Our tax attorneys provide legal services in all areas of federal, state and local taxation. The firm’s Tax Group is attuned to the dynamic body of tax law leading to the development of innovative solutions to tax-sensitive transactions. Experience and careful attention to the economics of a given situation enhance the ability of the firm to deliver value-added services to clients in the following specific areas.
Corporate Tax Planning
The Tax Group assists corporations ranging in size from small, closely held companies to Fortune 500 corporations. Our tax attorneys are experienced in planning and implementing mergers and acquisitions, reorganizations, initial public stock offerings, leveraged leases and buyouts, complete and partial liquidations, stock redemptions, divestitures, corporate separations, international financings, debt-to-equity conversions and the issuance of preferred stock exchangeable into common stock or debt. Attorneys have extensive experience with original issue discount and the generation, preservation and use of interest deductions, net operating loss and credit carryovers and other significant tax attributes. Our tax attorneys have represented shareholders, corporations, strategic and financial buyers and sellers, borrowers and lenders. They are experienced in preparing prospectus and proxy statement disclosures regarding the tax consequences of significant transactions, including the issuance of a wide variety of securities. The firm regularly structures buy-sell and stock restriction agreements, common paymaster arrangements, sale-leaseback transactions and deferred compensation programs. Our tax attorneys are well versed in the tax law governing “S” corporations, consolidated returns and intercompany arrangements.
Partnership and Hybrid-Entity Taxation
Eckert Seamans’ tax attorneys are experienced in the formation, operation, division and liquidation of general, limited and “tiered” partnerships, limited liability companies and business trusts. Many of these entities are involved in real estate, oil and gas, timber and other investment undertakings, including low-income housing tax credit programs. Our tax attorneys plan and implement partnership contributions, distributions, dispositions, special allocations, book value and basis adjustments to partnership property and design payout provisions to retiring or deceased partners on a tax-efficient basis. Attorneys assist in structuring credit facilities involving recourse or nonrecourse debt, “bankruptcy remote” entities and other creative financing mechanisms.
Individual Income Tax
The firm provides complete individual income tax consulting services and has experience with structuring investment transactions, planning for the tax consequences of marital settlements and minimizing expenses to the alternative minimum tax. Particular expertise includes structuring nontaxable like-kind exchanges and installment sale transactions. Our tax attorneys provide valuable counsel regarding private and commercial annuities, various insurance products and programs, split-dollar agreements and dealing with involuntary conversions. Attorneys have advised both creditors and debtors of troubled companies and have experience with the consequences of cancellation of indebtedness income and the reduction of tax attributes.
Our attorneys help sustain clients' positions in tax controversies by assisting with compliance and disclosure obligations and representing them in audits, administrative appeals, investigations and litigation. Our tax attorneys have obtained private letter rulings from the Internal Revenue Service and state tax agencies relating to proposed transactions, and the firm frequently renders its opinion on the tax consequences of a variety of transactions and situations. The firm has successfully represented clients before the United States Tax Court, the United States District Courts and the United States Claims Court, as well as various state and local tribunals.
Representative Matters - Federal and State Tax Litigation
- Successful resolution of several U.S. Tax Court cases prior to trial involving individual and corporation income tax assessments;
- Favorable settlement with the U.S. Department of Justice regarding a multiple-year, Internal Revenue Service (“IRS”) judgment and foreclosure action against an individual taxpayer;
- Favorable resolution of estate tax matters at U.S. Tax Court involving valuation of limited partnership interests, deductibility of estate administration expenses, and failure to fund predeceased spouse’s credit shelter trust;
- Co-Counsel on Manella v. Commissioner, 631 F.3d 115 (3d Circ. 2011), resulting in a favorable change to IRS administrative policy regarding innocent spouse treatment;
- Successful resolution of multiple-year, partnership tax shelter litigation at U.S. Tax Court;
- Obtained award of costs and fees in connection with protracted federal tax proceedings;
- Favorable resolution at Pennsylvania Commonwealth Court of alleged termination of S corporation status for corporate net income tax purposes in connection with the sale of a highly-leveraged limited partnership interest;
- Favorable resolution at Pennsylvania Commonwealth Court of foreign franchise tax dispute involving the special apportionment method for holding companies;
- Assisted a team of Eckert Seamans litigators in a case of first impression before the Third Circuit which affirmed the District Court’s favorable decision for preventing the reversion of excess black lung trust assets to settlor company;
- Favorable resolution at Pennsylvania Commonwealth Court of foreign franchise and corporate net income tax controversies in connection with a foreign corporation allegedly doing business in Pennsylvania;
- Favorably settled a Pennsylvania use tax controversy involving owner use of an aircraft at Pennsylvania Commonwealth Court;
- Successful resolution at Pennsylvania Commonwealth Court of sales and use tax assessments in connection with accounting, management and administrative services;
- Settled realty transfer tax litigation with the City of Philadelphia involving real estate holding companies;
- Successful litigation of Pennsylvania inheritance tax assessment resulting in substantial tax savings.
