in the Decision

1. Pollard v. Commissioner, 816 F.2d 603 (11th Cir. 1987)

Cited for a narrow procedural point, Pollard provides the standard of review: the Eleventh Circuit reviews Tax Court orders of dismissal for lack of jurisdiction de novo. This means the appellate court gives no deference to the Tax Court’s legal determination on jurisdiction; it independently interprets the statutes.

2. Roberts v. Commissioner, 175 F.3d 889 (11th Cir. 1999)

Roberts stands for the proposition that:

The Tax Court is a court of limited jurisdiction, and its jurisdiction must be strictly construed and is confined to that expressly granted by the Internal Revenue Code.

The Jenners effectively asked the Eleventh Circuit to stretch Tax Court jurisdiction beyond Title 26 into Title 31 FBAR matters. Roberts reinforces the court’s refusal to do so absent explicit statutory authorization.

3. United States v. Rum, 995 F.3d 882 (11th Cir. 2021)

Rum was a substantive FBAR case, reviewing a district court’s judgment enforcing FBAR penalties. In a footnote, Rum had remarked that “challenges to FBAR penalties do not fall within [the Tax Court’s] jurisdiction.” The panel in Jenner builds on that earlier observation:

It uses Rum to confirm that FBAR penalties are indeed treated as penalties, not taxes, and that disputes belong in district court, not Tax Court.
It transforms prior dicta into the core holding of this case: the Tax Court lacks jurisdiction over FBAR penalties.

4. Supreme Court Tax–Penalty Distinction: La Franca and Kurth Ranch

The panel relies on two Supreme Court cases to sharpen the line between taxes and penalties:

United States v. La Franca, 282 U.S. 568 (1931): The Court defined a “tax” as “an enforced contribution to provide for the support of government,” while a “penalty” is “an exaction imposed by statute as punishment for an unlawful act.” The two terms are not interchangeable.
Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767 (1994): The Court emphasized that tax statutes serve purposes “quite different from civil penalties,” reinforcing the conceptual and constitutional separation of taxes and penalties.

By invoking these authorities, the Eleventh Circuit underscores that:

Calling something a “civil penalty” and designing it to punish noncompliance (like failing to file an FBAR) makes it a penalty, not a tax; therefore, it does not automatically inherit all procedural protections associated with tax collection.

5. Reeves v. Astrue, 526 F.3d 732 (11th Cir. 2008)

Reeves is cited for descriptive support: it defines “administrative offset” as withholding federal payments to satisfy debts owed to the government. The opinion uses Reeves to:

Clarify what an administrative offset is, and
Distinguish it from a tax levy under I.R.C. § 6331.

This distinction is pivotal: CDP rights in § 6330 are triggered by a levy to collect tax, not by an administrative offset collecting a nontax debt.

6. United States v. Schwarzbaum, 24 F.4th 1355 (11th Cir. 2022)

Schwarzbaum, like Rum, involved judicial review of FBAR penalties in federal district court. The panel cites it to:

Illustrate that FBAR disputes have historically proceeded in district court, and
Support the proposition that district courts and the Court of Federal Claims are the correct fora for FBAR litigation.

7. Taxpayers’ Authorities Distinguished: Mason, Lee, Jennette, and Farhy

The Jenners cited several cases in support of their claim that “penalties” can receive CDP review. The Eleventh Circuit rejects these by emphasizing that each involves penalties imposed under the Internal Revenue Code, not under the Bank Secrecy Act:

Mason v. Commissioner, 132 T.C. 301 (2009), and Lee v. Commissioner, 144 T.C. 40 (2015): Both involve trust fund recovery penalties under I.R.C. § 6672 (employer’s failure to remit withheld employment taxes). These penalties are:
- Codified in Title 26,
- Directly related to tax liabilities (withheld income, Social Security, Medicare taxes), and
- Collected through the same levy mechanisms that trigger CDP rights.
Jennette v. Commissioner, 115 T.C.M. (CCH) 1204 (2018): Involves:
- Penalties under I.R.C. § 6702 for frivolous tax submissions, and
- Penalties for unpaid tax liabilities under Title 26.
- Again, these are tax‑related penalties administered and collected under the Internal Revenue Code, not the Bank Secrecy Act.
Farhy v. Commissioner, 100 F.4th 223 (D.C. Cir. 2024): Concerns penalties under I.R.C. § 6038(b) for failure to furnish information about foreign income streams. Though substantively similar to FBAR in that it involves foreign reporting, Farhy still arises from Title 26 and addresses the IRS’s authority to assess such penalties, not the Tax Court’s jurisdiction over Title 31 penalties.

