Tax Planning, Compliance and Litigation
Varnum’s tax team unites the tax compliance, planning and litigation skills of one of Michigan’s oldest law firms with one of the Midwest’s premier tax boutique practices
We are respected throughout the region for our ability to assist clients in all matters relating to federal and state tax audits, litigation and planning.
We focus on the resolution of civil and criminal tax controversy cases with federal, state and local governments. Our extensive record of service includes thorough preparation of cases and a willingness to litigate appropriate legal issues as needed. Accounting and legal professionals throughout the Midwest refer their clients to Varnum with confidence.
Varnum tax lawyers also offer a practical approach to tax counseling based on a wealth of experience. We represent healthy and growing businesses, as well as those facing serious challenges in tax planning, audits and tax investigations. Our attorneys and tax professionals offer sound and practical out-of-court tax solutions and compliance guidance in addition to our well-known skills in controversy and litigation.
The Varnum tax team includes skilled technical attorneys and other professionals with previous experiences such as:
- Senior Trial Attorney for District Council of the IRS
- Legal counsel of the Michigan Department of Treasury
- Michigan Department of Treasury Audit Manager
- IRS special agent and revenue agent
Special Trial Attorney in the Office of Chief Counsel to the IRS
Our professionals are widely experienced in a variety of tax-related activities, such as serving as law school and graduate tax level instructors, and speaking at national, regional and local tax seminars for professionals. They also serve as leaders for professional tax organizations including:
- American Bar Association Tax Section
- State Bar of Michigan Tax Section
- Tax Executive Institute
Federal Tax Law
Varnum’s tax attorneys have represented healthy and growing businesses, as well as those facing serious challenges in tax planning, audits and tax investigations. We have represented businesses, entrepreneurs and individuals in both civil tax examinations and criminal tax investigations and trials. Our attorneys and tax professionals offer sound out-of-court tax solutions and compliance guidance.
Federal Tax Litigation
Varnum plans and litigates on behalf of taxpayers before federal and state tax authorities. We have litigated in various federal district courts, the U.S. Tax Court, U.S. bankruptcy courts, Court of Federal Claims, as well as the Michigan Tax Tribunal, Michigan Court of Claims, Michigan appellate courts and the Michigan Supreme Court.
In addition to Michigan and federal tax controversies, we help large multistate firms resolve tax compliance issues across multiple jurisdictions. We have helped clients with state or local tax controversies in California, Pennsylvania, Ohio, Tennessee, Kentucky and other states.
Whether dealing with a federal civil or criminal matter or a state civil or criminal matter, Varnum advises and advocates on your behalf. We strive to minimize your exposure in tax matters and we always pursue favorable outcomes.
Planning for Success
In addition to federal and state controversies, we provide full-service tax planning, typically for businesses or individuals with significant assets.
We maximize tax savings for companies or individuals engaged in acquiring or selling a business or business unit. Varnum’s Tax Planning Compliance and Litigation Team has conducted major transactions involving high-profile businesses, including professional sports franchises.
The Tax Planning, Compliance and Litigation Team provides experienced advice regarding complex tax accounting issues in controversies with the IRS.
Tax debts are responsible for approximately 80 percent of all bankruptcies. Some tax debts are dischargeable in bankruptcy court; others are not, but the Tax Planning, Compliance and Litigation Team possesses the skill and knowledge to maximize results.
We have experience in securing the non-assertion aspects and abatement of numerous income, estate and gift tax penalties.
Responsible Person Planning
Tax liability can extend beyond business owners to executives and financial professionals. A thorough tax inventory is an important part of a business owner’s exit strategy. We advise clients on ways to minimize risk.
Leaders in Tax Law
Our firm has been influential in shaping, and in some cases challenging, the course of tax law at the state and federal level. Journalists seek out Varnum’s tax attorneys for comment on major tax issues of the day.
In addition to our federal criminal, federal civil, state and local civil and state and local criminal subgroups, the Tax Planning Compliance and Litigation Team specializes in other tax-related affairs.
