Tax Law

Stein Sperling’s tax law attorneys provide federal and state tax-planning services for businesses and individuals. In every matter, we get to know our clients and their strategic objectives to offer advice that is tailored to their needs. Our goal is to protect our clients’ assets by taking full advantage of deductions, credits and losses that reduce their tax burden. We assist them in constructing comprehensive tax plans that comply with federal and state laws.

We help business owners as they choose and occasionally alter appropriate entity types for their businesses and structure and document the organization of their businesses. This process involves a multitude of tax considerations that may affect the short- and long-term success of a business. Our attorneys regularly assist owners as they address critical issues associated with forming, restructuring, transferring interests in, merging, converting and dissolving their businesses. We guide them through tax deferral and recapture planning, redemption transactions and, when necessary, the tax components of bankruptcy and insolvency processes. In addition, we assist larger businesses in complying with the mandatory tax provisions of the Patient Protection and Affordable Care Act and smaller businesses in understanding the tax credits available to them for expanding insurance coverage.

Our attorneys often work with clients’ accountants, money managers and insurance professionals, as well as our own Estates and Trusts department, to minimize income and estate tax liability.

To learn more about our Estates and Trusts services, click here.

Stein Sperling provides tax law counsel for complex commercial transactions, including acquisitions and sales of business entities, consolidations, divisions, and transfers of stock and other assets. We guide clients as they negotiate and prepare transaction documents, such as purchase and sale agreements, financing documents and asset management agreements, helping them anticipate tax consequences for each decision they make related to the transaction. Our experience in these situations allows us to evaluate the potential for challenges from the Internal Revenue Service based on law or current interpretation.

Our experience in structuring transactions has taught us that working closely with our clients’ teams of brokers, investors and accountants allows us to collaborate to resolve issues quickly and efficiently. We can obtain letter rulings from the IRS or issue opinion letters related to an upcoming transaction. Each of these measures helps to ensure the deal will close on time and with our clients’ goals in mind.

Stein Sperling’s tax law attorneys help businesses manage the tax components of employee benefit plans and executive compensation packages. We are well versed in the tax and business issues associated with incentive stock options, nonqualified options, restricted stock, “phantom equity” and stock appreciation rights. As businesses prepare for structural changes, such as mergers and acquisitions, we help owners anticipate and evaluate what impact these changes may have on benefit plans. Our attorneys also advise clients on the issuance of stock, partnership interests and limited liability company interests to reduce their businesses’ tax exposure.

Our tax law attorneys work closely with our Employment Law department throughout the planning and implementation phases of compensation and benefits plans. Together, we help businesses ensure their plans comply with state and federal employment laws, as well as the complex Section 409A regulations governing deferred compensation.

To learn more about our Employment Law services, click here.

Stein Sperling’s tax law department assists clients as they evaluate, establish or terminate individual or business domicile in various jurisdictions in order to minimize their exposure to state and local taxes. Multistate entities require particular attention as the structure and operation of those businesses can affect their tax obligations. Accordingly, we get to know our clients and their businesses, educating ourselves on the business’s operations and state tax posture. We also assess the viability of the entity’s tax planning strategies. Each of these steps allows us to evaluate multistate coordination needs, especially with regard to audits and controversies.

We also help businesses to navigate and resolve tax controversies as they arise. Whenever possible, we work to settle these disputes discreetly and outside of court. However, we are always prepared to represent our clients in administrative proceedings and in federal and state courts.

Stein Sperling’s tax law attorneys remain at the forefront of developments in international tax enforcement, especially as they relate to Foreign Bank Account Reporting (FBAR).

The IRS is fighting offshore tax avoidance through demands for greater international financial transparency. It continues to step up efforts to indentify assets that U.S. business and individual taxpayers may be concealing overseas. With certain exceptions, each U.S. citizen or resident with signature authority over one or more foreign bank accounts has an annual obligation to file a Foreign Bank Account Report (FBAR) by June 30. Unfortunately, many taxpayers are unaware of this requirement and as a result face staggering financial losses for failing to file an FBAR and/or failing to report foreign income, including back taxes, penalties and interest, as well as possible criminal exposure.

