Virtually no business or investment activity is free from federal and state tax considerations and pitfalls. Schiff Hardin tax attorneys advise clients on the tax aspects of the formation, financing, operation and termination of their business activities, and in the structuring of their investments.
Helping Clients Achieve Optimal Tax Results
Working closely with the firm’s corporate attorneys, we counsel clients on the structuring of sophisticated business transactions involving mergers, acquisitions, reorganizations, joint ventures and divestitures in order to achieve optimal income tax results. Tax considerations also must be taken into account in connection with debt restructuring and financing transactions, such as leveraged leases and sale-leasebacks.
In an increasingly interconnected global economy, clients turn to us for advice on a range of foreign, cross-border and in-bound tax planning opportunities and solutions.
Clients also benefit from our significant focus and strength in dealing with tax controversies and tax litigation.
We enjoy working with local counsel and accountants throughout the United States in connection with tax-sensitive transactions or controversies with which they may not have had significant prior experience.
Resolving Tax Controversies
Schiff Hardin tax lawyers have handled federal, state and local controversies involving income tax, gift and estate taxes, and various other state and local taxes, including sales and use tax and franchise tax matters.
We assist taxpayers, their accountants and local counsel at all stages of tax controversies from initial audit and administrative appeal through contested court proceedings, if necessary. We have an excellent track record of avoiding litigation to resolve tax controversies administratively and favorably to taxpayers.
Our experience includes:
- Challenges to family limited partnerships and LLCs
- A diverse array of tax accounting issues raised in connection with business acquisitions and operations
- Penalty relief or mitigation
- Various sales and use tax matters including those involving e-commerce and economic nexus
- Challenges to sophisticated capital formation structures such as the use of leveraged preferred stock
- Challenges to straddle and other trading strategies
We also have represented a number of individuals and entities at the audit level and beyond in connection with so-called “tax sheltered investments.” Working with attorneys in the firm’s White Collar Defense and Government Investigations group, we also represent clients in connection with tax fraud investigations and litigation.
We regularly represent taxpayers involved in tax collection and related matters. We have counseled corporate officers regarding the attempted imposition of the “100% penalty” for the payment of delinquent payroll taxes. We also have represented “innocent spouses” in connection with divorce-related tax matters and attempts by the IRS to collect taxes owed by their former spouses. We help taxpayers who have fallen behind in their tax filing responsibilities qualify for voluntary disclosure and tax amnesty programs.
Several of our partners are CPAs, whose training provides us with invaluable insights into our clients’ complex tax and business issues. We regularly advise accountants in connection with privilege issues and audit defense strategies.
A Winning Approach to Tax Litigation
Schiff Hardin attorneys have handled all manner of contested tax matters, including litigation in the United States Tax Court, the Court of Federal Claims and U.S. district courts, state courts and administrative tribunals, including:
- IRS deficiencies resulting from complex business transactions and tax accounting matters
- Estate and gift tax matters involving family partnerships and family LLCs, other substantive transfer tax issues and valuation issues
- Disputes involving tax shelters and hybrid accounting issues
- Contested penalties
- State tax disputes involving structured products
We regularly help accountants and local counsel who lack tax controversy experience develop tax litigation strategies in connection with tax disputes involving their clients.
Along with members of our White Collar Defense and Criminal Investigations group, we have represented taxpayers facing tax fraud investigations and have defended them against tax fraud criminal charges.
Reducing State and Local Tax Burdens
Schiff Hardin’s Tax Group focuses on reducing state and local tax expenses for businesses.
Mitigation of state and local tax issues is an increasingly important consideration in connection with business dispositions and acquisitions. Unaddressed latent liabilities can postpone or derail a significant business acquisition or disposition.
Our goal is to ensure that business clients have the most tax-efficient business structure, and that they are taking advantage of all available tax and business incentives to increase their companies’ profitability.
Our success in identifying areas of tax inefficiency and opportunities for tax savings has resulted in significant state and local tax savings for companies in industries such as transportation, healthcare, hospitality, manufacturing, distribution/logistics and software development.
We frequently perform diagnostic “audits” of an organization’s structure, business operations and state tax returns to:
- Identify opportunities for reducing ongoing tax liabilities
- Increase eligibility for tax refunds and credits
- Ensure that latent liabilities are properly addressed
After we complete a detailed review of the business structure and financial information for a client, we present our preliminary findings. We then offer advice on available and appropriate tax savings strategies that could help their companies achieve overall performance and growth goals.
New developments, such as the “Amazon tax” first instituted by the State of New York and since adopted by several other states, pose special challenges for “remote sellers.” We advise clients concerning these and other special sales and use tax issues facing sellers of products through the Internet.
A World of International Tax Advice
Our international tax practice is very extensive. We counsel foreign individuals and corporations on the U.S. tax consequences of their investments in U.S. corporations and real estate. Conversely, we represent U.S. individuals and corporations in connection with the domestic tax consequences of their involvement in foreign operations. Planning for many clients involves multi-jurisdictional issues and worldwide investments.
We have represented offshore investment funds and companies on tax matters relating to their U.S. trading activities. A significant portion of our international tax practice involves tax planning in areas, such as:
- Subpart F
- Foreign tax credits
- Use of tax treaties
- Debt-equity concerns
Meeting the Needs of Tax-Exempt Organizations
Schiff Hardin’s intense commitment to serving the legal needs of tax-exempt organizations is matched by our significant experience and practice capabilities in this area.