White Collar Criminal Defense
Varnum defends individuals or corporations accused of committing white collar crimes, such as health care fraud, bank fraud and customs violations. Because of our tax background, we are specialists at tracking the movement of funds, which can mean the difference between conviction and acquittal in many cases.
Tax Shelter Defense
Varnum represents those who need independent advice and assurance, specifically those who have become ensnarled in the sophisticated tax shelters targeted in recent IRS compliance initiatives.
Tax-Exempt Obligations and Public Finance
Varnum attorneys have extensive experience in representing parties in the issuance of tax-exempt obligations, including traditional governmental bonds, small issue private activity bonds and qualified 501(c)(3) bonds. We serve as bond counsel and counsel to underwriters, bond purchasers, letter of credit banks, borrowers and bond obligors.
Michigan Property Tax Services and Appeals
Nationally, property taxes result in the same amount of revenue as state and federal income taxes combined. Yet while most taxpayers understand how their income tax will be calculated, the calculation of property taxes is often not as clear. In addition, many assessor decisions are subjective, and frequently, assessors have no access to important information that can affect a property's value. Mistakes are made. In Michigan, these mistakes can result in excessive taxes unless they are appealed in a timely manner.
Varnum's Property Tax Services and Appeals Team understands from firsthand experience the process of Michigan property assessment and appeals. Our property tax team includes an assessor and former counsel to the Michigan Department of Treasury, as well as accountants and experienced attorneys. We are experienced in litigation cases from residential subdivisions to large commercial and industrial properties.
Property Tax Assessment Review
Our property tax service begins with a review of your assessment. If we believe your property is over-assessed, we can recommend whether planning opportunities exist to claim exemptions or tax incentives. Most of our fees are contingent on the amount of tax savings that we are able to recover (by Michigan law, clients are responsible for costs).
The Varnum Property Tax Services and Appeals Team maintains a respect for the role of assessors. We believe that most property tax disputes between taxpayers and governments can be resolved quickly and amicably, and we look forward to assisting you.
Qualified Opportunity Zones
Qualified Opportunity Zones – a provision in the 2017 Tax Reform Bill – emerged as a hot topic with the first round of new proposed regulations released in October 2018. Learn more about Varnum's dedicated QOZ Team.
State and Local Tax Law
Varnum’s State and Local Tax (SALT) attorneys have extensive experience in all aspects of state and local tax including tax planning, litigation and legislative services on a multistate basis relating to the Michigan Business Tax, and state income, franchise, sales and use taxes. We handle matters for a variety of business enterprises, from closely-held business to Fortune 1000 companies to not-for-profit entities.
Our experience includes:
- Sales and use tax
- State income tax
- Franchise tax
- Single business tax
- Real property tax
- Personal property tax
- Motor fuel tax
- Tobacco tax
The SALT team consists of attorneys with government experience, experience as in-house state tax counsel, public accounting experience, graduate education in taxation, and CPA certification. Our attorneys have many years of experience representing clients in state tax controversies, multistate tax planning and the legislative process.
Multistate Tax Planning – State Income and Franchise Taxes
We counsel clients in all aspects of income and franchise tax liability in a particular state or states. Our attorneys provide frequent guidance on nexus issues, including the protection provided by Public Law 86-272 and the U.S. Constitution. We have experience in conducting multistate nexus studies; consolidated return issues; business and non-business income issues; apportionment and factor calculation issues; cost of performance issues; allocation issues; and in the treatment of net operating losses. We frequently counsel clients on issues involving the state and local taxation of partnerships, limited liability companies and subchapter S corporations.
Sales, Use and Gross Receipts Taxes
Our attorneys counsel clients in all aspects of sales, use and gross receipts taxes. We have experience in identifying and claiming specific exemptions from tax, determining exclusions from tax, application of the tax in corporate reorganizations, acquisitions and dispositions, and application of the tax in specific circumstances such as drop-shipments, service transactions and acquisitions and sales of large corporate aircraft.
