Supreme Court Passes on Case Challenging IRS Penalty Approval

The US Supreme Court rejected a bid Monday to review a physician’s case alleging that penalties from disallowed tax deductions for a microcaptive insurance arrangement were invalid because an IRS agent failed to obtain proper written approval.

Bernard Swift, the owner of Texas MedClinic, asked the high court to resolve a widening conflict over the interpretation of IRC Section 6751(b), which requires approval by a supervisor on an initial determination before a penalty is issued by the agent handling a case.

In July 2025, the US Court of Appeals for the Fifth Circuit held Swift wasn’t entitled to premium ...