Tax Controversy
We represent clients in all aspects of federal, state, and local tax controversies including audits, administrative appeals and litigation in the U.S. Tax Courts, U.S. Court of Federal Claims and the Federal District, Bankruptcy and Appellate Courts.
Summary
Procopio’s Tax Controversy practice, led by former Internal Revenue Service counsel, represents U.S. and foreign companies, investment funds, founders, and high net worth individuals in high exposure disputes with the Internal Revenue Service, the California Franchise Tax Board, and other tax authorities. Our team handles domestic and cross-border matters and includes bilingual tax attorneys licensed in multiple jurisdictions, including California, Washington DC, Puerto Rico, and Mexico. We advise clients at every stage of a tax controversy, beginning with the initial contact by a taxing authority and continuing through audit, administrative appeals, and litigation in court.
Procopio has expanded its tax capabilities, including adding partners to its Trusts and Estates and Private Client practices, which strengthens its ability to handle associated tax controversy matters.
Attorney Jorge Obén-Cuadros, who previously served in the IRS Associate Office of Chief Counsel (International), recently joined the Procopio International Tax team. Mr. Oben, a native of Puerto Rico, represents clients in IRS audits related to, among other things, Act 60 and the IRS Puerto Rico Audit Campaign.
Federal Tax Controversies
We represent clients throughout the United States and abroad in disputes with the IRS, including litigation in the U.S. Tax Court, Federal District Courts, and U.S. Court of Federal Claims.
State and Local Tax Controversies
Our attorneys handle audits, appeals, and litigation with state and local tax authorities, including the California FTB.
Tax Residency Audits
We specialize in representing clients before the FTB in California residency challenges and in litigating federal tax residency cases, including under Article IV of the U.S.–Mexico Tax Treaty.
Shareholder Representative Controversies
Procopio leverages its extensive Mergers & Acquisitions experience in representing shareholder representatives after a transaction, both before the IRS or FTB (e.g., in defending tax return positions related to the transaction structure) and with the other party to the transaction (e.g., in tax disputes post-closing, such as for tax return preparation or ownership of tax assets).
Estate and Gift Tax Controversies
The firm advises high-net-worth individuals and families on disputes involving federal and state estate and gift taxes.
International/Cross-Border Tax Disputes
Procopio represents U.S. and foreign clients with disputes related to international tax issues, including protecting residency positions and reducing penalties. This includes controversies with the IRS regarding cross-border transactions and reporting requirements, including international information return penalties (e.g., 3520 and 5471) and FBAR (FinCEN Form 114) penalties.
Puerto Rico Tax Incentives for Individual Investors and Businesses
Procopio advises individuals and businesses planning to move to Puerto Rico or already operating on the island under Act 60 (formerly Acts 20 and 22) on residency, income-sourcing, and incentive-eligibility requirements. Our services include pre-move planning, ongoing compliance guidance, assistance with current and amended U.S. and Puerto Rico tax returns, evaluation of voluntary-disclosure options, and controversy-avoidance strategies. When disputes arise, we represent clients before the IRS in examinations, administrative appeals, and related enforcement actions involving Act 60 positions.
Nonprofit tax matters
Procopio handles tax compliance and tax controversy matters for tax-exempt organizations and charities.
- Settled a multimillion-dollar tax residency case involving whether a Mexican national was entitled to claim tax residency in Mexico under the Article IV tie breaker rules in the U.S.-Mexico Tax Treaty.
- Prevailed in a late Form 3520 penalty matter resulting in an over $20 million abatement.
- Settled a multimillion-dollar FBAR penalty suit for refund case with the Department of Justice.
- Secured an IRS abatement of nearly $1 million in employment-tax penalties for a business client.
- The Procopio International Tax Institute, hosted by the firm for over 20 years, regularly features sessions on resolving tax controversies in a global context.
- Prevailed in the case of Gagliardi v. Commissioner of Internal Revenue (T.C. Memo. 2008-10), a significant tax case involving the treatment of gambling losses and the standards for substantiation of those losses.
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