Representative Matters

Jed-Silversmith

Jed defended an individual accused of filing false personal income tax returns in a two-week jury trial in federal court in Pittsburgh. After trial, the defendant received a sentence which was 40% below the advisory guideline range. His case is currently on appeal.

Jed has represented a mother and her daughter in pursuing an ancillary claim in a criminal forfeiture case litigated in federal court in Philadelphia.

Jed has represented individuals who have undisclosed foreign bank accounts including one individual who was assessed penalties of over $300,000 after failing to report his foreign bank accounts to the IRS.

Jed has counseled several businesses and charitable organizations on the availability of the Employee Retention Tax Credit and assisted them with filing amended tax returns.

Jed has represented a chain of Chinese food restaurants in the Pennsylvania Commonwealth Court. The restaurants were accused of deleting sales records by using a “zapper.” The Department of Revenue has assessed over $1 million in unpaid tax, interest and penalties.

Jed has represented individuals in sensitive audits and in IRS voluntary disclosures.

Jed represented a former Eastern European public official in a very significant civil forfeiture case brought in federal court.

Jed is a former federal prosecutor who tried ten white collar criminal cases to verdict as a government lawyer and a defense attorney in federal court. More importantly, Jed has experience ensuring that cases are never brought. Matters for which clients seek Jed’s services include:

Responding to IRS-CI

IRS-CI will frequently approach subjects of criminal investigations both for an interview or documents (by way of a record request called a summons). Jed has experience advising clients on how (or if) they should respond to interview requests as well as responding to summonses. Jed is familiar with the rules pertaining to these summonses and can advise taxpayers on their rights, including their right not to produce information.

Search Warrants

The IRS-CI may search a taxpayer’s home, business or computer. Jed has experience helping taxpayers whose homes have been searched or property has been seized.

Tax Professional Representation

Besides representing taxpayers, Jed has experience counseling tax return preparers responding to requests for information. Tax professionals have legal obligations that mandate what can or cannot be produced in response to summonses, subpoenas and other requests for information. Jed has advised accountants and other tax professionals regarding how to respond to these information requests in both IRS litigation and in general civil litigation.

Criminal Tax Charges

Jed has prosecuted and defended dozens of criminal tax cases and is familiar with charges including tax evasion (26 U.S.C. § 7201) (evasion of assessment and evasion of payment), filing a false income tax return (26 U.S.C. § 7206(1)), willful failure to collect or pay over tax (26 U.S.C. § 7202), aiding and assisting in the preparation of a false return (26 U.S.C. § 7206(2)), willful failure to file a return or pay tax (26 U.S.C. § 7203), delivery of a fraudulent return (26 U.S.C. § 7207), and attempt to influence the administration of the tax laws (26 U.S.C. § 7212(a)).

Non-filing

Individuals with a history of unfiled tax returns may need to come into compliance. Jed counsels clients on the best steps to avoid criminal prosecution and minimize civil penalties.

IRS Voluntary Disclosure

Jed has helped clients, who have substantial criminal exposure, enter the IRS voluntary disclosure program and subsequently file tax returns or amended tax returns.

Federal Sentencing Guidelines

Defendants who plead guilty or are convicted are sentenced under the "T" table of the federal sentencing guidelines. Jed has handled dozens of cases involving the tax federal sentencing guidelines. Jed’s depth of knowledge helps defendants who wish to minimize their criminal exposure.

Collateral Consequences

A federal felony conviction has substantial collateral consequences. A defendant who is convicted faces a term of incarceration. However, criminal tax cases can result in restitution orders, additional Tax Court litigation regarding penalties, and other hardships like foregoing the right to own a weapon or vote, as well as immigration consequences. Jed has experience advising clients in these areas.

Being contacted by IRS-CI is a life altering event. IRS criminal investigations impact not just the individual being targeted but also family members, business partners and others. Even an indictment can cause substantial reputational harm. Jed has the experience to help avoid an indictment as well as helping to navigate these issues to obtain the best possible outcome.

Taxpayers and others may often find themselves in civil litigation with the IRS. IRS civil litigation can take a number of different forms. Jed has substantial experience litigating these types of disputes. Here is a sample of the matters that Jed can help with

IRS Refund Litigation

A taxpayer who overpaid a federal tax may file a refund claim. Taxpayers must first file a Form 843, request for an abatement and let the IRS rule on this administrative request. Once that request is denied, the taxpayer can initiate a lawsuit in either federal district court of the U.S. Court of Federal Claims.

