Sometimes you cannot avoid litigating a tax controversy with the Internal Revenue Service or with a state tax authority. The dollar value of the issue may be too large for the taxpayer to settle, there may be irresolvable disputes about the facts, or the parties may simply have different views of what the applicable law means.
Caplin & Drysdale's tax litigators can help you get the results you need. Our tax litigators have extensive experience in tax law, tax procedure, and winning tax cases. We have more than 30 years experience litigating all types of tax controversies, from individual tax liability and collection disputes to the largest, most complex corporate deficiency and refund litigation. We have represented taxpayers in the U.S. Tax Court, the Court of Federal Claims, and Federal district courts nationwide. We have handled appeals to all of the Federal courts of appeal and to the U.S. Supreme Court.
Always sensitive to the cost of litigation, we endeavor to work with our client to identify the issues that are likely to be critical to the litigation. We focus our efforts on those key issues, often beginning while the audit is still underway, so that we are in a position to push for the most favorable pre-trial settlement or to present the strongest case at trial. When a Caplin & Drysdale litigator takes your tax controversy to court, the judge and the opposing party will be presented with the facts and the law in the most persuasive light.
- The IRS claimed that mailing list rental income received by two tax exempt charities, Common Cause and Planned Parenthood Federation of America, was taxable as unrelated business income.
Result: Caplin & Drysdale represented both organizations from the filing of their Tax Court petitions, through discovery and negotiations with the government, to a complete victory in the Tax Court. The IRS chose not to appeal the Tax Court's decisions and ultimately abandoned its position that mailing list income is taxable as unrelated business income.
- Two unrelated companies that were parties to a complex corporate disposition filed income tax returns claiming the same $250 million tax loss. The IRS proposed to recast the disposition as a stock redemption and disallowed the loss to both companies.
Result: We filed a Tax Court petition on behalf of one of the companies and moved to consolidate our client's case with that of the other company. The Tax Court entered summary judgment against the IRS in the consolidated proceeding, and we were then able to negotiate a three-way settlement.
- A legal publisher sued the IRS under the Freedom of Information Act to obtain Advance Pricing Agreements (APAs) and related return information, and the IRS agreed to produce them notwithstanding the confidentiality concerns of the taxpayers that participated in the APA program.
Result: After the IRS' concession, we filed an amicus curiae brief on behalf of several taxpayers who had obtained APAs, arguing that the IRS' position was erroneous and would result in an unauthorized disclosure of our clients' confidential information. Our intervention forced the court to consider the legal issues, which helped provide adequate time for Congress to debate on the policy issues. Congress enacted an amendment to the Internal Revenue Code vindicating our clients' position that APAs and all related tax return information are confidential.
- Two separate multinational corporations recently came to Caplin & Drysdale for advice on how to recover millions of dollars of interest on overpayments when the statute of limitations was about to expire.
Result: Caplin & Drysdale filed refund claims and civil actions in the U.S. Court of Federal Claims, helped negotiate the claims with the IRS and Justice Department, and ultimately settled the interest computation issues. As a result, each company recovered millions of dollars.
We can guide you through the audit and litigation process with strategic advice and effective legal representation at all of the following stages:
Dealing with IRS Examiners
Responding to information requests or summonses
Requesting technical advice from the IRS National Office
Negotiating closing agreements and other settlements
Preparing protests and negotiating settlements in the IRS Appeals Office
Choosing the proper forum and strategy for tax litigation
Litigating your case at trial and on appeal