I.R.S. Representation

The Firm represents taxpayers in I.R.S. examinations from the commencement of the audit process through the level of administrative appeals within the I.R.S.

The Firm works with clients to obtain income tax rulings from the I.R.S., typically addressing discretionary relief granted by the I.R.S. under an income tax treaty.

The Firm practice is consistent with Circular 230 requirements in general and with respect to listed transactions.

Sample Representations

  • We advised a European-based media group, having long-standing licensing subsidiaries based in a specific European jurisdiction, on the application of the income tax treaty between the U.S. and that jurisdiction, notwithstanding initial problems meeting the limitation on benefits (L.O.B.) provision of the applicable treaty. In the course of our dealings with the I.R.S., we were able to demonstrate that the European group was headed by a company with publicly traded stock, that the stock was regularly traded on a recognized exchange, that the licensing subsidiaries were actively engaged in a media-related business, that the royalty payments at issue arose in connection with the use of intangible property within the meaning of the applicable income tax treaty, and that the licensing subsidiaries had sufficient economic substance to meet the standards applied by the I.R.S.

  • We advised a European-based provider of international shipping services within a group business in connection with an I.R.S. audit challenge to the application of the international shipping exclusion under Code §883. Legal arguments within our brief traced the legislative history of the exemption, the development of regulations issued by the I.R.S., and the special purpose of the vessels.

  • We advised a European-based manufacturer and distributor of packaging products on the I.R.S. audit of intercompany service fees charged by the European parent to its U.S. subsidiary. We coordinated the collection of internal documentation and cost detail furnished to the I.R.S. audit team to substantiate the U.S. subsidiary’s deduction for management fees. This entailed analysis of the client’s management structure, reporting relationships, and the global method of computing direct and indirect costs. This allowed us to refute the I.R.S. argument that a portion of the management fees were non-deductible stewardship expenses incurred at the European parent level.

  • In the course of an ongoing I.R.S. examination, we obtained competent authority relief under a treaty for a company resident in a treaty country that did not meet the L.O.B. provision of the applicable income tax treaty. The ultimate beneficial owners were resident in a country that had in effect an income tax treaty with the U.S.

  • We replaced a major international law firm in the course of an I.R.S. examination that challenged the transfer pricing policies of a European-based multinational group having a U.S. subsidiary. Working under tight time constraints, we arranged for the preparation of a replacement transfer pricing report that took into account parent company data not previously presented to the I.R.S. The proposed tax adjustment was reduced by approximately 90%.