McDermott Will & Emery updates

Facebook goes to district court to enforce access to IRS appeals
McDermott Will & Emery
  • Corporate Tax
  • USA
  • December 01 2017

Taxpayers that are not afforded the opportunity to seek review by Internal Revenue Service appeals after a case has been docketed in the Tax Court should seek to elevate the matter up the chain to obtain reconsideration and reversal of such a decision. If that course of action is unsuccessful, taxpayers should consider other options. In this regard, the outcome of Facebook's recent case in the District Court for the Northern District of California may be instructive.

Tax Court says IRS's 'drift-net' argument to expand privilege waiver must be anchored in principles
McDermott Will & Emery
  • Corporate Tax
  • USA
  • November 17 2017

The Tax Court recently rejected an Internal Revenue Service (IRS) attempt to expand on the privilege waiver principles set out in a previous case. The court concluded that the IRS was not entitled to any documents from the period after a notice of deficiency was issued, making clear that subpoenas are not for broad-based 'fishing expeditions'. The case is consistent with the IRS's recent pattern of arguing aggressively against the assertion of privilege and work-product protections in tax audits.

IRS and taxpayers continue to battle over Internal Revenue Code Section 199 deduction for computer software
McDermott Will & Emery
  • Corporate Tax
  • USA
  • November 10 2017

The Internal Revenue Service (IRS) recently published an Office of Chief Counsel IRS memorandum, which deals with a merchant bank's claim that its revenue from merchant discount fees qualifies as domestic product gross receipts under Internal Revenue Code Section 199. The memorandum is further proof that taxpayers and the IRS do not see eye to eye.

Tax Court: prior closing agreement may have relevance in Coca-Cola's transfer pricing case
McDermott Will & Emery
  • Corporate Tax
  • USA
  • November 03 2017

Coca-Cola is seeking a redetermination in the Tax Court of certain Internal Revenue Service (IRS) transfer-pricing adjustments relating to its 2007 to 2009 tax years. The IRS has moved for partial summary judgment seeking a ruling that a 1996 Internal Revenue Code Section 7121 closing agreement executed by the parties is not relevant to the case before the court.

When can a taxpayer dismiss a Tax Court case as moot?
McDermott Will & Emery
  • Corporate Tax
  • USA
  • October 27 2017

Faced with the prospect of potential tax liability after an unsuccessful audit, taxpayers can file a petition in the US Tax Court before paying the liability or pay the liability, make a claim for refund and sue the government for a refund in a local district court or the Court of Federal Claims. For taxpayers that select the Tax Court route, sometimes a question later arises as to whether they can seek to dismiss their case in order to refile in a different forum.

Treasury releases report on reducing tax regulatory burdens
McDermott Will & Emery
  • Corporate Tax
  • USA
  • October 20 2017

The US Department of the Treasury recently submitted a report to the president recommending the withdrawal, revocation or revision of eight Treasury regulations in order to eliminate or otherwise mitigate the "burdens imposed on taxpayers". This action springs from Executive Order 13789, which called on the Treasury to identify and reduce tax regulatory burdens that impose undue financial burdens on US taxpayers or otherwise add undue complexity to federal tax laws.

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