Tax Court Litigation

Taxpayers may challenge audit determinations at the Tax Court.

FBAR Litigation

Taxpayers who have control over a foreign account whose value exceeds $10,000 must disclose this account to the Treasury Department by filing a FinCEN Form 114 annually. The Government will assess a civil penalty of up to 50% of the balance of the account if a taxpayer fails to disclose the account. After being assessed, the IRS files a civil suit to collect the penalty. During this lawsuit, the taxpayer presents evidence. Jed has first-chair experience representing taxpayers in these disputes.

Wrongful Levy

A levy is a seizure of property. If a taxpayer has an unpaid tax, the IRS will levy the taxpayer’s bank accounts. Sometimes a taxpayer may wish to challenge the seizure. Jed has experience handling these types of disputes. Many times, the party challenging the seizure is not the taxpayer. Jed's experience advising individuals and businesses whose property was wrongfully levied is second to none.

Trust Fund Tax Litigation

If a company fails to pay its payroll taxes, the IRS has the ability to impose a penalty on individuals who were responsible for remitting the payroll tax. These individuals are personally responsible for paying the employee’s share. The decision to impose the penalty is made by an IRS employee, but can be challenged in court. Jed can help those allegedly responsible persons challenge the penalties imposed against them.

Suits to Reduce an Assessment to Judgment

The IRS generally has ten years to collect any unpaid tax (although certain exceptions may apply). After ten years, the IRS must file a lawsuit to reduce the assessment to a judgment. Jed has experience advising taxpayers on these types of lawsuits.

Judicial Foreclosure

The IRS may initiate a lawsuit to foreclose on real estate owned by a taxpayer. Jed has experience with these types of lawsuits and can help assert meritorious defenses.

Injunctions

Tax return preparers and other tax advisors (called promoters) are sometimes sued because the IRS believes that they have engaged in a pattern of aiding and assisting in the filing of false tax returns. Jed has experience appearing in injunctive actions and can help IRS tax professionals.
Being sued by the IRS can be an intimidating experience. Let Jed help you.

Jed has substantial experience representing individuals and companies who file civil and criminal forfeiture claims to re-claim their seized property. Forfeiture is a quasi-criminal remedy that allows the Government to confiscate property because it is tainted by criminal conduct.

Civil Forfeiture

Civil forfeiture is a lawsuit brought against property. It is frequently captioned: “United States v. $3,000 in U.S. Currency” etc.

  • Individuals who have a financial stake in the litigation such as property owners may attempt to recover the property by filing a claim. These “standing” rules are very broad and even indirect financial interests may give rise to file a claim in the litigation.

 

  • The civil forfeiture rules are arcane. Jed has experience with these rules and can advise clients about potential problems with the Government’s case.

Criminal Forfeiture and Restitution

Criminal forfeiture is charged as part of a criminal indictment. Defendants whose indictments include high-dollar forfeiture counts and restitution claims should consult a lawyer with expertise in this field. 

  • A defendant has a right to a jury trial on the forfeiture issues. Forfeiture can pose unique evidentiary concerns and a defendant may wish to challenge certain forfeiture issues during his criminal trial. Understanding these evidentiary considerations may give a defendant leverage during plea negotiations.

 

  • After trial, the Government may pursue assets unrelated to the criminal activity known as substitute property.

Ancillary petitions

Parties with an interest in property subject to criminal forfeiture may file an ancillary petition after the defendant’s sentencing. These property owners file their own claim which is pursued under the civil rules. The claims involve complex issues of state property law and asset tracing.

International Forfeiture

Jed has experience working with attorneys in European and Caribbean countries on forfeiture issues. Law enforcement often works collaboratively with foreign governments. Defendants also need an attorney with similar international experience.

Money Laundering

Federal law makes it a felony to engage in a financial transaction with proceeds of a specified unlawful activity. The money laundering statutes impose harsh penalties for those individuals who knowingly engage in transactions with “tainted” funds. However, money laundering prosecutions involve specific rules and additional burdens of proof on the Government.
Jed has advised clients on all these types of matters.
Jed had experience advising clients who have failed to file certain tax forms that require disclosure of foreign interests. These forms include:

FinCEN Form 114

FinCEN Form 114, which requires the reporting all foreign financial accounts, whose value exceeded $10,000 at any time during the calendar year, if the taxpayer had a financial interest in, signature authority or other authority over the accounts

Form 1040NR,

Form 1040NR, U.S. Nonresident alien income tax return, which requires the reporting of U.S. source income by a foreign person