The Eleventh Circuit’s key distinction is:

All of these cases involved penalties codified in Title 26 and collected through Title 26 mechanisms, so the CDP framework applied. FBAR penalties, by contrast, are codified in Title 31 and collected via Title 31 mechanisms, and therefore fall outside the Tax Court’s CDP jurisdiction.

C. The Court’s Legal Reasoning

1. Tax Court Jurisdiction Is Limited to Title 26

The starting point is I.R.C. § 7442:

“The Tax Court and its divisions shall have such jurisdiction as is conferred on them by this title…”

“This title” is Title 26, the Internal Revenue Code. The Tax Court does not have:

General federal question jurisdiction (unlike district courts), or
A free‑floating authority to resolve any dispute in which the IRS happens to be involved.

Instead, each category of Tax Court jurisdiction must be grounded in a specific Title 26 provision (e.g., deficiency jurisdiction, CDP review, certain whistleblower awards, etc.). The panel emphasizes this structural limit, echoing Roberts.

2. FBAR Penalties Are Not Taxes and Are Not Imposed Under Title 26

The panel then examines the nature and source of FBAR penalties:

Source: 31 U.S.C. § 5321(a)(5) (and related subsections) authorizes civil penalties for FBAR violations. This is in Title 31, not Title 26.
Label and function: The statute explicitly calls the exaction a “civil penalty,” and its purpose is to punish/reporting noncompliance and deter financial secrecy, not to raise revenue to fund government operations.

Applying La Franca and Kurth Ranch, the court concludes that:

FBAR penalties are “penalties,” not “taxes,” and the fact that the IRS administers them does not transform them into taxes or fold them into the Internal Revenue Code.

3. CDP Procedures Apply Only to Levies to Collect Unpaid Taxes

I.R.C. § 6330 presupposes:

An “unpaid tax” under Title 26, and
A proposed IRS levy under I.R.C. § 6331 to collect that unpaid tax.

The statutory text repeatedly references “tax,” “taxpayer,” and the relationship between the “unpaid tax” and the “proposed levy.” There is no indication that Congress intended CDP procedures to apply to:

Non‑tax debts, or
Penalties imposed under other titles of the U.S. Code and collected by other statutory mechanisms.

Because FBAR penalties:

Are not “taxes,” and
Were not being collected via an I.R.C. levy but via 31 U.S.C. § 3716 administrative offset,

the CDP framework does not apply, and § 6330(d)(1) cannot furnish jurisdiction.

4. Administrative Offset Is Not a Levy

The court underscores the distinction between:

Levy (I.R.C. § 6331): A “legal seizure of property” by the IRS to collect a tax debt, after notice and demand, falling squarely under Title 26 and triggering CDP rights.
Administrative offset (31 U.S.C. § 3716; 31 C.F.R. § 5.1): Withholding federal payments owed to a debtor to satisfy a nontax debt, authorized by Title 31 and administered through programs like the Treasury Offset Program.

Although both involve the government withholding money, they are statutorily distinct remedies, and Congress built separate procedural frameworks for each:

Levy → CDP → Tax Court review, but only for taxes (Title 26).
Administrative offset → Title 31 notice and contest rights, but no CDP and no Tax Court jurisdiction.

The court notes that Title 31’s notice requirements (31 U.S.C. § 3716(a)(1)-(4)) are “distinct from and incompatible with” § 6330’s requirements, reinforcing that the two systems are not interchangeable.

5. The May 2023 IRS Letter Was Not a CDP “Notice of Determination”

Even if one hypothetically ignored the tax/penalty and Title 26/Title 31 distinctions, the Jenners still could not prevail because:

A Tax Court CDP case requires a notice of determination issued by the IRS Independent Office of Appeals after a CDP hearing.
The May 2023 IRS letter did not:
- Result from a CDP hearing,
- Constitute a CDP “determination” on a proposed tax levy, or
- Pretend to be such a determination.
Instead, it simply explained that:
- FBAR penalties “are not tax assessments subject to 26 U.S.C. § 6330,” and
- The proper avenues for judicial review are district court or the Court of Federal Claims.

Thus, even as a procedural matter, the jurisdictional gateway required by § 6330(d)(1) was never opened.

6. Delegation to the IRS Does Not Change the Underlying Statutory Nature

The Jenners emphasized that it is the IRS, not some separate bureau, that assessed and collected their FBAR penalties. The court rejects the significance of this point:

The Secretary of the Treasury delegated BSA enforcement authority to FinCEN, which in turn delegated FBAR enforcement to the IRS.
This chain of delegation is administrative, not legislative; it does not alter the statutory source or character of the penalty.

