Tax Controversy

We have extensive experience with special procedures such as summons enforcement proceedings, requests for technical advice, closing agreements, and fast-track and accelerated issue resolution. On your behalf, we interact with the IRS revenue agents and field specialists, including ISP specialists, engineers, employee benefits specialists, and international specialists.

If the dispute cannot be resolved administratively, you need an experienced team to strategically select the logical forum for litigating the tax dispute. We have litigated cases in the U.S. Tax Court, U.S. district courts, bankruptcy courts, and appellate courts around the country. We have also 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, 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 with issues involving the deductibility or capitalization of business expenditures.

Our clients value our ability to evaluate the big picture – we consider and understand 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. At Alston & Bird, we leave no stone unturned.

• Representing a senior specialist at an auction house in an investigation by the Office of the New York State Attorney General into civil tax fraud connected to the purchase of art. 
• Counsel to the audit committee of an approximately $9 billion consumer products manufacturer defending against an SEC and DOJ investigation of the company’s sales practices. 
• Counsel for individuals and corporations in numerous investigations conducted by the DOJ and U.S. Attorneys’ Offices involving allegations related to tax evasion, bribery, wire fraud, and false statements. No charges were brought against any of our clients. 
• Representing individuals in an investigation by the IRS-CID and providing strategic guidance on minimizing any criminal and civil exposure. 
• Conducting a forensic accounting investigation for a consumer health company in response to internal whistleblower contentions. 
• In U.S. Tax Court litigation, obtained a full concession from the IRS regarding worker classification. Florida State University v. Commissioner, No. 3291-20, U.S. Tax Court.
• Resolved a client’s long-running tax dispute with the IRS by negotiating a partial pay installment agreement, saving the client approximately $700 million in penalty and interest payments.
• In U.S. district court refund litigation, obtained a 75% concession from the government in a matter involving penalties for failure to file gain recognition agreements pursuant to 26 U.S.C. § 367(a)(2). AVX Corporation v. U.S., No. 6:20-cv-01244 (D.S.C.).
• In bankruptcy court, represented an investment fund facing significant IRS penalties for failure to provide information returns to investors. Following trial, the court held that no penalties could be imposed because the fund had reasonable cause for the failure to provide returns. In re Refco Public Commodity Pool L.P., 554 B.R. 736 (Bankr. D. Del.).
• Represented the founder and chief executive officer of a publicly traded company in U.S. Tax Court against an IRS assertion of penalties for $400 million of loss transactions. Rare taxpayer victory in which the court found that the taxpayer was not liable for penalties because he acted reasonably and in good faith when deducting the losses. Rawls Trading LP v. Commissioner, 138 T.C. 271.
• Counseled the finance arm of a $50 billion international business throughout the audit in an appeal from an assessment of over $5 million of North Carolina corporate income taxes for multiple tax years and audit cycles, resulting in a confidential settlement of less than 30% of the initial assessment that also preserved substantial net losses for years following the audit period.
• Quashed a criminal investigation of family members and the estate executor involving alleged nondisclosure of assets to the IRS. In a separate, earlier matter, handled a multimillion-dollar gift tax criminal investigation, resulting in the abandonment of the investigation and a settlement with the IRS.
• Represented an investment adviser during the course of a federal grand jury investigation involving allegations of mail fraud, wire fraud, and securities fraud. The investigation was concluded with no charges brought against the client.
• Represented a large public accounting firm’s former partner who was a member of the firm’s tax solutions group in one of the largest criminal tax evasion cases ever tried in the Southern District of New York.
• Represented the executive vice president and head of the low-income tax credit group at a financial services company in a DOJ criminal investigation involving alleged fraudulent use of low-income tax credits.
• Led an audit committee investigation into accounting irregularities at a publicly traded premier global consumer and commercial services company and represented the company in responding to an SEC inquiry into accounting irregularities. 
• Conducted an intensive investigation for the audit committee of a publicly held manufacturer in response to allegations that the company manipulated reserve accounts over multiple fiscal periods. 
• Represented a clothing wholesaler in a criminal tax investigation by the U.S. Attorney’s Office for the Northern District of Georgia. 
• Represented an executive of a cigarette distributor in an investigation by the U.S. Attorney’s Office and ATF alleging the diversion of millions of dollars of cigarettes to avoid various federal and state taxes. The client was not charged. 
• Conducted an internal investigation on behalf of the audit committee of a bank into allegations that the bank president caused certain assets to be overvalued, including reports to the committee, board of directors, and banking regulators. No action was taken by regulators.