This session explores the considerations sellers should be aware of and discuss some strategies to consider when looking to mitigate state tax risks associated with such discussions.
Tax Disputes & Litigation
Our tax controversy attorneys come from a variety of backgrounds, including experience as government counsel, public accounting, and tax court clerkships.
What We Do
Our team of skilled attorneys provides experienced, effective representation in preparation for and throughout the tax controversy process. We offer full‑service representation on a multistate basis, and at all stages of the tax controversy process:
- Agency examination and audit
- Agency administrative appeals and hearings
- Tax tribunal hearings and trials
- Trial court
- Appellate court
- Tax process evaluation and automation
- Taxability research and determinations
- Tax refund review and claim preparation
- Tax exposure analysis and mitigation (i.e., voluntary disclosure agreements)
Frequently, our early involvement at the examination or protest stages permits us to help the taxpayer marshal the critical underlying facts and to define the arguments most likely to prevail. In addition, we bring the benefits of attorney‑client confidentiality and privilege to the controversy.
When litigation is advisable or necessary, we draw upon our trial experience to choose the appropriate court, develop the case through formal and informal discovery, and aggressively advocate the taxpayer’s position before the judge or jury. Our tax litigators have extensive experience in federal district courts, the United States Tax Court, the Minnesota Tax Court, the Wisconsin Tax Appeals Commission, State District Courts, the Eighth Circuit Court of Appeals, the Minnesota Supreme Court, the North Dakota Supreme Court, and the Minnesota Court of Appeals. We know tax law, but more importantly, we have the experienced advocate’s ability to develop and present the most persuasive arguments and themes.
Throughout our representation, we strive to obtain fair and thoughtful review of the dispute to achieve the best possible result for our client at the earliest opportunity.
We represent publicly owned and privately held corporations, partnerships, cooperatives, individuals and fiduciaries in tax disputes and litigation of all types against State and Federal taxing authorities. Our clients are well-recognized national, regional and local businesses. We regularly negotiate and litigate tax disputes involving corporate and personal income taxes, sales and use taxes, excise taxes, estate and gift taxes, employment taxes, property taxes, and healthcare provider taxes.
- Astleford v. Commissioner, T.C. Memo 2008-12 (gift tax case involving valuation of gifts of interests in a family limited partnership; three tiers of discounts approved by court).
- Xcel Energy Inc. v. United States (D. Minn.) (tax treatment of leveraged company-owned life insurance plan).
- O’Shaughnessy v. Commissioner, 332 F.2d 1125 (8th Cir. 2003) (multi-issue litigation involving inter alia, depreciation, abandonment loss, and change of method of accounting issues for glass manufacturing company).
- Northern States Power Company v. United States, 151 F.3d 876 (8th Cir. 1998) (multi-issue income tax case involving inter alia, placed in service date for nuclear fuel assemblies, and change of method of accounting questions).
- Sprint Communications, Ltd v. Comm’r, 578 N.W.2d 752 (Minn. 1998) (dispute over whether federal telecommunications excise tax that taxpayer collects from its customers should be included in “sales price” and taxed by the Minnesota sales tax).
- Northern States Power Company v. United States, 73 F.3d 764 (8th Cir. 1996) (multi-issue income tax case, including an “interest netting” dispute).
- O’Hagan v. United States, 95-1 USTC 50,082, aff’d, 96-1 USTC 50, 311 (8th Cir. 1996) (injunction action against IRS to restrain levy on homestead).
- O’Shaughnessy v. United States, 517 N.W. 2d 574 (Minn. 1994) (federal tax lien held unenforceable against assets of discretionary trust).
- Landmark v. United States, 25 Cl. Ct. 100 (1992) (first case in the country to hold that cooperatives are not subject to the deduction limitations of I.R.C. § 277).
- Security Bank Minnesota v. Commissioner, 98 T.C. 33 (1992), aff’d, 994 N.W. 2d 432 (8th Cir. 1993) (tax case affecting 40 Midwestern banks, which held that small cash-basis banks were not subject to the interest accrual rules under I.R.C. § 1281).
