We have recently handled or are currently handling active audits and refund claims in the following matters:
- Representing 550 employees of a Fortune 500 company in a dispute over Code section 409A's application to certain stock options; $40M of federal and state taxes at issue.
- Assisting with three tax refund claims totaling over $400M, relating variously to FICA taxes, railroad retirement taxes, and the research credit.
- Assisting with two audits involving the timing and amount of certain stock option deductions, with the amounts at issue totaling over $450M, and with two golden parachute tax audits, with the amounts at issue totaling over $250M, as well as an audit involving a dispute over a corporate-owned life insurance policy ($15M), and three audits involving payroll tax penalties relating to the timing of payroll tax deposits and the proper filing of employment returns totaling $8M.
- Assisting with two companies' voluntary "confessions" of previously under deposited payroll taxes, totaling $4M and two audits of company cafeterias, involving both deductions and payroll taxes; (repeated below).
- Assisting 5 different Fortune 500 companies with their tax planning and computations relating to change in control payments.
- Applied and received three favorable private letter rulings this year involving Code section 162(m).
- A $600M deduction for stock option compensation, where the affected optionee claims that the option spread should have been measured months after exercise.
- A $400M dispute over the characterization of certain warrants as compensation versus a capitalized expense.
- Two disputes (with taxes totaling $40M) relating to the allocation of stock option deductions between the option-granting companies and the optionees' employers after complicated corporate reorganizations.
- Income and FICA tax withholding of $20M on nonresident alien flight attendants who have minimal service in the United States.
- A FICA tax refund of $20M relating to the FICA taxation of contract renegotiation bonuses (one of four cases currently in litigation).
- A FICA refund of $10M relating to FICA taxes on deferred compensation, where the price of the stock held in the plan declined 95% after FICA taxes were imposed.
- An income tax audit ($5M at issue) relating to the disallowance of a deduction of airplane expenses as a hobby loss where an executive uses the plane for travel to board meetings for a dozen different corporate boards.
- A New York State underwithholding case, involving employees who work in or commute to New York, but never reported any income to the state.
- Several controversies relating to whether medical residents are subject to FICA taxes. This issue affects all teaching hospitals and is a multibillion-dollar industry issue.