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Silver Moss Properties et al. v. Commissioner, docket number 10646-21, is a pivotal Tax Court case addressing a partnership-level dispute under TEFRA involving Silver Moss Properties, LLC. The controversy centered on the claim of a conservation easement deduction taken for property contributed to the Atlantic Coast Conservancy and raised significant procedural and constitutional questions about the imposition of civil fraud penalties.

Conservation Easement Deduction Challenge

The IRS challenged Silver Moss Properties, LLC’s deduction for its conservation easement, asserting that the claimed deduction was improper based on valuation, legal substance, and compliance issues. The partnership structure meant the dispute was adjudicated at the entity level under TEFRA, with all affected partners bound by the final Tax Court determination.

Civil Fraud Penalties and Jury Trial Rights

Central to the proceeding was Silver Moss Properties’ attempt to invoke the Seventh Amendment right to a jury trial for civil fraud penalties, following the Supreme Court’s decision in SEC v. Jarkesy, which held that individuals facing civil penalties from an administrative agency are entitled to a jury trial. The taxpayer argued that the Tax Court, as a non-Article III court, cannot constitutionally impose such penalties without affording a jury trial. This argument was supported by amicus briefs filed on behalf of the Center for Taxpayer Rights and advocated by prominent tax litigators.

Tax Court Ruling

The Tax Court rejected Silver Moss’s request for a jury trial, distinguishing tax penalty proceedings from the context of Jarkesy and affirming its jurisdiction to adjudicate civil fraud penalties. The court reasoned that the IRS’s process does not implicate the same Seventh Amendment concerns, as tax proceedings historically have been conducted in administrative or judicial forums without juries. Accordingly, motions for partial summary judgment on the constitutional grounds were denied, and the Tax Court retained authority over the penalty dispute.

Procedural and Wider Impact

This decision is significant for partnerships, conservation easement cases, and taxpayers at risk of civil fraud penalties. The outcome underscores the limits of jury trial protections in tax controversy, clarifies the scope of Tax Court authority, and suggests that efforts to extend the Jarkesy rationale to tax fraud penalty cases will require further appellate consideration. 

    

Marini & Associates, P.A. 

 

 

for a FREE Tax HELP contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Sources: 

1.       https://www.casemine.com/judgement/us/6294569f714d58f23955e74b 

2.      https://www.leagle.com/decision/intco20250821i34 

3.      https://kostelanetz.com/kostelanetz-files-amicus-briefs-challenge-tax-fraud-penalties/ 

4.      https://www.vitallaw.com/news/llc-not-entitled-to-jury-trial-in-civil-fraud-proceeding-court-retains-jurisdiction-to-adjudicate-penalty-silver-moss-properties-llc-tc/ftd01acf3ebbc49cb41be8aac79d524b0eeb0

5.       http://federaltaxprocedure.blogspot.com/2025/08/tax-court-rejects-sces-hail-mary.html

6.      https://www.law360.com/articles/2379857

7.       https://www.casemine.com/judgement/us/65b5d84d3cd82457c68a7aeb/amp

8.      https://law.justia.com/cases/federal/appellate-courts/F2/758/211/63739/

9.      https://www.currentfederaltaxdevelopments.com

10.   https://taishofflaw.com/2023/09/20/the-tefra-two-step/

11.    https://www.leagle.com/decisions/browse/latest/Us Tax Court

12.   https://www.casemine.com/judgement/us/6294569f714d58f23955e74b?target=amp_similar

13.   http://federaltaxprocedure.blogspot.com/2025/08/tax-court-rejects-sces-hail-mary.html

14.   https://www.vitallaw.com/news/llc-not-entitled-to-jury-trial-in-civil-fraud-proceeding-court-retains-jurisdiction-to-adjudicate-penalty-silver-moss-properties-llc-tc/ftd01acf3ebbc49cb41be8aac79d524b0eeb0

15.    https://www.law360.com/articles/2379857

16.   http://federaltaxprocedure.blogspot.com

17.    https://taishofflaw.com/2023/09/20/the-tefra-two-step/

18.   https://www.casemine.com/judgement/us/65b5d84d3cd82457c68a7aeb/amp

19.   https://www.casemine.com/judgement/us/6294569f714d58f23955e74b

20.  https://taishofflaw.com

20. https://www.courtlistener.com/opinion/4561059/moss-v-commr/

Read more at: Tax Times blog

On July 1, 2025 we posted Supreme Court Limits Nationwide Injunctions: What You Need to Know & Impact on IRS Firings where we discussed that the Supreme Court Limited Nationwide Injunctions and thereby eliminated the District Court injunction of fired IRS employees, with the injunction only appling to those individuals who are parties to the case and the remaining 7000 workers can be fired.

Now TIGTA has released their Report Number: 2025-IE-R028 stating that there have been ensuing court challenges since notices were sent to probationary employees in February 2025 terminating their employment. Subsequently, IRS and Treasury Department leadership decided that all 7,315 probationary employees sent termination notices must return to full work status by May 2025. These employees were notified of their mandatory return date along with onboarding instructions. These employees had previously been placed on administrative leave after court rulings in March 2025. Our evaluation focused on the actions and processes that the IRS followed when it sent termination notices in February and March 2025 to probationary employees.