IRS Form 3520

IRS Form 3520 which requires the reporting of transactions with a foreign trust (i.e., distributions) or gifts provided by a foreign person (or foreign business)

IRS Form 3520A

IRS Form 3520A which is required to be filed by a trustee of a foreign trust or the U.S. "owner" of a foreign trust

Form 5471

IRS Form 5471, which is required to be filed by a U.S. person who has an interest in certain foreign corporations

Form 5472

IRS Form 5472, which is required to be filed by foreign-owned sole member limited liability company and foreign corporations with U.S. source income

Form 8938

IRS Form 8938, which is required to be filed by individuals who own foreign assets

Form 8865

IRS Form 8865, which is required to be filed by individuals who have an interest in a partnership outside of the United States

The rules regarding these forms are incredibly complex. Yet, the IRS can impose very significant penalties on individuals who fail to file the proper forms in a timely manner. Taxpayers who fail to report their foreign financial interests subject themselves to potentially enormous civil penalties. Many times, the taxpayer has no choice but to pay the penalties before they can challenge the IRS’s determination. Further, in many cases, a taxpayer’s entire tax return can still be audited until the correct international reporting forms are filed.

The IRS has a number of amnesty programs that are open to taxpayers. The availability of the specific amnesty programs depends on which form is unfiled, where the taxpayer lives, and how much (if any) tax is owed. In some cases, the taxpayer will need to certify in writing that the failure to file the relevant forms was non-willful (i.e., a mistake).

Jed can help the following types of taxpayers:

  • U.S. citizens living and working abroad
  • U.S. citizens and other U.S. residents with foreign-sourced income
  • Foreign persons with U.S.-sourced income
  • Foreign trusts with U.S. beneficiaries especially U.S.-based settlors
  • U.S. and non-U.S. entertainers with worldwide income expatriates
    Amnesty programs including the Offshore Voluntary Disclosure Program and the Streamlined program
    Jed has extensive experience assisting individuals and businesses in taking advantage of various federal and state credits.

    Pennsylvania Educational Investment Tax Credit

    Jed has worked closely with Pennsylvania businesses that have taken advantage of Pennsylvania’s Educational Improvement Tax Credit program. This is a program that allows individuals and businesses to receive a 90% state income tax credit for amounts given to select private schools and other 501(c)(3) organizations.

    Federal Employee Retention Tax Credit

    The federal employee tax credit is an employment tax credit available to employers who continued to employ workers during the pandemic. To be eligible, a business must see a decline or gross receipts or be impacted by a government order that had more than a nominal restriction on operations.   Thus, the credit is available to certain businesses even if their revenue did not decline. Further, a business may take advantage of this credit even if the business received PPP funds. Jed has helped a range of businesses (including non-profits) navigate this program which can provide a much-needed boost to the fiscal bottom line.

    Transferable Tax Credits

    Jed also partners with licensed tax credit brokers who market Pennsylvania state income tax credits including the following Pennsylvania credits:

    • Historic preservation tax credits
    • Research and Development
    • Keystone Opportunity Zone
    • Keystone Innovation Zone (KIZ) Tax Credits
    • Film Tax Credits

    (Jed is not currently licensed with the Commonwealth of Pennsylvania to broker these transactions)

    Cryptocurrency is a digital currency that serves as a medium exchange. Cryptocurrency is not backed by any government and is distributed on blockchain ledger. Notable types of cryptocurrency include Bitcoin, Ethereum and Litecoin.

    Cryptocurrency poses a number of unique challenges for the individuals who distribute it, hold it on behalf of third parties and own it. Jed has provided regulatory guidance to businesses on their registration requirements including anti-money laundering (“AML”) due diligence requirements. Notably, Jed has advised several businesses on their obligation to file with FinCEN and/or state regulators. Jed also has advised individuals who hold cryptocurrency on their potential tax issues. Specifically, Jed has provided guidance or spoken on the following:

    • The taxation of fungible cryptocurrency like Bitcoin and Ethereum
    • The taxation of non-fungible tokens(“NFTs”)

    IRS guidance including analysis of IRS Bulletin 2014-16 and other guidance

    Foreign bank account reporting requirements for cryptocurrency held in foreign private wallets
     

    • Availability of the Voluntary Disclosure program for unreported cryptocurrency transactions

    Jed works closely with several accounting firms that can provide basis computations and other records for taxpayers who do not have complete records.

    IRS cryptocurrency enforcement is on the upswing. Taxpayers who have unreported cryptocurrency transactions should contact Jed about coming into compliance.

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