Remember how back in December of 2021 in “As Sherlock Holmes Would Say, ‘The Game’s Afoot’: A Possible SCOTUS Tax Case?” we told you that there was a split in the Circuits regarding the imposition of non-willful FBAR penalties by the IRS on noncompliant taxpayers, and predicted the Supreme Court would accept this case, as unlikely as that may have been historically for a “tax” case?
Masha chairs Fredrikson’s Tax Disputes and Litigation Group. She represents public and private companies, trusts, estates and high-net-worth individuals in complex tax disputes. She handles all stages of tax controversies – voluntary disclosures, audits, administrative appeals, tax court, district court and appellate litigation.
Her experience includes resolving and litigating numerous types of tax disputes:
- State Corporate Income and Franchise Taxes, including nexus and Public Law 86-272, combination, business versus non-business income, allocation and apportionment issues (including sales factor sourcing), and credits (e.g., R&D, JOBZ, etc.);
- Sales and Use Taxes, including nexus, taxation of goods and services (e.g., digital goods, computer software, software as a service, telecommunication services, sales of electricity, advertising, prepared food), bundled transactions, sales for resale, “sales price” (e.g., cost of goods sold, services necessary to complete the sale, delivery charges, discounts, consideration received from third parties), sourcing, exemptions (e.g., qualified data center, manufacturing/industrial production, capital equipment, advertising, occasional sales, waste management, purely public charities), qui tam actions, and voluntary disclosures;
- Federal and International Tax Disputes, including audits and appeals involving the Global High-Net Worth initiative, offshore foreign financial asset disclosures, section 469 passive/non-passive income and losses, and section 183 hobby losses;
- Real and Personal Property Taxes, including state-assessed property (railroads, pipelines, utilities) and exempt property (public hospitals, hospital districts, clinics, nursing homes, churches, and institutions of purely public charity);
- Other State and Local Taxes, including MinnesotaCare Tax, Insurance Premiums Tax, Withholding Taxes (including worker classification), Tobacco Products Tax, and Minneapolis Entertainment Tax;
- State Individual Income Tax, including audits and appeals involving residency changes, personal and officer liability, criminal tax matters, section 469 passive/non-passive income and losses, and section 183 hobby losses.
Masha serves clients from a variety of industries, including retail, product distribution, manufacturing, financial services, insurance, aerospace, computer software, energy, healthcare, telecommunications, aerospace/automotive, hotel, cooperatives, restaurants, and entertainment.
State Corporate Income and Franchise Taxes
- Represent an air carrier in an income tax dispute before the Minnesota Tax Court in which the court held that the Minnesota Minimum Fee’s inclusion of Minnesota sales or receipts for airlines is preempted by the federal Anti-Head Tax Act, 49 U.S.C. § 40116, which prohibits states from taxing the gross receipts of airlines.
- Represent several large manufacturers before the Minnesota Department of Revenue and the Minnesota Tax Court in Public Law 86-272 disputes.
- Represented a publicly traded manufacturer in a corporate franchise tax dispute before the Minnesota Tax Court regarding whether a manufacturing entity was unitary with a related financial services entity, whether one of the related entities had nexus with Minnesota, and regarding unconstitutional distortion resulting from the state’s assessment and alternative apportionment.
- Represent a multi-tiered pass-through entity in a dispute before the Minnesota Department of Revenue regarding whether related lower-tiered partnerships that were controlled by an unrelated third party were unitary with the parent holding company.
- Represented a food processing company before the Minnesota Tax Court in a corporate franchise tax dispute. At issue was how to source the client’s “bill and hold” sales to its customer for sales factor purposes when title to the goods transferred to the customer while the products were in Minnesota, but the customer did not physically receive the goods in Minnesota.
Sales and Use Tax
- Represented a large retailer (Fortune 50) before the Minnesota Department of Revenue and the Minnesota Tax Court in a dispute relating to whether software purchased by the retailer and loaded or used at the retailer’s qualified data center was exempt from Minnesota sales and use tax.
- Represented a marketplace provider before the Minnesota Tax Court in a sales-and-use tax dispute regarding whether a marketplace was responsible for sales and use tax collection for periods before the effective date of Minnesota’s marketplace provisions.
- Represented Ticketmaster in a sales tax matter before the Minnesota Tax Court. Following trial, the court held that Ticketmaster’s convenience charges and processing fees are not subject to the Minneapolis Entertainment Tax.
- Represented a telecommunications provider (Fortune 100) in a sales-and-use tax dispute relating to sourcing of telephone calls as well as the taxability of free phones given away with purchases of services.
- Represented a distributor of medical imaging equipment and x-ray consumables in a sales tax matter before the Minnesota Tax Court. Following trial, the court held that discounts/credits received by the distributor from manufacturers in exchange for honoring pricing agreements between the manufacturers and their customers are not part of the gross receipts from the retail sale and as such are not subject to sales tax.