Real Property and Transfer Taxes
Varnum tax attorneys work with our real estate and federal tax attorneys with respect to real estate transactions and have experience in real property tax litigation. Our attorneys have handled real estate tax issues in corporate acquisitions and divestitures, for multistate entities and not-for-profit entities.
Miscellaneous Other State and Local Taxes
Varnum's SALT team has experience in the wide variety of tax issues that arise from state to state including those related to specific industries such as utilities and telecommunications, business operations such as occupation or license taxes, and state and local specific taxes such as hospitality, motor fuel and tobacco taxes.
Multistate Tax Litigation
One key to success is our experience with complex state tax appeals. The SALT team has substantial experience in tax litigation before administrative agencies and courts in Michigan and around the nation. The firm utilizes a network of skilled and experienced local counsel who facilitate our multistate practice in Illinois, Indiana, New York, Ohio, Pennsylvania and Tennessee.
Tax Amnesty and Voluntary Disclosure Agreements
We assist clients in determining their exposure for state taxes and work to minimize that exposure through identifying tax amnesty programs and negotiating voluntary disclosure agreements.
SALT team services include:
- Consulting during the audit, conference and informal hearing stages
- Appeals to the Michigan Tax Tribunal, Court of Claims, Michigan Court of Appeals and Michigan Supreme Court
- Consulting services to our business clients relative to their respective SALT practices to minimize costs
- Consulting services to optimize investment, job creative and retention, tax incentives and other tax savings opportunities
- Legislative services in support of client interest in state and local tax laws and regulation
- Accounting services in support of the consulting, litigation and legislative activities
Voluntary Disclosure Program for Taxpayers and CPAs
Voluntary disclosure can provide a way for taxpayers to proactively respond to situations in which there has been a breach of legal obligation with respect to taxes and which is not yet known to the regulatory agency – usually the IRS or a state revenue agency. Properly executed, a voluntary disclosure can allow a taxpayer to rectify the situation and can significantly reduce the penalty that would otherwise result if the breach were discovered through a governmental audit or discovery process.
Why should I consider working with an attorney on voluntary disclosure?
For areas where there is a clear violation, working with a Varnum attorney on a voluntary disclosure can provide a level of protection for both the CPA and the client under the attorney/client privilege. Oftentimes, CPAs are the first to become aware of a client's potential violation. On a proactive basis, we work with CPAs to help spot issues and to formulate a strategy that minimizes exposure to both the CPA and the taxpayer. If there is an investigation, the tax preparer will be asked if s/he spoke to the client about the violation. This type of question can place the CPA in a difficult position. We provide ways for you to approach areas of concern with clients whom you suspect have a potential problem.
Why should I work with Varnum?
Varnum's tax controversy professionals have significant experience in this area. Our team has received national recognition in tax law and tax litigation by one of the few law firm rating organizations that bases rankings on actual client research. We have successfully handled a wide range of matters with the IRS on behalf of all types of taxpayers. We have successfully completed many voluntary disclosure projects with the IRS and with more than 40 state revenue agencies. We work with you to evaluate whether a voluntary disclosure is right for your specific circumstances, and prepare and file a disclosure that minimizes exposure to potential civil and criminal penalties.
Our experienced team includes skilled technical attorneys and other professionals with previous experience including:
- Senior trial attorney for District Council of the IRS
- Special assistant U.S. attorney for the Department of Justice
- Legal counsel of the Michigan Department of Treasury
- Michigan Department of Treasury audit manager
- IRS special agent and revenue agent
- Certified public accountant designation
How will Varnum work with me and my client?
We have been doing this work for more than 25 years. We strive to keep matters and identities confidential and out of the headlines, preserving your client’s confidentiality and possibly their financial and personal reputation. In many cases, we will be able to retain you to serve as an expert during the process so you can continue to assist your client while we work through the voluntary disclosure.
If you are aware of potential reporting issues in your client’s business, do not hesitate to contact us. We can provide guidance on the most appropriate course of action.
“I have had excellent consulting, planning and execution with Varnum when working with tax saving ideas.”
Vice President, sanitation company