Representative Matters - Federal Tax Controversies
- Successfully negotiated resolutions at IRS Appeals Division involving multiple-year, multi-million dollar corporation and shareholder income tax assessments and listed transaction penalty assessments;
- Favorable settlement of many corporation, partnership and individual income tax disputes at IRS Appeals Division involving various tax issues;
- Successful resolution and settlement of two, multi-million dollar, tax shelter promoter penalty cases;
- Successfully represented several individuals with IRS Offshore Voluntary Disclosure Initiatives and delinquent Foreign Bank and Financial Accounts (“FBAR”) Submissions;
- Favorable resolution of 100% withholding tax penalty cases involving allegedly for responsible persons;
- Favorable settlement on estate tax examination valuation issues involving closely-held corporation stock and fractional interests in real estate, along with related fiduciary income tax issues;
- Successful abatement of significant income and employment tax penalties due to reasonable cause and not willful neglect;
- Settlement of outstanding federal income tax liabilities by negotiating favorable repayment plans;
- Obtained retroactive relief for allegedly defective S corporation elections;
- Favorable settlement of estate tax examination involving valuation of timber properties and mineral interests;
- Successful release of federal tax liens;
- Successful resolution of estate tax valuation controversy involving ownership in professional sports team franchise;
- Favorable settlement at IRS Appeals Division of individual casualty loss claim arising from faulty residential construction.
Representative Matters - State and Local Tax Controversies
- Successful resolution of New York State franchise tax appeal involving Delaware investment holding company;
- Assisted individual clients through Pennsylvania’s Tax Amnesty Program to report and settle past due income tax liabilities;
- Successful in having the Pennsylvania Department of Revenue recognize an allegedly defective S corporation election;
- Reinstated a client’s Pennsylvania sales tax license and obtained a refund of a sales tax penalty that was imposed in connection with the revocation of the sales tax license;
- Favorably resolved a domestic business client’s Hawaii general excise tax multiple year assessments;
- Settled New York State corporation income tax controversy involving multiple year assessments;
- Favorable resolution of West Virginia sales tax controversy involving taxation of Gray Machine amusement revenue;
- Successfully negotiated for two unrelated clients a split settlement of Pennsylvania foreign franchise tax involving extraordinary gains in book income;
- Obtained favorable private letter ruling from the Pennsylvania Department of Revenue regarding the sales taxability of internet sales of custom software;
- Successful elimination of a Pennsylvania sales tax assessment on an out-of-state company allegedly doing business in PA;
- Successfully developed installment payment plans for clients with outstanding state tax liabilities;
- Successfully removed an erroneously filed Pennsylvania corporation tax lien;
- Successful in abatement of Pennsylvania use tax assessment for the purchase of motor vehicles shipped outside of Pennsylvania;
- Successful in substantially reducing Pennsylvania realty transfer tax assessment;
- Assisted client with local business privilege tax controversy involving construction activities;
- Assisted California counsel in a local hotel occupancy tax controversy;
- Settled hotel audit controversy in a case of first impression holding that a hotel registration card is a legally enforceable contract for purposes of hotel occupancy tax with the City of Pittsburgh, PA.
The firm represents various corporate and private foundations, educational institutions, healthcare providers and other nonprofit agencies and organizations in connection with their formation, operation and reporting obligations. Our tax attorneys assist clients in establishing family charitable foundations and trusts for various philanthropic purposes.
State and Local Taxation
The firm’s tax attorneys provide advice and counsel in connection with state and local income taxes, real estate transfer taxes, property taxes, capital stock and franchise taxes, gross receipts or business privilege taxes, and sales and use taxes, which are levied by states and political subdivisions, as well as credits to gross terminal revenue under Pennsylvania’s gaming law. Changes in the state taxation of hybrid entities such as limited liability companies and business trusts are monitored by the Tax Group, often resulting in a recommendation of a plan of reorganization in order to realize future tax savings.
Raymond C. Vogliano
John J. Kearns, III
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