Jones Day - Services - Tax Audits & Controversies

Taxpayers rarely plan or expect to engage in a tax dispute, but the government's ever-expanding need for revenues and the complexity and uncertainty of the tax laws make tax controversies inevitable from time to time. Jones Day's extensive experience has enabled us to achieve outstanding and cost-effective results for clients confronted with contentious tax audits and litigation.

Federal Tax Controversy

The "kinder and gentler IRS" no longer exists, if it ever did. In recent years, the IRS has stepped up its audit activity, targeting wealthy individuals as well as the largest business entities, which engage in sophisticated U.S. and international transactions.

We believe that often the best approach to a potentially contentious tax audit is to shape and resolve issues with the IRS as early in the process as possible. Too often, taxpayers treat the initial stages of an IRS audit as a routine matter, not realizing that their initial responses and relationships with the auditors can shape the entire future course of the examination, for better or worse. Jones Day has found that early involvement with the client in a potentially troublesome audit, with a proactive analysis of potential weaknesses and strategic and tactical opportunities, can result in an audit that proceeds quickly, efficiently, and favorably. Often, this early focus allows a potential issue to be satisfactorily resolved before an adverse IRS position is set in stone.

If an acceptable conclusion cannot be reached during the examination, we believe that in most cases, taxpayers should take advantage of the opportunity to seek an administrative appeal. Our tax lawyers have an excellent record of settling IRS claims quickly and favorably at the administrative level. The IRS appeals process is typically informal and intended to reach agreement in most cases. Usually, we find an IRS appeal to be a far more cost-effective option than litigation. Our experience allows us to evaluate prospects on appeal and to reach favorable settlements with the IRS, without the costs and uncertainties of a judicial proceeding.

In some cases, however, an acceptable settlement simply cannot be reached—for example, when the government seeks a test case or the client desires litigation for business reasons. In those circumstances, Jones Day has an exceptional track record in providing high-quality tax litigation services. Our tax attorneys work with our outstanding litigators to provide a formidable combination of substantive tax knowledge and trial court savvy. Our Tax Litigation teams have provided outstanding representation at all judicial levels—Tax Court, federal district courts, the Court of Federal Claims, U.S. courts of appeals, and the Supreme Court.

State Tax Controversy

Jones Day's State and Local Tax Practice is staffed by 26 lawyers serving clients, both U.S. and non-U.S., who call upon the Firm to represent their interests in tax controversies throughout the United States. Jones Day's state and local tax controversy services include representation in audits involving clients with an eye toward the elimination or reduction of potential assessments of additional tax; challenges brought in trial courts and administrative tribunals to assessments that have been issued; and representation of clients before the appellate courts of the states.

International Tax Controversy

Jones Day operates in more than a dozen countries in addition to the U.S., and in many of those international offices, our resident lawyers provide a full range of tax services, including representation of clients engaged in tax controversies and tax litigation with the relevant taxing authority. We are also well positioned to provide assistance with nontraditional international procedures, as well as alternative dispute resolution methods available under local law. Such alternative procedures, which can prove quite cost-effective, include advance pricing agreements (APAs), prefiling agreements and advance rulings, and the "competent authority" procedure provided under the mutual agreement article of most income tax treaties.

	Print Page Email Page Select a Language Tax Audits & Controversies - Overview
Lawyers Staff Overview Experience Professionals Publications Main Practice Tax	Taxpayers rarely plan or expect to engage in a tax dispute, but the government's ever-expanding need for revenues and the complexity and uncertainty of the tax laws make tax controversies inevitable from time to time. Jones Day's extensive experience has enabled us to achieve outstanding and cost-effective results for clients confronted with contentious tax audits and litigation. Federal Tax Controversy The "kinder and gentler IRS" no longer exists, if it ever did. In recent years, the IRS has stepped up its audit activity, targeting wealthy individuals as well as the largest business entities, which engage in sophisticated U.S. and international transactions. We believe that often the best approach to a potentially contentious tax audit is to shape and resolve issues with the IRS as early in the process as possible. Too often, taxpayers treat the initial stages of an IRS audit as a routine matter, not realizing that their initial responses and relationships with the auditors can shape the entire future course of the examination, for better or worse. Jones Day has found that early involvement with the client in a potentially troublesome audit, with a proactive analysis of potential weaknesses and strategic and tactical opportunities, can result in an audit that proceeds quickly, efficiently, and favorably. Often, this early focus allows a potential issue to be satisfactorily resolved before an adverse IRS position is set in stone. If an acceptable conclusion cannot be reached during the examination, we believe that in most cases, taxpayers should take advantage of the opportunity to seek an administrative appeal. Our tax lawyers have an excellent record of settling IRS claims quickly and favorably at the administrative level. The IRS appeals process is typically informal and intended to reach agreement in most cases. Usually, we find an IRS appeal to be a far more cost-effective option than litigation. Our experience allows us to evaluate prospects on appeal and to reach favorable settlements with the IRS, without the costs and uncertainties of a judicial proceeding. In some cases, however, an acceptable settlement simply cannot be reached—for example, when the government seeks a test case or the client desires litigation for business reasons. In those circumstances, Jones Day has an exceptional track record in providing high-quality tax litigation services. Our tax attorneys work with our outstanding litigators to provide a formidable combination of substantive tax knowledge and trial court savvy. Our Tax Litigation teams have provided outstanding representation at all judicial levels—Tax Court, federal district courts, the Court of Federal Claims, U.S. courts of appeals, and the Supreme Court. State Tax Controversy Jones Day's State and Local Tax Practice is staffed by 26 lawyers serving clients, both U.S. and non-U.S., who call upon the Firm to represent their interests in tax controversies throughout the United States. Jones Day's state and local tax controversy services include representation in audits involving clients with an eye toward the elimination or reduction of potential assessments of additional tax; challenges brought in trial courts and administrative tribunals to assessments that have been issued; and representation of clients before the appellate courts of the states. International Tax Controversy Jones Day operates in more than a dozen countries in addition to the U.S., and in many of those international offices, our resident lawyers provide a full range of tax services, including representation of clients engaged in tax controversies and tax litigation with the relevant taxing authority. We are also well positioned to provide assistance with nontraditional international procedures, as well as alternative dispute resolution methods available under local law. Such alternative procedures, which can prove quite cost-effective, include advance pricing agreements (APAs), prefiling agreements and advance rulings, and the "competent authority" procedure provided under the mutual agreement article of most income tax treaties.