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Tax Controversies
Guidance Through Complex IRS Negotiations

Despite pressure and demands from tax regulatory bodies, taxpayers are entitled to many protections while under investigation in a tax controversy or while being pursued for tax collection. Leveraging these protections and navigating the complex process efficiently are paramount to reducing the potential for an adverse determination.

Saul Ewing Arnstein & Lehr’s Tax Controversies Practice has represented hundreds of individuals—both American citizens and those holding foreign passports—and businesses around the world to resolve matters with the Internal Revenue Service (IRS) and various state agencies that involve tens of thousands to many millions of dollars. Our team of skillful negotiators has a tremendous amount of experience with the administrative arm of the IRS, and is also experienced in litigating tax matters in the courts when required or otherwise necessary. Our clients should only pay the proper amount of tax.

Our team consisting of former IRS attorneys and other former IRS enforcement officers regularly handles:

  • Audits
  • Seizures of wages and bank accounts
  • Disclosures of offshore accounts
  • State tax problems
  • Federal tax liens
  • Innocent spouse issues
  • Criminal investigations
  • International tax compliance
  • Tax appeals
  • Negotiations to decrease IRS penalties
  • Tax litigation in the United States Tax Court, district courts and Court of Federal Claims
  • Taxpayer rights matters
  • IRS collection issues

Related Services

Experience

The following list is provided to describe the breadth of matters handled by the Tax Controversies Practice. The results that may be achieved for a client depend on the specific, unique facts of each case and the available evidence. Accordingly, the results achieved in any particular case may vary from those reported below.

  • Successfully litigated several cases in the United States Tax Court. Some of the issues litigated and settled involved valuation matters, substantiation issues, employee versus independent contractor matters, tax shelter enforcement, and collection cases through the Collection Due Process Hearing procedures.
  • Successfully represented several clients in litigation and appeals of penalties related to non-compliance with foreign assets holdings, including FBARs.
  • Successfully litigated a proposed multimillion-dollar IRS adjustment in the United States Tax Court. During the IRS examination stage, the IRS asserted that the client’s treatment of transactional costs incurred in a private equity sale was inappropriate and that certain transactional costs should be capitalized and not expensed at the time.
  • Successfully litigated a multimillion-dollar proposed tax deficiency case through appeal to the U.S. Supreme Court. The IRS asserted that the six-year extended statute of limitations period applied to the taxpayer’s alleged overstatement of basis in his partnership interest. The Firm filed a Motion for Summary Judgment arguing that the extended statute of limitations period did not apply based on an earlier Supreme Court case. The IRS alleged that an inflated basis of stock was the same as an omission of gross income. The Tax Court agreed with the taxpayer that an overstatement of basis in partnership stock is not the same as an omission of gross income and issued summary judgment in favor of the taxpayer and against the IRS. The Seventh Circuit Court of Appeals reversed the Tax Court holding, but the Firm appealed this case to the United States Supreme Court where it was reversed in favor of the taxpayer.
  • Successfully compromised large liabilities with the IRS’s Collection Division on behalf of a Fortune 500 executive.
  • Successfully sought and received injunctions against the IRS Collection Division for improper liens and levies.
  • Represented an individual whose tax obligations had been discharged by the U.S. Bankruptcy Court due to his bankruptcy filing when the IRS levied taxes upon his pay during the bankruptcy and subsequent to the bankruptcy discharge in violation of the automatic stay and permanent injunction. Our attorneys brought a petition to have the IRS held in contempt of court for its continuing violations and the judge found in favor of our client. The judge, in turn, awarded legal fees of the client to be paid by the IRS.
  • Represented hundreds of U.S. taxpayers through the IRS’s voluntary disclosure programs.
  • Successfully represented taxpayers in a case where the IRS alleged that taxpayers committed fraud and should be assessed fraud penalties and liabilities for very old tax years. The IRS would have been precluded from assessing any additional tax in these older tax years but for its assertion that the taxpayers committed fraud. After a lengthy trial, the United States Tax Court held that there was no evidence of fraud and therefore the IRS was time barred from assessing any tax or penalties.
  • Represented an individual as tax counsel in his bankruptcy in New York City in which the IRS sought back taxes that was settled for less than the original amount. The IRS also agreed to a repayment plan through the client’s Chapter 11 bankruptcy.
 

Recognition

The group includes attorneys who have been named to the following lists:

Trade Groups & Associations

Contacts

Robert E. McKenzie
Adam Fayne