In the panel’s words:

“But this series of delegations has not converted the FBAR penalties into taxes.”

To illustrate, the Commissioner posited an analogy: no one would assume that a civil penalty under another title—e.g., a Title 16 penalty for defacing archaeological resources—suddenly becomes a “tax” subject to Tax Court CDP review simply because the IRS might be enlisted to help collect it.

7. Proper Fora for FBAR Challenges

Finally, the court clarifies where FBAR disputes belong:

United States district courts (as in Rum and Schwarzbaum), and
The U.S. Court of Federal Claims.

The panel expressly declines to opine on the merits of the Jenners’ statute of limitations defense, but notes that such defenses must be raised in those fora, not in Tax Court.

D. Clarified Rule / Holding

The central rule emerging from Jenner can be stated as follows:

FBAR civil penalties imposed under 31 U.S.C. § 5321 are not “taxes” imposed under Title 26 and are collected as nontax debts via Title 31 mechanisms such as administrative offset. Consequently:

They are not subject to the Internal Revenue Code’s collection‑due‑process (CDP) levy review procedures in I.R.C. §§ 6330 and 6331;
The IRS has no obligation to afford a CDP hearing regarding their collection;
No CDP “notice of determination” can issue with respect to them; and
The U.S. Tax Court lacks jurisdiction under I.R.C. § 6330(d)(1) and § 7442 to review such penalties or the administrative offsets used to collect them.

IV. Complex Concepts Simplified

1. Tax Court vs. District Court vs. Court of Federal Claims

Tax Court: A specialized federal court with jurisdiction limited to disputes expressly authorized by the Internal Revenue Code, such as:
- Income tax deficiencies before payment,
- Collection‑due‑process (CDP) levy/lien determinations,
- Certain penalty disputes and whistleblower cases.
It generally offers a pre‑payment forum for tax disputes.
U.S. district courts: General trial courts of the federal judiciary, with broad authority to hear civil actions arising under federal law, including government suits to collect FBAR penalties and taxpayer refund claims (subject to jurisdictional prerequisites).
U.S. Court of Federal Claims: A specialized Article I court with jurisdiction over monetary claims against the United States, including many tax refund and federal monetary liability cases.

2. FBAR and the Bank Secrecy Act

An FBAR (Report of Foreign Bank and Financial Accounts) is an annual report required for U.S. persons with certain foreign financial accounts. The obligation and penalty are not part of the Internal Revenue Code; they arise under:

31 U.S.C. § 5314 (reporting requirement), and
31 U.S.C. § 5321 (civil penalties for violations).

Although the IRS administers FBAR penalties, they remain Bank Secrecy Act penalties, not taxes.

3. Civil Penalty vs. Tax

Tax: A compulsory contribution to the government’s general revenue—e.g., income tax, payroll tax—designed primarily to fund government operations.
Civil penalty: A monetary exaction imposed as punishment or deterrence for violating a legal obligation—e.g., late‑filing penalties, FBAR penalties, environmental fines.

The Supreme Court has insisted that these are distinct concepts. A penalty does not become a tax merely because the IRS administers it.

4. Collection‑Due‑Process (CDP) Hearings

CDP hearings are procedural safeguards created by I.R.C. §§ 6330 and 6331:

Before levying a taxpayer’s assets to collect an unpaid tax, the IRS must:
- Send written notice of intent to levy and of the right to a CDP hearing,
- Identify the unpaid tax liability, and
- Give time to request a hearing in the IRS Independent Office of Appeals.
In a CDP hearing, the taxpayer can:
- Challenge the appropriateness of collection,
- Propose collection alternatives (installment agreements, offers in compromise), and
- In some cases, dispute the underlying tax liability.
After the hearing, Appeals issues a “notice of determination,” which the taxpayer can challenge in Tax Court.

These rights exist to protect taxpayers from abusive or erroneous levies to collect taxes, not to give universal pre‑collection hearings for every category of federal debt.

5. Administrative Offset vs. Levy

Levy (I.R.C. § 6331): A legal seizure of a taxpayer’s property (such as bank accounts, wages) by the IRS to collect a tax debt. It is specific to tax collection and triggers CDP rights.
Administrative offset (31 U.S.C. § 3716): A broader debt‑collection tool allowing federal agencies to withhold federal payments (like tax refunds, Social Security benefits) to recover a nontax debt owed to the government. It is not governed by the CDP provisions of the Internal Revenue Code.