- Represented 16 electrical cooperatives in Minnesota sales tax refund appeals before the Minnesota Tax Court and Minnesota Supreme Court relating to determining the correct sales price of electricity sold by the cooperatives and addressing whether the state’s assessments of refunds previously issued were barred by the erroneous refund statute of limitations.
- Represented an emerging retailer in multistate sales tax disputes regarding nexus and several qui tam
- Represented a hospital district in a property tax exemption matter before the Minnesota Supreme Court and Minnesota Tax Court, in which the Minnesota Supreme Court affirmed the Minnesota Tax Court’s opinion that medical clinics owned and operated by the District were exempt from property tax because they were operated to improve and run the hospital—they helped attract physicians and patients, improved the hospital’s overall operations and service delivery, increased patient follow-up, provided physical space for use by other Hospital departments.
- Represented a pipeline in a series of personal property tax appeals before the Minnesota Tax Court.
Federal and International Tax
- Represent individuals in audits by the IRS’s Global High Net Worth team.
- Represent clients before the IRS in audits and appeals relating to Foreign Bank Account Reporting (FBAR), foreign pension plans (including superannuation funds), foreign trusts, ownership of non-U.S. entities (including Passive Foreign Investment Companies—PFICs) and other unreported offshore assets and income.
- Represented a client in a built-in-gains tax matter before the U.S. Tax Court.
- Represented clients in a transferee liability matter before the U.S. Tax Court.
- Assist individuals and companies in becoming compliant with their U.S. tax and reporting obligations through the IRS’s 2009, 2011, 2012 and 2014 Offshore Voluntary Disclosure Programs (OVDI and OVDP), Streamline Programs (SDOP and SFOP) and Delinquent Filing Procedures.
Individual Income Tax
- Represented an individual before the Minnesota Tax Court in a residency dispute in which, following a trial, the Minnesota Tax Court held that the taxpayer was a domiciliary of Florida and not Minnesota, even though his wife remained a Minnesota resident.
- Assist clients with planning and executing residency changes from Minnesota to other states.
Other Tax Types
- Represent clients in MinnesotaCare Tax audits and appeal before the Minnesota Department of Revenue and the Minnesota Tax Court.
- Regularly represent companies in worker classification audits and appeals before the Minnesota Department of Revenue and the IRS.
Articles & Presentations
June 9, 2022
Since the beginning of the pandemic, Minnesota’s nexus waiver policy provided that the state will not assert nexus for business income tax or for sales and use tax purposes “solely because an employee is temporarily working from home due to the COVID-19 pandemic.”
December 3, 2021
If you are into Foreign Bank Account Reports (FBARs), your concern about penalties for failing to comply with those FinCEN 114 reporting rules just took an exciting, and perhaps fearsome, turn.
November 11, 2021
For years, remote workers had been complicating state tax compliance for companies. When the U.S. Supreme Court’s decision in Wayfair came out in June 2018, many believed that the decision’s economic nexus standards would reduce complexity surrounding remote workers.
August 12, 2021
Since 1959, taxpayers have been relying on a federal law—Public Law 86-272—to protect them from having to file state income tax returns in states where the taxpayers’ in-state activities are limited to just soliciting sales of tangible personal property. On August 4, 2021, the Multistate Tax Commission (MTC) member states voted 20-0 to revise the MTC’s “Statement of Information” regarding Public Law 86-272 in an attempt to eviscerate the federal law’s protections.
June 3, 2021
Minnesotans are wondering: could or should they change their residency to achieve income tax savings?
November 17, 2020
The Minnesota Department of Revenue has updated its data center exemption guidance, taking a step in the right direction for purchases of distributed software and required documentation.
April 22, 2020
As social distancing methods and shelter-in-place orders during the COVID-19 pandemic have prompted many across the country to work from home, businesses have begun to wonder about the nexus ramifications of their newly-expanded telecommuting arrangements.
March 21, 2020
COVID-19 has had innumerable impacts on our daily lives. In response, the IRS and certain local states have provided guidance for taxpayers whose federal income tax returns are due on April 15.
September 10, 2018
Individuals or companies with undisclosed foreign financial assets or income have until September 28, 2018 to enter the IRS’s Offshore Voluntary Disclosure Program.
June 22, 2018
By Masha M. Yevzelman & Thomas R. Muck
A merchant of goods and services that makes sales in multiple states is no longer required to have physical presence in a state in order to be subject to sales and use tax in that state.
September 1, 2017
Effective for tax years beginning after December 31, 2016, a “financial institution” for Minnesota tax purposes includes both corporations and “other business entities,” such as limited liability companies, that perform financial institution activities.
June 1, 2017
Should keeping a bank account or financial adviser in Minnesota be considered when determining where a person is a resident?
