Business Law & Litigation Areas of Concentration
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- Tax Controversy
- Trade Secret & Non-Compete Law
- Wage and Hour
An individual or business involved in a tax controversy with the IRS or a state or local tax authority will face a complex set of legal circumstances that may begin with an audit and end in litigation. The ultimate goal of every tax controversy engagement is to achieve a fair and efficient end to the dispute.
Navigating a tax controversy requires a deep understanding of tax law and procedure, coupled with the litigation skills necessary to present the client’s position in the best possible way. Post & Schell’s Tax Controversy Practice features James R. Malone, Jr., an experienced commercial litigator who holds an LL.M. in Taxation.
The Firm represents corporate and individual taxpayers, as well as tax preparers and accountants, involved in tax controversies with the IRS and with state and local tax authorities. The Firm represents clients in every stage of a tax controversy from audit through administrative appeal to litigation and collection. These engagements include:
Audit Defense. The Firm works with taxpayers and their accountants in audits.
Administrative Appeals. Post-audit, the Firm assists clients in determining whether to pursue an administrative appeal or proceed directly to litigation: a successful administrative appeal may lead to a settlement, but an unsuccessful one may provide the government with a better record in subsequent litigation. Where an appeal is warranted, our advocacy skills allow us to portray the client’s position in the best posture to foster a favorable outcome.
Deficiency Actions. In most tax matters, following conclusion of either the audit or administrative appeal, the IRS will issue a deficiency notice and the taxpayer is free to petition the United States Tax Court to challenge the administrative determination of the tax due. The Firm handles deficiency actions directly following the conclusion of an audit or administrative appeal.
Refund Actions. Not all cases fall within the Tax Court’s jurisdiction. There may also be tactical reasons for proceeding with a refund action rather than pursuing a petition to the Tax Court. The Firm pursues these cases in either an appropriate United States District Court or in the United States Court of Federal Claims.
Collection Cases. The Firm represents taxpayers who are the subject of IRS collection activity, including lien and levy matters. These clients have rights and administrative remedies that are governed by the procedural standards of the Internal Revenue Code and related regulations.
Non-Filing. The Firm represents clients who have failed to file tax returns over a number of years. We can help non-filers get into compliance and negotiate payment arrangements.
Voluntary Disclosures. The Firm assists clients in attaining tax compliance by making voluntary disclosures when appropriate to the IRS and/or state and local tax authorities.
Professional Licensure. If tax professionals face licensure issues, Mr. Malone is available to collaborate with the Firm’s Professional Licensure Group, which focuses on everything from revocations and suspension hearings, to professional disciplinary and reciprocity hearings.
State and Local Tax Matters. The Firm represents taxpayers involved in state or local tax disputes. This work involves every phase of a controversy from audit through litigation, including potential voluntary disclosures.
Representative Federal Tax Matters:
Represented a taxpayer with multiple years of unfiled returns; the client was the subject of a $400,000 federal tax lien and on-going collection activity in the form of levies. Result: The taxpayer’s liability was reduced to zero.
Represented a business owner in audit and before the Tax Court. Result: The case settled with a 30% reduction in tax due for one year and the elimination of accuracy-related penalties for all years at issue.
Represented a client with long-standing payroll tax liabilities and unfiled personal returns. Result: The IRS agreed to compromise a substantial portion of the client’s payroll tax liability.
Represented an executor facing complex issues related to the residual beneficiary of the estate, who was a non-resident alien. Result: Analysis of the relevant tax treaty identified substantial tax savings for the beneficiary.
Representative State and Local Tax Matters:
Represented a former company officer in a payroll tax case with approximately $300,000 at issue. Result: Municipality agreed to dismiss the case.
Represented an ad agency and its managing partner subject to a jeopardy assessment for both business and payroll taxes, including over $800,000 assessed against the individual for payroll taxes. Result: Municipality agreed to dismiss the case.
Represented the U.S. affiliate of major multi-national corporation that was the subject of a local mercantile tax assessment of $250,000 with additional exposure for the current and future tax years. Prosecuted a challenge to the assessment under relevant state law and the dormant commerce clause. Result: Settled for $5,000.
Represented a business that had failed to register or pay business privilege taxes for a decade. Result: The municipality agreed to waive the tax claims for half of the period and to abate all of the interest and penalties.
Represented a manufacturing company in an administrative appeal of a penalty assessment for failure to file a timely return. Result: Complete abatement of the penalty.