- Sprint Spectrum LP, et al. v. Commissioner of Revenue, 676 N.W.2d 656 (Minn. 2004) (Minn. Sales/Use Tax . . . telecommunications equipment, which produces telecommunication signals that have physical properties, is exempt from sales tax as capital equipment because it is used to manufacture tangible personal property).
- Bailey Nurseries v. Commissioner of Revenue, 2002 WL 1077273 (Minn. Tax), Docket No. 7255-R (May 16, 2002) (Minn. Sales/Use Tax . . . machinery and equipment for preparing soil, cultivating, harvesting and irrigating purposes, purchased by the taxpayer for use in its wholesale shrub nursery business were entitled to “farm machinery” tax rate).
- St. Paul Abrasives, Inc., et al. v. Commissioner of Revenue, 1998 WL 726457 (Minn. Tax), Docket Nos. 6814-6817 (October 12, 1998) (Minn. Sales Tax . . . taxpayers, who ran an abrasives supply business, not liable for sales/use tax on purchase of incentive items they provided to customers in a trading stamp-like redemption program, since the purchases were for resale in other states where customers redeemed their incentive points).
- Northern States Power Company and United Power Association v. Commissioner of Revenue, 571 N.W. 2d 573 (Minn. 1997) (Minnesota sales tax exemption for capital equipment held to apply to electrical transformers located outside the power plant).
- Dahlberg Hearing Systems, Inc. v. Commissioner of Revenue, 546 N.W.2d 739 (Minn. 1996) (Minn. Use Tax . . . computers destined for business use in other states not subject to Minnesota use tax simply because software was loaded at company’s Minnesota headquarters).
- Northern X-Ray Company v. Tax Commissioner, 542 N.W.2d 733 (North Dakota 1996) (defense of North Dakota contractor’s use tax claims).
- Copy Duplicating Products Inc. v. Commissioner of Revenue, Minn. Tax Court, Docket No. 6378 (July 10, 1995) (Minn. Sales Tax . . . copiers purchased by copier leasing company free of sales tax as sales for resale continued to be sold for resale when they were converted to coin-operated use because the “license to use” sold by the company to its coin-operation customers was also a resale).
- Burlington Northern Railroad Company v. Commissioner, 509 N.W. 2d 551 (Minn. 1993) (Minnesota sales tax attempted to be imposed on railroad rolling stock was held invalid under the Railroad Revitalization and Regulatory Reform Act of 1976).
Minnesota Corporate Income Tax
- Amoco Corporation and Affiliates v. Commissioner of Revenue, 658 N.W.2d 859 (Minn. 2003) (Minn. Corporate Income Tax . . . exploration and production operations of integrated oil company held not unitary with refining and marketing operations, under statutory definition of unitary business).
- Green Giant v. Commissioner of Revenue, 534 N.W.2d 710 (Minn. 1995) (Minn. Corporate Income Tax . . . income assigned to corporation jointly owned by Green Giant and Alaskan Native Corporation should be excluded from the tax computation).
Minnesota Individual Income Tax
- Chapman v. Commissioner, 651 N.W. 2d 825 (Minn. 2002) (Minnesota alternative minimum tax provision limiting charitable contribution deductions solely to Minnesota charities declared unconstitutional as discriminatory to interstate commerce).
- Cooperative Power Association v. Hennepin County, Minn. Tax Court, Docket Nos. 20070, 22041 and 24007 (March 20, 1996) (Minn. Property Tax . . . property tax valuation on headquarters of electric power cooperative reduced approx. 32 percent).
- Department Stores and Shopping Centers. We are the leading representative of department stores and major shopping center owners, developers and managers.
- Hotels and Motels. We have cutting-edge experience with the complexities of hotel and motel properties as those issues continue to evolve in national circles, and our clients include a number of national flags.
- Office Buildings. We have unsurpassed experience in the representation of office properties in both the Minneapolis and Saint Paul central business districts and in the suburban office markets.
- Environmentally Contaminated Properties. We are nationally recognized for our knowledge in the negotiation and trial of cases where the market value of the subject property is adversely affected by petroleum derivatives, asbestos, PCBs, landfills, and other forms of contaminants.