Residency Legislative Alert: Location of Attorney, CPA, Financial Adviser or Bank Account May No Longer Be Considered in Domicile Determinations
May 31, 2017
By Masha M. Yevzelman & Thomas R. Muck
When evaluating whether an individual is a Minnesota resident, the Minnesota Department of Revenue has been considering, among many factors, the location of a person’s attorney, accountant, financial adviser and bank accounts.
December 1, 2016
Financial institutions have not been shy about challenging Minnesota Department of Revenue tax determinations in court. For example, in the 1980s and early 1990s, the banking industry prevailed against the state’s unconstitutional imposition of the bank excise tax. Then, in 1998, Firstar Corporation (headquartered in Wisconsin) convinced the Minnesota Supreme Court that, for purposes of the corporate franchise tax, the bank’s sale of an office building in Wisconsin was “nonbusiness income” taxable only in Wisconsin, rather than “business income” apportioned among several states, including Minnesota.
February 1, 2011
Since 1970, the Bank Secrecy Act has required U.S. persons who have in aggregate more than $10,000 in foreign financial accounts to report certain information about those accounts to the Department of the Treasury using Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
PUBLICATIONS & PRESENTATIONS
- Speaker, “The Sales Price Shakedown: Discounts, Bundling, and Services Necessary to Complete the Sale,” Institute for Professionals in Taxation Annual Conference, June 26-29, 2022
- Co-presenter, “The Great Migration: State and Local Tax Implications of Interstate Migration,” American Bar Association Tax Section, May 13, 2022
- Co-presenter, “Should I Let My Employees Work Remotely? State Income, Sales and Withholding Tax Nexus in a Post- Pandemic World,” Associated Corporate Counsel (ACC) Minnesota, March 30, 2022
- Co-presenter, “Developments in Property Tax Exemptions,” Minnesota CLE 2021 Property Tax Institute, February 28, 2022
- Co-presenter, “Residency/Remote Workers: Tax Updates on Residency and Considerations with Remote Workers,” Minnesota CLE 2021 Tax Institute, December 14, 2021
- Co-presenter, “State Tax: Multistate Legislative Session Review,” Fredrikson & Byron and COST Webinar, June 10, 2021
- Co-presenter, “FBAR Controversies Continue: Foreign Account Reporting, Compliance Requirements, and Litigation Update,” Fredrikson & Byron Webinar, April 29, 2021
- Co-presenter, “Conservation Easement Donations: Great for the Environment, Thorny for Taxpayers,” Fredrikson & Byron Webinar, March 18, 2021
- “Minnesota Data Center Exemption: DOR’s Revised Guidance Shows Progress,” Tax Notes State, December 14, 2020
- Co-presenter, “Leaving Town? Top 10 Minnesota Residency Myths Debunked,” Fredrikson & Byron Webinar, November 12, 2020
- Co-presenter, “Looking to Sell? Pre-Sale Considerations and Strategies to Avoid State Tax Pitfalls,” Fredrikson & Byron Webinar, October 8, 2020
- Co-presenter, “How COVID-19 Is Forcing States and Taxpayers to Re-Sweep the Minefield,” Fredrikson & Byron Webinar, August 13, 2020
- Co-Presenter, “SALT Controversy Strategies from Audits through Litigation,” The State Tax Webinar Series, hosted by Fredrikson & Byron and Minnesota Society of CPAs, April 30, 2020
Honors & Education
- University of Minnesota, J.D., 2007, magna cum laude
- Macalester College, B.A., 2004, magna cum laude
- Minnesota, 2007
- Wisconsin, 2016
- U.S. District Court for the District of Minnesota, 2007
- U.S. Tax Court, 2012
- Russian (native speaker)
- “Women in Business Honoree,” Individual Recognition, Minneapolis/St. Paul Business Journal, 2022
- Friend of the Profession Award, Minnesota Society of CPAs, 2021
- Jack Carlson Memorial Distinguished Service Award, Minnesota State Bar Association, 2020
- Minnesota Lawyer, “Attorney of the Year,” Individual Recognition, 2020
- Minnesota State Bar Association, North Star Lawyer, 2014
- Benchmark Litigation, Future Star, 2009
- Minnesota Law Review, Managing Editor, 2006-2007; staff member, 2005-2006
- Order of the Coif
- Institute for Professionals in Taxation, Twin Cities Local Luncheon Group Chair
- American Bar Association, State and Local Tax Executive Committee Member
- Minnesota Center for Fiscal Excellence, Executive Committee Member
- Minnesota State Bar Association, Tax Section Council Member, 2012-present, Tax Section Council Chair, 2015-2016
- Hennepin County Bar Association
- Lakewinds Natural Foods Cooperative, Board Member and Board Secretary, 2011-2013