Tax Disputes

Many of the most significant representations for Kirkland’s tax disputes lawyers take place in confidential proceedings before the IRS. We recognize the enhanced value often inherent in a quiet victory and, as such, many of our biggest wins are not public.

Our lawyers work to achieve a favorable resolution at the earliest possible administrative stage, whether that be through a private letter ruling, a “walk-in” request for a closing agreement, at the examination level, before the IRS Independent Office of Appeals or with the IRS Office of Chief Counsel.

Our work often begins at the planning stage — advising on transactions to effectively anticipate potential future controversies. We regularly assist clients in navigating uncertain tax positions, including by obtaining private letter rulings or other advance guidance from the IRS. Our lawyers advise clients in a variety of pre-controversy contexts such as IRS reporting requirements, disclosures on Schedule UTP and Form 8275, financial disclosure issues, privilege concerns and document retention matters. This front-end planning often is pivotal to achieving a favorable resolution if a controversy does arise.

We are skilled at helping clients navigate the IRS examination process, including the LB&I compliance campaigns, the specialized TEFRA and BBA partnership audit procedures and the Global High Wealth initiative. While we strive to resolve issues with the assigned IRS Examination team, we also work closely with our clients to ensure that issues are properly developed as necessary for effective presentation before the Office of Appeals or in litigation.

Kirkland lawyers have successfully resolved numerous matters before IRS Appeals involving tens of billions of dollars of asserted deficiencies. This includes a recent landmark global settlement on behalf of an investment management partnership with LB&I, Appeals, and IRS Counsel in a decade-long dispute over the character of billions of dollars of investment gains. We are experienced in traditional representations before IRS Appeals following completion of an examination, as well as non-traditional procedural options such as Fast Track Settlement, Early Referral, the Rapid Appeals Process and Post-Appeals Mediation.

Kirkland lawyers have helped clients reach successful outcomes in significant civil tax disputes in the United States Tax Court, the Court of Federal Claims, the federal district courts, bankruptcy courts, state trial courts, the federal courts of appeals and the Supreme Court.

For example, Kirkland lawyers recently obtained a landmark appellate ruling invalidating a Treasury Regulation as arbitrary and capricious under the Administrative Procedure Act because the Department of Treasury did not respond to significant comments received from the public before the regulation was promulgated. See Hewitt v. Commissioner, 21 F.4th 1336 (11th Cir. 2021).

Kirkland lawyers also obtained a Tax Court trial victory (affirmed on appeal) holding that a partnership formed to operate a business that would claim tax credits offered by Congress to promote clean energy was a bona fide partnership with bona fide partners. See Cross Refined Coal, LLC v. Commissioner, Tax Court Docket No. 19502-17, Index No. 178 (2019), aff’d, 45 F.4th 150 (D.C. Cir. 2022).

We find that focusing on trial readiness from the outset often leads to favorable settlement outcomes. In recent years, Kirkland’s tax disputes lawyers have reached favorable litigation settlements on a broad range of tax issues, including transfer pricing, claims regarding economic substance and the step-transaction doctrine, partnership tax disputes, valuation of business interests and other assets, tax accounting issues (including changes in accounting method), withholding taxes under international tax treaties, charitable contribution deductions and interest netting.

Kirkland’s tax disputes lawyers are uniquely positioned to counsel and defend clients on criminal tax matters and in government and internal investigations involving tax issues. We also are skilled in crisis management, preparedness, mitigation and response in the context of both government and internal investigations.

We represent clients in criminal tax investigations conducted by the IRS, the DOJ Tax Division, local United States Attorneys’ Offices or state prosecutors and in cross-border investigations involving both U.S. and foreign law enforcement agencies. We also have experience ensuring that sensitive “eggshell” civil tax representations (including promoter audits and assertions of the civil fraud penalty) do not develop into criminal investigations.

Kirkland’s tax disputes lawyers have extensive experience representing and defending corporations, partnerships, individuals (and their professional advisors) and exempt organizations with respect to criminal tax enforcement regarding failures to report income, offshore banking issues, claimed deductions for charitable contributions and attempts to breach the attorney-client privilege with crime-fraud allegations (and subsequent interactions with government taint teams).

Kirkland’s strong cross-disciplinary teams — consisting of tax disputes, white collar, and government regulatory & internal investigations lawyers — are well positioned to advise with respect to multi-faceted tax disputes, including where attempts at resolution are complicated by congressional investigations or claims from putative whistleblowers.

Kirkland’s tax disputes lawyers have represented prominent families in some of the largest-ever estate, gift and GST tax audits and litigation in United States history. Our representations include multiple litigated cases with asserted deficiencies of hundreds of millions, and even billions, of dollars. Our cases have included IRS challenges to the validity of estate planning documents, economic substance and other common-law challenges to estate planning techniques, valuations of business interests, art and real estate and valuation discounts (including for family limited partnerships).

Working closely with Kirkland’s trusts and estates lawyers, we assist with the preparation of estate, gift and GST tax returns to prepare for potential audit. We are sensitive to the complex family and closely-held business dynamics (and satellite state court litigation) that can arise in the transfer tax context — and their effect on federal tax litigation. We also work in multi-disciplinary teams to address the liquidity and tax planning that may sometimes be necessary to ensure timely payment of tax due.

Kirkland’s tax disputes lawyers have extensive experience representing multinational clients in complex transfer pricing matters, including in IRS examinations and in Mutual Agreement Procedures (MAP) under multiple tax treaties. Our MAP experience includes transfer pricing cases with a number of different countries, including Canada, the United Kingdom, India, Mexico, Germany, the Republic of Korea, Norway and Australia. We also have experience representing clients in obtaining Advance Pricing Agreements.

We are skilled at navigating the complex and evolving relationships with treaty partners and work collaboratively with the relevant taxing authorities in order to reach a successful resolution.