Sullivan & Cromwell’s Tax Group works with clients on all aspects of their tax controversies, from the audit level, to the administrative appeals level, to litigation in court.

The Group seeks to manage and resolve tax disputes for its clients without resorting to costly and time-consuming litigation. S&C believes that it is far better to approach tax controversies with a view toward resolving the matters at the earliest possible stage of the process and at the lowest possible cost to the client, both in terms of any payment to the Internal Revenue Service and the expense of achieving such results. The ultimate goal is to eliminate entirely any proposed adjustment, a result the Firm has often achieved for its clients.

The Firm’s work draws upon two particular strengths:
 
  • The Tax Group consists of lawyers who have extensive knowledge of the tax law as well as the workings of the IRS, including a former chief counsel for the agency.
     
  • The Litigation Group brings its advanced and effective approach to corporate litigation to help the Tax Group lawyers develop the most effective way to resolve their cases.
Clients benefit from a team of knowledgeable tax lawyers and accomplished litigators working in close cooperation—the best of both skill sets and the most effective response to increasingly sophisticated and confrontational IRS challenges.

SELECTED REPRESENTATIONS

Recent tax controversy highlights include representing:
 
  • a non-U.S. multinational company, with respect to a debt/equity issue. The company obtained 100 percent Internal Revenue Service concession of an almost $3 billion proposed assessment of tax penalties and interest at the IRS examination level.
     
  • a non-U.S. multinational company, in a transfer-pricing dispute in which the amount in issue exceeded $450 million in tax and interest. The matter was resolved for less than $12 million at the IRS examination level.
     
  • a U.S. company, with respect to a Section 162(f) fine or penalty issue. The company obtained a no-change result of almost $100 million in tax and interest at the IRS appeals level.
     
  • a non-U.S. bank, in a case in which the IRS argued that a claim for refund was untimely because the statute of limitations had expired. The IRS eventually conceded and paid 100 percent of the refund to the bank, also at the IRS appeals level.
     
  • an individual subject to an IRS global net worth examination. The individual obtained 100 percent IRS concession of the proposed $150 million adjustment at the IRS examination level.
     
  • family members, in an Offer in Compromise submission, which after 4 years of negotiation resulted in probably the largest Offer in Compromise settlement in the history of the IRS .