In Jenner, the government collected FBAR penalties through administrative offset, not through a tax levy.

6. Jurisdiction

“Jurisdiction” refers to a court’s legal authority to hear and decide a case. For the Tax Court:

Jurisdiction must be affirmatively granted by the Internal Revenue Code,
It cannot be created by consent of the parties or by analogy to other cases, and
Courts construe such grants strictly.

Because no Title 26 provision extends Tax Court jurisdiction to FBAR penalties or Title 31 administrative offsets, the court lacks authority to adjudicate disputes like the Jenners’.

V. Impact and Future Implications

1. Reinforcement of the Tax Court’s Jurisdictional Limits

The opinion reinforces core principles about the scope of Tax Court authority:

The Tax Court is not a general “IRS court.”
It cannot hear disputes simply because the IRS is involved.
Its jurisdiction is tethered to specific grants in the Internal Revenue Code and does not automatically expand to federal penalties under other titles, even when the IRS administers them.

Practitioners must carefully analyze the statutory source of any liability and the statutory mechanism of collection before assuming Tax Court is available.

2. Practical Consequences for Taxpayers Facing FBAR Penalties

For individuals assessed with FBAR penalties in the Eleventh Circuit (and, practically, nationwide), Jenner confirms that:

There is no right to a CDP hearing regarding FBAR penalties, even if the IRS or Treasury is withholding federal payments.
They cannot obtain pre‑collection review of FBAR penalties in the Tax Court under § 6330(d)(1).
Their procedural protections lie instead in:
- Title 31’s notice and contest rights around administrative offset, and
- Subsequent litigation in U.S. district court or the U.S. Court of Federal Claims, either:
  - As defendants in government collection suits (e.g., Rum, Schwarzbaum), or
  - Through appropriately structured affirmative suits (e.g., refund‑type claims, subject to jurisdictional constraints).

3. Clarification Across the Tax/FBAR Interface

FBAR penalties, though often administered alongside tax audits and assessed by IRS personnel, are now firmly cabined as:

Non‑tax civil penalties under Title 31,
Outside the tax deficiency and CDP systems, and
Not within Tax Court jurisdiction.

This separation means that procedural strategies familiar in tax controversies (e.g., leveraging CDP to obtain pre‑collection judicial review in Tax Court) are unavailable in the FBAR context.

4. Significance for Other Non‑Title‑26 Penalties Administered by the IRS

The court’s reasoning is not limited to FBAR. Its logic applies to any penalty:

Whose substantive source is outside Title 26, and
Which is collected through statutes and mechanisms outside the Internal Revenue Code.

If the IRS is tasked with administering another agency’s civil penalty regime (analogous to FBAR), taxpayers should not assume Tax Court or CDP remedies are available unless Congress explicitly says so in Title 26.

5. Non‑Precedential but Persuasive Authority

The opinion is marked “NOT FOR PUBLICATION,” which under Eleventh Circuit rules means:

It is not binding precedent in the same way a published opinion is, but
It is still persuasive authority, and
It strongly signals how the Eleventh Circuit will treat similar arguments in future cases.

Given that it is consistent with the court’s earlier comments in Rum and with broader doctrinal trends, it likely reflects a settled institutional view rather than a one‑off resolution.

VI. Conclusion

Jenner v. Commissioner crystallizes a key jurisdictional and procedural boundary:

FBAR penalties are not taxes; they are Title 31 civil penalties collected as nontax debts, and they do not carry with them the Internal Revenue Code’s collection‑due‑process protections or Tax Court review.

The Eleventh Circuit grounds its holding in:

The text of the Tax Court’s jurisdictional statute (I.R.C. § 7442),
The limited scope of CDP jurisdiction under I.R.C. § 6330(d)(1),
The statutory characterization of FBAR liabilities as civil penalties in Title 31,
The Supreme Court’s long‑standing tax/penalty distinction, and
The structural separation between tax levies (Title 26) and administrative offsets (Title 31).

For taxpayers and practitioners, the case underscores the importance of carefully identifying:

The title under which a liability is imposed,
The mechanism by which it is collected, and
The specific jurisdictional grant authorizing judicial review.

In the realm of FBAR enforcement, the path to judicial review runs through the district courts and the Court of Federal Claims, not the Tax Court and not through the CDP procedures built for tax levies. Jenner therefore serves as a clear guidepost in the increasingly complex intersection of tax administration and financial‑crimes enforcement.