Jenner & Block

Tax Controversy

Federal Tax Controversy Matters

  • Representation of Fortune 100 company in Tax Court litigation involving several issues including whether the company could properly claim tax credits for certain research and engineering expenses and whether the company’s multi-year contracts with the government could be properly accounted for under the completed contract method of accounting.
     
  • Representation of a large publicly traded corporation in a $103 million tax refund lawsuit in the United States Court of Federal Claims.  The litigation challenged the validity of the Treasury Department’s loss disallowance regulations, and involved the standard under which long term contracts will be deemed completed using the completed contract method of accounting.  Finally the lawsuit challenged the IRS’ refusal to allow the taxpayer to account for certain procurement contracts under its normal method of accounting, as opposed to the percentage completion method of accounting as if the procurement contracts were qualified long term contracts.
     
  • Representation of a publicly traded company in its appeal to the United States Court of Appeals for the Seventh Circuit challenging the IRS’ determination that the company had too quickly depreciated certain leasehold improvements.
     
  • Representation of a publicly traded company before the United States Court of Claims and the United States Court of Appeal for the Federal Circuit with respect to application of the appeal filing deadlines of the Federal Rules of Civil Procedure and the rules’ effect on the finality of the taxpayer’s lower court tax victory. 
     
  • Representation of a publicly traded company before the United States Court of Federal Claims with respect to the IRS rules for determining the timing of an overpayment and underpayment and the accrual of interest.
     
  • Representation of a Fortune 100 company before the IRS appeals office with respect to valuation and amortization of intangible property included in a deemed asset acquisition of another large publicly traded company.
     
  • Representation of a publicly traded company before the IRS with respect to the tax treatment of contract rights distributed in an acquisition, with amounts at stake greater than the company's annual before-tax income.
     
  • Representation of a large partnership before the IRS with respect to valuation and allocation of income on the sale of contributed assets.
     
  • Representation of a privately held company before the Tax Court and Seventh Circuit Court of Appeal challenging the IRS’ application of the accumulated earnings tax.
     
  • Representation of an individual taxpayer in Tax Court litigation regarding the deductibility of contributions to the taxpayer’s private foundation. 
     
  • Representation of a Fortune 500 company before the IRS appeals office with respect to the allowability of losses from a corporate restructure which the IRS challenged as an improper tax shelter.
     
  • Representation of a large publicly traded company before the IRS in connection with foreign sales corporation accounting issues. 
     
  • Representation of corporations, pass-through entities and other business organizations with respect to personal holding company determinations, debt v. equity issues including dividend characterization, qualification for tax free treatment under IRC sections 351, 355, and 368, partnership audits, financial structures treated as tax shelters and employee characterization issues. 
     
  • In connection with our White Collar Criminal Defense group, representation of individual and corporate clients in criminal tax defense actions.

State and Local Tax Controversy Matters

  • Defense of several publicly traded sporting goods retailers against an action under the Illinois Whistle Blowers Act seeking the collection of Illinois sales/use tax on Internet sales.
     
  • Representation of a publicly traded company in refund litigation related to characterization of income from the sales of certain assets as non-business income.
     
  • Representation of a publicly traded company in negotiations related to determinations that portions of its business should have been treated as part of a unitary group.
     
  • Prosecution of refund claims before the California State Board of Equalization for sales and use tax paid by a government contractor on overhead material purchased for use in connection with its government contracts which was resold to the government before such use.  The California State Board of Equalization had denied the refund claims taking a narrow view of the applicability of Aerospace v. SBE; 218 Cal. App 3d 1300; 267 Cal. Rptr. 685 (1990).
     
  • Representation of a publicly traded company in adjudicating several million dollar real property tax dispute before the U.S. Bankruptcy Court.
     
  • Representation of government contractors in state administrative and judicial proceedings to establish the resale exemption from sales and use tax for the purchase of overhead materials to be used in connection with the performance of a government contract, but resold to the government before such use.
     
  • Representation of a publicly traded company regarding allegedly underpaid tax for a period of more than seven years.
     
  • Representation in an Illinois Protest Monies Act suit, refund claim and federal declaratory relief action against the Illinois Department of Revenue concerning the liability of a federally exempt entity for state excise taxes. 
     
  • Representation of a publicly traded company before the Illinois Department of Revenue regarding the Department’s determination that a group of related corporations were part of a unitary group. 
     
  • Representation of limited partners against a tax collection action initiated by the California State Board of Equalization for sales and use taxes imposed on the partnership.  After defending against the collection action, sued the State of California for attorneys’ fees for the state’s unreasonable actions in initiating and maintaining the collection action. 
     
  • Sued the States of Tennessee and Arkansas on behalf of privately held companies for attorney fees incurred in defending against each state’s attempt to impose sales tax collection responsibilities on out-of-state taxpayers, an action determined to be unconstitutional in the Supreme Court’s decision in Quill v. North Dakota
     
  • Representation of a private company in its commerce clause challenge to the State of New York’s imposition of state use tax.
     
  • Representation of a private company in its foreign commerce clause challenge
    to the State of Illinois’ imposition of sales tax on imported goods. 

     
  • Representation of several not-for-profit entities in their actions for administrative review in the Circuit Court of Cook County challenging the Illinois’ Department of Revenue’s denial of their request for state tax exemption. 
     
  • Representation of a privately held company against the California State Board of Equalization’s position that ATM service charges are included in taxable gross receipts causing the state to amend its regulations to provide that such charges are considered non-taxable finance charges.
     
  • Representation of professional service corporations before the California Franchise Tax Board concerning the constitutionality of imposing the state’s minimum franchise tax on such corporations who are members of a partnership doing business in the state, but who are not themselves doing business in the state or even authorized to do business in the state.
     
  • Representation of various business enterprises in California with respect to independent contractor characterization actions. 
     
  • Representation of corporations and individual taxpayers before the Illinois Department of Revenue in state tax collection actions, including representation before the Illinois Department of Revenue Board of Appeals, in offer in compromise actions and voluntary disclosure petitions. 
     
  • Representation of a banking institution before the Wisconsin Department of Revenue and the Wisconsin Tax Appeals Commission.  
     
  • Representation of individuals and business entities in number of states to successfully negotiate voluntary disclosure agreements for income, sales/use and unclaimed property issues.
     
  • Representation of a large publicly traded multinational company in a putative class action involving allegations that the company assessed and billed certain state and local excise taxes in violation of federal law.