Our attorneys have substantial experience in tax matters related to offshore assets. We are well versed in FBAR requirements and related voluntary disclosures that allow taxpayers to avoid criminal sanction in most cases and face reduced but still significant penalties. We assist clients in addressing previously neglected FBAR obligations and negotiating penalties.

Stein Sperling represents clients in controversies with the Internal Revenue Service (IRS) and state authorities. We understand that interactions with these agencies are often intimidating and overwhelming as the IRS has broader powers than other creditors to lien and levy. We handle audits and appeals, shifting most or all of the burden of interacting with the IRS from our clients to us. We are well versed in the issues of current focus by the IRS, including employee versus independent contractor, tracing of loan proceeds as affecting the interest deduction, special rules for real estate professionals, proposed personal liability for unpaid business trust taxes and more.

We work side-by-side with clients to develop their positions on audit and appeal.  Our attorneys have a depth of experience advising individuals and businesses facing federal or state income, sales tax and other examinations or appeals hearings. This allows us to aggressively defend clients’ positions throughout the process. Our goal is to achieve the best possible resolutions for our clients and to reduce or eliminate penalties for non-willful errors.

Stein Sperling understands that good people can find themselves in debt to the IRS or the state. When that occurs, mistakes and misunderstandings can lead to liens and levies against business or individual assets. Accordingly, we help clients implement strategies to address issues they encounter while responding to aggressive collection tactics used by the IRS or state tax authorities.

Where the collection process has commenced but a client believes that the assessment is improper, avenues of abatement may remain through audit reconsideration, use of the Collection Due Process (CDP) hearing or by obtaining assistance from the Taxpayer Advocate.

Where the tax liability is correct, allowing a taxpayer to pay over time is generally obtainable. This prevents the IRS or state authority from enforcing collection action for as long as the taxpayer is current. When our attorneys pursue this strategy for clients, we negotiate the agreement’s provisions to align with our client’s current and future ability to pay.

An offer in compromise is an agreement between a taxpayer and the IRS or state authority that results in the government accepting less than the full amount owed assuming certain conditions are met by the taxpayer. Submitting an offer in compromise can be a complicated process, and its viability as a solution depends greatly on the taxpayer’s financial circumstances. Our tax law attorneys regularly assist clients with this form of tax resolution including required financial disclosures.

Innocent spouse claims can absolve our client of any tax liabilities associated with a former spouse or, in some instances, current spouse. In contrast to popular belief, bankruptcy may be available to discharge older federal and state nontrust tax liabilities. As we assist clients in the tax collection process, our attorneys consider every angle of possible resolution.

Our attorneys are also experienced in pursuing penalty abatements, a mechanism in which a portion of the tax penalties (and occasionally interest) are removed from the balance owed by our client. Often, the justification for this form of tax resolution relates to a “reasonable cause” standard based on the client’s circumstances at the time the tax penalty was first assessed.

Stein Sperling regularly assists individual and business clients whose tax disputes cannot be resolved administratively. We represent them in Tax Court, Federal District Court, Court of Claims or Bankruptcy Court for ultimate resolution of the tax dispute. While the vast majority of civil matters are resolved during the examination or appeals process, ongoing factual and/or legal disputes, or inflexible administrative responses, will occasionally force a tax matter to litigation. Our tax law attorneys have tried case in each of these forums and vigorously represent clients whose settlement efforts have failed.

Working closely with the firm’s criminal law department, our tax attorneys are able to assist businesses and individuals who may face or are encountering a criminal investigation related to taxes. In criminal tax matters, our tax law team works side-by-side with our Criminal Law department, as these matters require the combined talents and experiences of both practice areas. We work in such cases to question the factual basis for potential prosecution, to cast doubt on the legal sufficiency of a prospective action and/or or to encourage civil resolution as more appropriate.

To learn more about our Criminal Law services, click here.