Working with our Private Clients, Trusts and Estates group and other firm practice areas, our Tax group provides comprehensive counsel to a wide array of public and private philanthropic, health care, medical and scientific research, housing, neighborhood redevelopment, cultural, artistic, civic, college and educational, and religious organizations, as well as social welfare organizations, trade associations and business leagues, business and housing cooperatives, and professional fundraisers. We have considerable experience in addressing income and excise tax rules, donation agreements, endowments, charitable trusts and other fund raising activities, including state regulation of such activities.
Specific Services to Tax-Exempt Organizations
Schiff Hardin provides practical and cost-effective advice in virtually every aspect of a tax-exempt organization’s activities. Our attorneys thoughtfully consider each organization’s unique needs and concerns to offer a wide range of specific and highly complex services.
We are regularly engaged to provide services that run the gamut from carefully crafting the structure of an organization at the time of formation to managing ongoing operations. Specifically tailored to meet each organization’s particular needs by emphasizing both the practical limitations as well the more technical issues such as federal and state taxation, regulatory compliance, tax disputes and litigation tax-exempt organizations face.
Business Formation, Organization and Achievement of Tax-exempt Status
Our team is experienced in all aspects of business start-up. We understand that decisions made during the formation process directly affect an organization’s future success. Accordingly, we advise clients on structuring issues, including the choice of entity structure and filing for tax-exempt status.
We also work with our clients to ensure full compliance with both state and federal laws, while counseling with respect to governance structures and best practices, including the application of Sarbanes-Oxley to the tax-exempt sector.
We regularly assist our clients with annual tax filings, public disclosure requirements, accounting issues, as well as various required employment and state corporate filings. Our attorneys monitor changes in activities to ensure our clients’ continuing qualification for exemption and maintenance of public charity status. This includes such activities as lobbying, providing services, proposed transactions and foreign expenditures. We also counsel clients on the registration of charitable solicitations, as well as on federal and state disclosures.
Real Estate Transactions
Our team is sensitive to the unique challenges our tax-exempt clients face with respect to real estate issues. We have significant experience in guiding organizations through matters arising from commercial and residential development (including long-term ground leases), the rental and sale of properties, debt financing, and private foundation ownership of real estate.
Governance and Operations
Our team regularly advises tax-exempt clients with respect to board composition and selection; director, officer and executive compensation; and board oversight of organizational activities, as well as on board self-evaluations and fiduciary duties.
Clients turn to us for cogent counsel on day-to-day operations, including fiscal agent agreements, publicity releases, licensing, employment/independent contractors, contracts, investment policy statements, conflict of interest policies, affiliation agreements, administration, and member relations.
Private Foundation Rules
Experienced in counseling clients on matters involving special rules for private foundations, we regularly advise clients on issues concerning self-dealing, compensation and reimbursement, minimum distribution requirements, excess business holdings, jeopardizing investments, and taxable expenditures.
The ability to raise adequate funds is crucial to the success of a tax-exempt organization. Our team works with boards of directors and management to guide and direct fund-raising efforts, including:
- Unrelated business income tax (UBIT)
- Charitable games (raffle, bingo, etc.)
- State registration for solicitation
- Professional fundraisers and fund-raising counsel
- Acknowledgment of gifts
- Public charity status
- Grant applications
- Corporate sponsorships
- Special events
- Affinity cards
- Planned giving and major gift programs
- Enforcing charitable pledges
Our clients include professional fundraisers and professional fund-raising consultants, who call on us with respect to state registration requirements, preparation of contracts, bonding and other compliance and filing requirements.
Our attorneys frequently assist organizations with donor contributions, including charitable remainder and lead trusts. We have advised on charitable gift annuities and pooled income funds, with respect to state and federal law compliance, and donor-advised funds. We have also worked with clients to review and develop gift acceptance policies.
We routinely advise donors with respect to charitable contributions, including donations of appreciated property, non-marketable assets, real estate interests (including environmental issues), and large gifts; donations to donor-advised funds, and split-interest trusts (including charitable remainder and charitable lead trusts); making of pledges; charitable gift annuities; and bequests and other deferred-giving techniques. We also have extensive experience with early termination of charitable remainder trusts.
To help our clients attract new donors, we frequently help clients establish new endowment programs. We also counsel on governance and control of funds, creditor protection and restrictions on use. Our attorneys advise clients with respect to accounting issues and application of the Uniform Management of Institutional Funds Act.
Tax-Exempt Financing Opportunities
A nationally recognized bond counsel, Schiff Hardin is well known for our experience and creativity as bond counsel and counsel in other capacities in public finance transactions.
Our experience, knowledge, depth and talent in public finance allow us to serve in many different capacities in a broad array of public finance transactions.
Joint Ventures and Other Business Combinations
Joint ventures with for-profit businesses are common, but must be carefully structured. Schiff Hardin attorneys have experience structuring for-profit subsidiaries of nonprofits, partnerships involving for-profit and nonprofit entities, and mergers between nonprofits, including mergers of nonprofit and for-profit entities.
Schiff Hardin attorneys have experience in foreign transactions, including overseas grant-making, overseas direct expenditures, anti-terrorism rules, special withholding rules, and in establishing charitable organizations in foreign jurisdictions, as well as domestic “friends of” organizations.