Sidley’s Federal and State Tax Controversy practice provides thoughtful and experienced advocacy on behalf of clients in federal, state and local tax disputes nationwide. We represent clients at all stages of the administrative process, from audit through administrative appeal and post–appeals mediation, and at every judicial level, from federal and state trial courts to the United States Supreme Court.

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Two particular focuses of our practice are advising clients during the planning of transactions and before audits commence so that their case is “audit-ready” and favorably resolving disputes without litigation, whenever it is possible and in the client’s best interests. By working to resolve disputes at the earliest possible stage, we are often able to reach favorable outcomes for our clients without the additional costs, distraction, and publicity that necessarily accompany any formal tax litigation. At the same time, we understand that some disputes cannot be resolved consensually. In litigated matters, we bring to bear a team of experienced tax litigators who understand both the substantive tax issues and how to present a case effectively.

Sidley’s Tax Controversy lawyers have an in-depth understanding of tax matters arising in controversies affecting a broad array of industries, including the banking, financial products, hedge fund, heavy manufacturing, food processing, insurance, telecommunications, transportation, entertainment, and utility industries. Likewise, we have significant experience with many of the issues on which the Internal Revenue Service (IRS) and state and local taxing authorities currently focus their resources. On the federal side those include debt/equity issues, the determination of ownership of property, the domestic production deduction under Section 199, capital versus expense classifications, losses from trading in securities and commodities, inter-corporate transactions and consolidated returns, international inter-company transactions and structures, economic substance and business purpose, tax credits, valuation questions, transfer pricing, and placed-in-service date disputes. We have also handled cases involving tax shelters, accounting methods, and promoter registration. With respect to state and local controversies, our experience extends to a wide range of income, capital, and transactional tax issues. For income and business activity taxes, those issues include the composition of a combined group, add-back of intercompany expenses, business and non/business income characterization and expense attribution, fair apportionment, receipts-factor sourcing, the taxability of proprietary investing, and credit syndication transactions. For transaction taxes, our experience includes such issues as the characterization of transactions, the scope of statutory and case-law exemptions, purchase price allocations, cloud-based computing services delivery, commercial aircraft acquisition and leasing, software development, deployment, and operation, information services price allocation, telecommunications services (including bundled services), and local sourcing issues.

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