- Medical Office Buildings. We have developed considerable expertise in the valuation of medical office buildings, both in the Twin Cities Metropolitan Area and in Greater Minnesota.
- Restaurants. We have extensive experience with the difficult issues in valuing restaurant properties.
- Industrial and Manufacturing Properties. We have considerable experience with large and not-so-large industrial properties, including manufacturing, distribution and headquarters facilities.
- Apartment Buildings. We represent regional and local owners and managers of apartment complexes and properties of all types.
- Office Warehouse and Office Showroom Facilities. We regularly represent the owners and managers of office warehouse and office showroom facilities.
- Bank Properties. We have successfully represented major banks in trial and in negotiations involving branch bank and other bank properties.
News & Articles
July 27, 2020
This session evaluates how we got to the current state and focuses on challenges that taxpayers face when evaluating whether they have state tax nexus.
May 19, 2020
With the COVID-19 pandemic continuing to impact businesses within the healthcare industry, the Minnesota Department of Revenue on May 14, 2020, again offered relief to businesses with upcoming MinnesotaCare tax payment obligations.
May 7, 2020
Corporate tax departments are continually being asked to provide more documentation to defend assessments on transactions which are clearly not taxable or oftentimes have already been subject to tax. This session focuses on discussing these issues and preparing for the fight before it shows up at your door.
April 30, 2020
State tax controversy can present daunting strategy issues for taxpayers as well as service providers. This session focuses on preparing for controversy prior to audit division involvement and discusses potential strategies for defending a taxpayer position throughout the agency review phases (both audit and appeal).
April 23, 2020
This webinar provides participants with the knowledge they need to evaluate whether a property tax appeal makes sense for their properties.
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.
April 16, 2020
Our panelists address taxpayer questions their offices are most frequently asked to respond to as a result of the current environment we are working within.
April 13, 2020
With the COVID-19 pandemic continuing to disrupt business operations, the Minnesota Department of Revenue on April 10, 2020, offered additional relief to those businesses with upcoming MinnesotaCare tax payment obligations.
April 13, 2020
Webinar series offered in partnership between Fredrikson & Byron and Minnesota Society of CPAs.
April 10, 2020
On April 9, 2020, in its latest response to the COVID-19 pandemic, the Minnesota Department of Revenue offered expanded relief for businesses impacted by Emergency Executive Order 20-04. The expanded relief measures extend the payment deadline associated with these returns to May 20, 2020.
April 2, 2020
In light of the COVID-19 crisis, restaurants and businesses have shut down their operations. Tenants are struggling to pay their rent and landlords are left bearing the burden of vacancies and non-payment. Many property owners anticipate this will lead to a decrease in property values, and have already begun asking the question: Should I appeal my property taxes?
Business-Related Tax Changes Made by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
March 30, 2020
The CARES Act, signed into law on March 27, 2020, makes important changes to certain key tax provisions for businesses affected by COVID-19.
March 26, 2020
The IRS announced on March 24 that it has indefinitely suspended nearly all functions and services requiring face-to-face contact with taxpayers.
March 23, 2020
The Minnesota Department of Revenue, recognizing that several of the businesses subject to MinnesotaCare Tax have been impacted by the COVID-19 pandemic, announced certain relief measures for businesses who were unable to properly file returns by March 16, 2020.
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.
March 19, 2020
Responding to the COVID-19 pandemic, Minnesota Governor Tim Walz issued Emergency Executive Order 20-04 on March 16, 2020.
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.
February 6, 2018
In 2015, Congress passed 26 U.S.C. Section 7345, entitled “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” Although this law was passed in 2015, the IRS did not begin coordinating with the State Department immediately. However, it has announced that it will begin that process in January 2018.
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.
January 18, 2017
By Wayne W. Carlson, Michael S. Raum & Elizabeth L. Alvine
No one wants to be audited, whether by the IRS or the state tax authorities. However, there may be instances in which it is important to make sure that you are actually subject to an audit, in order to ensure that your rights are protected.