Tax and Tax Controversy
Bowditch & Dewey’s tax professionals serve the firm’s clients as integral members of their transactional and corporate legal teams providing advice on structuring transactions and entity formation in a tax efficient manner that allows our clients to meet their business objectives.
Our clients include banks, insurance companies, professional corporations, real estate holding companies, partnerships, investment companies, and wealthy individuals. With than fifty years of tax practice combined, there are few issues that we have not advised on or litigated.
As a consequence of our non-tax experience in partnership law, corporate law, real estate law, international law, and estate planning, we are often called on to draft the documents necessary to implement the solutions we propose and provide tax and business advice in connection with our clients’ objectives.
Since Federal, state and local taxing authorities continue to aggressively investigate and enforce the revenue laws, Bowditch & Dewey also has substantial trial experience representing businesses and individuals through all stages of civil and criminal tax related controversies at the federal, state, and local level. And all members of our team possess a fundamental appreciation of the tax law including the unique and often arcane procedural rules that can have a profound effect on the outcome of any tax position or dispute.
Experience shows us that most tax controversies can be resolved efficiently and advantageously through early intervention allowing the client to mitigate the costs and risk associated with protracted litigation and potential criminal consequences. Our team is often called upon to consult with our client's other business advisors to identify and resolve minor issues before they blossom into major problems.
With that in mind, we encourage clients to involve our Tax Controversy group at the earliest stages to:
- Identify significant issues
- Develop key audit strategies
- Provide advice in responding to informational and document requests and IRS summonses
- Establish procedures to identify and protect privileged documents
- Establish appropriate document retention procedures in order to preserve evidence
Although our Tax group regularly takes the lead role in complex tax matters at all levels of the state and federal court systems, many of our successes are achieved quickly and privately at the administrative level. Our clients also call upon us to address compliance issues and to provide advice with contemplated transactions in order to minimize potential tax consequences.
Our tax representation has included:
- Foreign bank account reporting (FBAR) requirements
- IRS and State voluntary disclosure programs
- Trustee tax issues
- Employment tax issues
- Civil and criminal tax fraud allegations
- Partnership, LLC, joint venture and other disregarded entities
- Bankruptcy and non-judicial restructurings
- Private letter rulings and other guidance from the IRS
- Cross-border transactions
- The simultaneous sale of a southeastern Massachusetts elder care services corporation to a competitor with the resolution of past due taxes owed to the IRS, Massachusetts Department of Revenue (“DOR”), and Massachusetts Department of Unemployment Assistance (“DUA”). We were able to resolve the crushing debts owed to the tax authorities, the sale of the client’s assets for fair market value, and eliminate any pass through tax liabilities to the client’s shareholders.
- The successful defense of the partners of a multi-tiered commercial real estate development at the Massachusetts Appellate Tax Board (“ATB”) who allegedly failed to report certain cancellation of debt as income to the partnership. We successfully showed DOR counsel why the cancelled debts were not income to certain partners resolving the matter for a nominal sum before incurring the costs of trial preparation.
- In a series of cases docketed in the United States Tax Court as Spanish Village Realty Group, Joseph Irom,TMP v. Commissioner, USTC Docket 27502-07; Prince Manor Apartment Associates, David Kraus, Partner v. Commissioner, USTC Docket 23574-06; and Regency Plaza Associates, Auchter, TMP v. Commissioner, USTC 7150-08 and 7197-08; we successfully challenged notices of deficiency to the partners of these real estate commercial development projects, totaling more than $8 million, and won refunds for those who originally paid the IRS assessments after discovery revealed substantial errors by the IRS in their calculation of income following the bankruptcy proceedings of each of these partnerships.
- Negotiated the wind-down and resolution of a company saddled with crushing tax debts owed to IRS and DUA that resulted from the 2008 recession and organized the formation of a new business allowing the promoters to continue in business.
- Provided advice and counsel to clients, board members of a local bank, in response to a variety of questions including matters such as income tax basis of OREO property acquired, treatment of loan loss reserves, compensation of bank executives, and retirement plans, to name a few.