It is well established that a taxpayer must pay all tax first before filing a refund suit against the IRS in Federal District court. This is called the Flora rule. In Mendu v. United States, the Court of Federal Claims held that penalties for failure to timely file FBARs (FBAR penalties), “were not subject to the Flora full payment rule, which requires a plaintiff to make payment of the full tax amount before they bring suit in the Court of Federal Claims or any US district court for the refund of any “internal-revenue tax.” Ultimately, the Court concluded, in part, that FBAR penalties are not an internal revenue “tax” – as the FBAR penalty statute falls outside Title 26, the Internal Revenue Code. Instead, they are a mechanism of the Bank Secrecy Act. Under Mendu, taxpayers are permitted to challenge FBAR penalties in the Court of Federal Claims without first having paid the penalties.