At the audit phase of a tax dispute, our involvement with the IRS can range from minimal to extensive, depending on the circumstances. We have broad experience in “behind-the-scenes” assistance in strategizing and responding to audit information requests in a way that best reflects the merits of the taxpayer’s return position and that preserves the attorney-client, work product and other applicable privileges. We also have extensive experience with special procedures, such as summons enforcement proceedings, requests for technical advice, closing agreements, fast track and accelerated issue resolution. As needed, we interact with the IRS revenue agents and field specialists, including ISP specialists, engineers, employee benefits specialists and international specialists.
At the administrative appeals phase of a tax dispute, we are actively involved in the oral and written advocacy of the client’s position, and we typically lead the negotiations with the IRS Appeals Officer and Technical Guidance Coordinator to determine whether the dispute can be favorably resolved without litigation. We have appeared at most of the IRS Appeals Offices throughout the nation.
If the dispute cannot be resolved administratively, we strategize with the client on the best choice of forum for litigating the tax dispute, taking into account the payment of tax, trial location, judges, government attorneys, timing and nature of the trial, settlement authority, publicity of proceedings, evidentiary rules, procedural rules, appellate jurisdiction and judicial precedent. We have litigated cases in the U.S. Tax Court, the U.S. Court of Federal Claims, district courts and appellate courts around the country. We also have successfully settled or mediated cases after they were docketed for litigation.
We have significant expertise with cases of first impression, cases involving industry-wide issues and cases involving complex structured transactions. For example, our cases have involved lease-leaseback transactions, sale-leaseback transactions, REIT transactions, contingent liability transactions, basis-shifting transactions, cellular telephone commissions, acquisition-related intangibles, research and development tax credits, credit card fee income and loan origination costs. We also have extensive experience on issues involving the deductibility or capitalization of business expenditures.
Our tax litigators played a key role on the Alston & Bird team that assisted the Bankruptcy Examiner in his investigation of Enron. Our tax controversy specialists analyzed transactions consummated by Enron’s tax department in which Enron used large internal asset reorganizations to record deferred tax assets and increase financial accounting income. This engagement has given us unparalleled expertise to analyze transactions and provide clients with an assessment of their litigation risk.
Today, our clients are operating in an environment with more burdensome requirements and greater demands for transparency by the financial statement auditors and the IRS. This environment is largely the result of (i) the tax shelter initiatives by the IRS and other tax authorities after the Enron bankruptcy in 2001, (ii) the enactment of the Sarbanes-Oxley Act in 2002 and (iii) the issuance of FASB’s Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (FIN-48) in 2006. Our litigators have both tax and accounting expertise and, as a result, are routinely involved with FIN-48 litigation risk assessments and other compliance issues.
Chambers USA: America’s Leading Lawyers for Business ranked Alston & Bird’s tax controversy practice among the leading practices in the United States.
The Legal 500-United States: The Legal 500 recognized Alston & Bird as a leading firm in tax controversies.
Best Lawyers: Our tax litigators have been listed in The Best Lawyers in America, American College of Tax Counsel and Georgia Super Lawyers magazine.
Bringing Value to Our Clients
A successful client relationship requires expertise, professionalism, responsiveness and a dedication to the client and their tax disputes. In strategizing with our clients on the best approach for a successful resolution of their disputes, we recognize that success in any given tax dispute cannot be measured by a single standard. Success varies by client and by dispute. As a result, we always consider our client’s goals, the accounting impact of the tax issues, the merits of the substantive issues, the hazards of litigation, the reoccurrence of the issues in the industry, the impact on future years and the ability to resolve a dispute without litigation. Even if settlement initially appears likely, we never ignore the possibility of litigation and, therefore, we keep a litigation strategy in mind during the entirety of the representation. There are strategic decisions to be made throughout the life of the tax dispute that can impact the outcome of the disputed issues and, therefore, our client’s overall success. Clients hire us because of our dedication to this success.