Practice Areas & Industries: Baker & Hostetler LLP

Practice/Industry Group Overview

Our Tax Controversy Team has experience in all major areas of tax controversy, successfully representing clients before the IRS Appeals Office, in alternative dispute resolution, in IRS National Office matters, before the U.S. Competent Authority, and in IRS examination. We have won precedent-setting victories in the U.S. Tax Court, U.S. Court of Federal Claims, U.S. District Courts, U.S. Courts of Appeals, the U.S. Supreme Court, and state and local trial and appellate courts.

Tax controversies require experienced tax lawyers with litigation skills. Our Tax Controversy Team is led by senior lawyers with fundamental appreciation of the tax law and its shaping policy considerations, seasoned trial litigators, and skilled appellate advocates with a record of creativity and achievement. Our lawyers have extensive practical experience, working relationships with the IRS and Department of Justice, and prior service in government and industry.

Our Tax Controversy Team analyzes problems to their core at the onset of a tax controversy and uses that analysis to guide responses to IRS activities and positions. We advise our clients concerning cost-effective potential solutions while anticipating and preparing for litigation. Our clients work directly with senior tax lawyers who are able to direct use of client and Firm resources effectively with victory in mind. Our approach to the resolution of tax controversies is forged from experience and proven to be effective.

We combine a readiness to litigate with the skill to work out a negotiated settlement with taxing authorities.

Recognition

• Team members have served as senior federal tax advisers to the Assistant Secretary-Tax Policy and the Office of Tax Legislative Counsel at the U.S. Treasury, and in the Office of Chief Counsel of the IRS Legislation and Regulation Division
• Eight of our tax team members have been selected for The Best Lawyers in America
• Our team also includes the past chair of the ABA Tax Section Committee on S Corporations, a past vice-chair of the Corporate Tax Committee, and fellows in the American College of Tax Counsel

Tax Controversy Experience

Our Tax Controversy Team has won precedent-setting victories in federal and state tax litigation. We take advantage of the opportunities created by this track record of successful litigation to resolve cases short of trial when possible. Following are selected decisions and settlements. The taxpayer is identified only where a matter of public record.

• Public Company, 2005, IRS Appeals settlement 80% for taxpayer allowing over $25 million deduction for donation of easements to charity
• Sports Franchise, 2004, successful IRS Appeals mediation settlement on amortization of player contracts and other intangible assets
• Tauber v. Commissioner, Tax Court 2004, settlement of tax treatment of $150 million in foreign currency trades resulting in full benefit to taxpayer
• IRS Industry Director's Directive, 2004, obtained favorable settlement guidelines for amortization of player contracts and other intangibles on behalf of professional sports league
• Public Company, 2004, settlement of deductions for insurance reserves; multimillion-dollar deficiency asserted, defended to result in $80 million refund
• Public Company, 2004, IRS Appeals settlement allowing treatment of anti-dumping award as tax-free non-shareholder contribution to capital
• Unnamed Estate, 2004, favorable IRS Appeals settlement on valuation of a billion-dollar interest in a publicly traded company

State Tax Cases

• Ohio Supreme Court 2004, precedent-setting victory in test case finding refrigeration equipment on trucks to be part of the trucks and not subject to personal property tax
• Ohio Supreme Court 2002, established for the first time that sales and use tax exemption applied to computer system used to provide services to affiliates
• Ohio Supreme Court 1999, expanded the scope of the exemption from sales and use tax for packaging systems used in a distribution operation

Current Tax Controversies

Our Tax Controversy Team often has cases pending at all stages in the tax controversy process, IRS examination, IRS Appeals, Tax Court, Court of Federal Claims, U.S. District Court, Courts of Appeal, and in various state trial or appellate courts. Following are some examples of our currently active tax controversy matters.

• Advice to "promoter" of numerous listed transactions regarding responses to IRS actions with respect to those transactions
• Representation of taxpayers subject to "promoter" audit under Section 6700, including coordination of responses to challenges of deductions claimed by many investors
• Joint defense representation including one of the largest cases in connection with tiered partnerships and straddle transactions, so-called "POPS" transactions, described in IRS Notice 2002-50
• Representation of taxpayer in IRS project involving charitable remainder trust distributions under Treasury Regulations §1.643(a)-8, described in IRS Notice 2000-15
• Representation of a number of taxpayers in connection with the tax treatment of acquisitions of partnerships that had invested in high-basis "distressed debt"
• Representation of foreign corporate taxpayer in connection with whether it is engaged in U.S. trade or business through a permanent establishment
• Advice to corporate taxpayer in connection with Sale-In, Lease-Out (SILO) transactions
• Advice to corporate taxpayers in connection with bank owned life insurance (BOLI) transactions
• Representation of taxpayers in connection with deductions claimed for donations of charitable easements
• Representation of $500 million estate in connection with valuation of Limited Liability Companies holding more than 20 real estate properties and related issues
• Representation of group of U.S. corporate taxpayers in connection with the taxation of receipt of anti-dumping duties imposed on foreign corporations
• Representation of group of corporate taxpayers seeking refunds of telecommunications excise taxes
• Representation of ESOP fiduciaries in U.S. District Court and before the Department of Labor concerning allegations that transactions were prohibited transactions
• Representation of tax qualified retirement plan sponsors before the IRS seeking remediation of disqualifying plan defects
• Representation in the U.S. Supreme Court regarding standing of ERISA plan fiduciaries to bring claims for reimbursement
• Representation of multiple taxpayers in Ohio Supreme Court regarding whether software is intangible personal property subject to tax

About Our Tax Team

With a team of more than 80 lawyers -- many of whom have served as senior government tax advisors and have received substantial leadership recognition within the legal profession -- Baker Hostetler's national tax practice offers unsurpassed resources to our clients. We can handle any tax planning matter or tax controversy at the state, federal or international level, and have the insight and experience to make the Tax Code work to our clients' advantage.

About Baker Hostetler

Baker Hostetler lawyers help clients establish, maintain and protect market-leading positions across the United States and around the world. We offer clients the strength of 600+ lawyers in a full range of practices, a unique geographic platform including both the coasts and the center of the country, a deep knowledge of industry issues and a 90-year track record of excellence and achievement.

For more information about our Tax Controversy and Litigation practice:

National Contact

David J. Fischer
202.861.1712
dfischer@bakerlaw.com

Cincinnati

William Appleton
513.929.3403
wappleton@bakerlaw.com

Cleveland

Christopher J. Swift
216.861.7461
cswift@bakerlaw.com

Columbus

Edward J. Bernert
614.462.2687
ebernert@bakerlaw.com

Costa Mesa

George Mooradian
714.966.8800
gmooradian@bakerlaw.com

Denver

Raymond L. Sutton, Jr.
303.764.4103
rsutton@bakerlaw.com

Houston

Lisa Pennington
713.646.1303
lpennington@bakerlaw.com

Los Angeles

Neil Carrey
310.442.8835
ncarrey@bakerlaw.com

New York

Elizabeth A. Smith
212.589.4277
esmith@bakerlaw.com

Orlando

G. Thomas Ball
407.649.4004
tball@bakerlaw.com

Washington, DC

David J. Fischer
202.861.1712
dfischer@bakerlaw.com