The IRS identified more than 16,000 employees who were still in their probationary period. After exempting employees who were either deemed essential personnel for tax filing season, had appeal rights, were involved in law enforcement, or were military spouses, the IRS issued termination letters to 7,315 probationary employees. The time between identifying employees and issuing termination notices was 29 days. All probationary employees received the same letter that cited performance as a reason for termination. We confirmed that nearly all the terminated probationary employees either did not have a performance rating on record or were rated as Fully Successful or better. We determined that 51 percent had no performance rating of record. For the remaining 49 percent, we determined that 3,251 (90 percent) had a “Fully Successful” rating, and 305 (8 percent) had an “Outstanding” or “Exceeded Fully Successful” rating. As a result, we conclude that the IRS did not consider individual employee performance when terminating probationary employees.

Prior to the termination notices being sent, senior IRS officials refused to sign the notices and raised concerns that many of these employees did not have documented performance issues. Despite these concerns, the IRS Human Capital Office sent the notices. However, the IRS did not correctly identify all mission critical services and employees when it identified probationary employees who were exempt from termination. After sending out termination notices, the IRS later attempted to rehire a small number of employees who had incorrectly been identified for termination.

In July 2025, the U.S. Supreme Court stayed the federal court’s prohibition on covered agencies implementing Agency Reduction in Force and Reorganization Plans and issuing or executing reduction in force (RIF) notices. At the time we published this report, it is unclear whether any probationary employees will remain reinstated or be terminated in a future large-scale RIF.

    

Marini & Associates, P.A. 

 

 

for a FREE Tax HELP contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

In a significant ruling handed down on August 18, 2025, the U.S. Court of Appeals for the Third Circuit confirmed the IRS’s authority to pursue unpaid taxes decades after the original return, if the fraud that led to a tax underpayment was committed by the taxpayer’s return preparer. This decision emerged from the closely watched case of Murrin v. Commissioner, case number 24-2037.

Stephanie Murrin, the appellant, found herself at the center of a long-running tax dispute due to errors on her old tax returns. These errors, the IRS contended, arose from fraudulent actions by her tax preparer. Notably, there was no claim that Murrin herself intended to evade taxes; the fraud was attributed solely to the professional she hired.

Can the IRS Pursue Old Taxes If a Preparer Committed Fraud?

Central to this case was whether the IRS could “reach back” more than 20 years to collect unpaid taxes when it was the preparer, rather than the taxpayer, who acted fraudulently. Normally, the IRS is bound by statutes of limitation, limiting how long after a return is filed they may pursue collection. An exception exists, however, in cases involving fraud. 

The Third Circuit ruled in favor of the IRS. The opinion, issued on August 18, 2025, states that the statute of limitations for tax collection is suspended in cases of fraud, regardless of whether the taxpayer herself participated in or even knew about the fraudulent activity. This means that if a return preparer commits fraud on a filing, the IRS can act to collect what’s owed, no matter how much time has passed.

Why This Matters

This case puts taxpayers on alert: you can be held responsible for fraudulent acts committed by the people you hire to prepare your taxes, even many years down the road. It’s a stark reminder of the importance of vetting professionals and maintaining personal oversight of your tax filings. For the IRS, the decision reinforces a powerful tool for tax enforcement, deterring potential tax fraud through the actions of preparers.

The Takeaway

Murrin v. Commissioner strengthens the IRS’s hand, confirming that taxpayers may have liability for their preparers’ misconduct, whether or not they had knowledge of it. 

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Sources: 

1.       https://www.law360.com/tax-authority/cases/6669b92710f9844ee6dacfc6

2.      https://www.law360.com/agencies/u-s-court-of-appeals-for-the-third-circuit

Read more at: Tax Times blog

According to DoJ, A Florida man pleaded guilty on August 18, 2025 before Magistrate Judge Kyle C. Dudek for the Middle District of Florida to conspiring to defraud the United States by operating an off-the-books payroll scheme. The plea must be accepted by a U.S. district court judge.

The following is according to court documents and statements made in court: Alexis Garcia conspired with others to operate an illegal, off-the-books cash payroll system for construction workers to avoid paying employment taxes to the IRS and to defraud workers’ compensation insurance companies. Between 2017 and 2019, Garcia managed and directed the operations of Tape Drywall Services Inc., located in Naples, Florida. Contractors entered into agreements with Tape Drywall to provide workers for various construction contracts and provided checks in the name of Tape Drywall for payment. Garcia and his co-conspirator would cash the checks and retain a small percentage as a fee. Garcia and his co-conspirator provided cash to the foremen who used the cash to pay the workers. In total, Garcia and his co-conspirator cashed over 3,600 checks totaling approximately $28 million. 

Garcia and his co-conspirator did not report the wages to the IRS and did not withhold Social Security, Medicare, and federal income taxes from those wage and pay them over to the IRS, as required by law. As a result, Garcia caused a loss to the United States of more than $4.2 million.

In addition, Garcia and his co-conspirator defrauded workers’ compensation companies by substantially misrepresenting the amount of Tape Drywall’s payroll. The misrepresentations resulted in substantially lower insurance payments.

The timely payment of these taxes is critical to the functioning of the U.S. government because, for example, they are the primary source of funding for Social Security and Medicare. 

Garcia is scheduled to be sentenced at a later date. He faces a maximum penalty of five (5) years in prison, as well as a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

 Have Payroll Tax Problems?

 

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP Contact Us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888-882-9243) 

Read more at: Tax Times blog