Todd Rothbard, a Santa Clara attorney, got a letter from the IRS a few weeks ago saying he miscalculated his 2019 taxes and was due more than $284,000, reports Louis Hansen in The Mercury News’ California News.

Rothbard called to his accountant and they agreed his return was correct and he was not owed any money. Rothbard tried calling the IRS for days but could not get through.

“This week, a second envelope arrived with a check for a little more than $285,000 — presumably, it included interest on the money he doesn’t think he deserves.”

“‘I’m pretty scrupulous,’ said Rothbard, who runs a busy property rights law firm with about two dozen employees. ‘There’s no way I’d miss $285,000.'”

Read the story.

“Texas tech mogul Robert T. Brockman has been charged in a $2 billion tax evasion case, the largest ever tax charge in the United States,” reports Clare Duffy in CNN Business.

“A federal grand jury returned an indictment alleging that Brockman, the CEO of software company Reynolds & Reynolds, engaged in tax evasion, wire fraud, money laundering and other crimes as part of a nearly 20-year scheme to conceal around $2 billion in income from the Internal Revenue Service and defraud investors in his software firm’s debt securities, federal authorities said in a release.”

Read the article.

“The law partner of the tax attorney believed to be a cooperating witness in a sweeping New Jersey pay-to-play corruption investigation has been charged with lying about thousands in political contributions made to secure lucrative municipal contracts,” reports Ted Sherman in NJ.com’s Politics.

“Elizabeth Valandingham, 47, was accused by the state Attorney General’s office of falsely claiming that her firm had not made any reportable contributions to candidates in two towns where the firm had been vying to provide legal services — when in fact it had.”

“Valandingham was a partner of Matthew O’Donnell, the Morristown tax attorney who reportedly served as an undercover informant in the wide-ranging state sting that led to charges in December against five people, including elected and former officials and political candidates. They were accused of taking tens of thousands in bribes disguised as campaign contributions in return for steering legal work to a law firm that multiple sources have said was O’Donnell McCord.”

Read the article.

“The Am Law 50 firm moved its headquarters to Philadelphia’s Cira Centre in 2005, taking advantage of a tax break program that Pennsylvania offers businesses to move into developments in formerly run-down areas. Since taking up residence in Cira Centre, Dechert’s paid virtually no state or local business taxes in exchange for Dechert’s role in making the area an attractive business destination,” notes Joe Patrice in Above the Law’s Biglaw.

“But the program expired in 2018, so when the Keystone Opportunity Zone program eyed a new tax-free area in Schuylkill Yards, Dechert walked up and asked to move there too.”

“There’s nothing in the law to say companies can’t hop from zone to zone to remain permanently tax-free, and when authorities denied Dechert’s request to continue not paying its taxes, the firm took the government to court.”

Read the article.

Legal cases concerning President Trump, his finances and his separation-of-powers disputes with Congress are arriving at the Supreme Court, and together provide both potential and challenge for the Roberts court in its aspiration to be seen as nonpartisan, reports The Washington Post.

On Dec. 13, the court will consider whether to schedule a full briefing and argument on the president’s request that it overturn a lower-court ruling giving New York prosecutors access to Trump’s tax returns and other financial records.

Authors Robert Barnes and Ann E. Marimow quote Walter Dellinger, who argued for President Bill Clinton before the Supreme Court:

“This will be a special moment for the independence of the judiciary and whether the hyperpartisanship that has infected so much of our culture has also infiltrated the Supreme Court.”

Read the  Post article.

In a matter of days, President Trump will ask the Supreme Court to rule on his bold claim that he is absolutely immune from criminal investigation while he remains in office, writes Adam Liptak for The New York Times.

The new case, concerning an investigation by Manhattan prosecutors into hush-money payments to two women who said they had affairs with Trump, will be the Supreme Court’s first chance to consider the president’s arguments that he is beyond the reach of the justice system.

Liptak explains the Supreme Court’s options: Announce next month whether it will hear the case and to rule by June, or simply deny review, leaving in place the appeals court ruling and effectively requiring Trump’s accountants to turn over his tax returns.

Read the  NY Times article.

Image by William Munoz

Former secretary of state Rex Tillerson is again at the center of the climate change debate, as the former Exxon Mobil CEO prepares to take the witness stand regarding allegations his former company deceived shareholders about the financial risks posed by climate change, reports the Houston Chronicle.

Tillerson is scheduled to make an appearance at the New York Supreme Court Wednesday to answer questions about missing emails and varying carbon pricing schemes amid a growing wave of climate change litigation against the oil industry, according to the Chronicle‘s James Osborne.

The New York attorney general wants to answer the question of whether Exxon defrauded investors when it used one carbon price to estimate the potential taxes or fees the company might have to pay on greenhouse gas emissions from oil drilling projects and another in the economic modeling it presented to investors regarding future oil and gas demand.

Read the Houston Chronicle article.

Hunton Andrews Kurth LLP announced the expansion of its national public finance practice with the addition of Darren C. McHugh. The tax and public finance lawyer joined the firm as a partner in its Austin office.

In a release, the firm said McHugh has tax law experience as it relates to public finance transactions, including governmental, 501(c)(3), housing and healthcare bonds. He also advises clients regarding the structuring process and tax requirements associated with tax-exempt transactions.

The firm said McHugh has advised clients on tax-advantaged bond financings and has experience representing issuers and conduit borrowers in tax controversy matters, including Internal Revenue Service examination, voluntary closing agreement program requests, and administrative appeals.

McHugh received his undergraduate degree from the University of Northern Colorado, a master’s in accountancy from the Metropolitan State University of Denver, and his law degree from the University of Denver Sturm College of Law.

Two powerful Wall Street investment bankers could be on the hook for millions of dollars in back taxes and penalties after one of the world’s most prestigious law firms allegedly botched their pay packages, according to a report in the New York Post.

The Post‘s Kevin Dugan writes: “The two bankers — Michael Kramer and Derron Slonecker — face an IRS crackdown on $10.4 million in compensation after their bank’s law firm, Weil, Gotshal & Manges, screwed up a deadline for routine paperwork, according to sources and a report Weil commissioned on the matter.”

The report says the law firm may have failed to disclose the alleged mistake to their client, investment bank Perella Weinberg Partners, in a timely fashion, according to Dugan.

Read the  NY Post article.

Blank Rome LLP announced that Richard J. Miller Jr. and Sean R. Weissbart have joined the firm as partners, along with additional professional staff, in its Tax, Benefits, and Private Client group.

In a release, the firm said they are based in the firm’s New York office, which relocated last week to 1271 Avenue of the Americas after 40 years in the Chrysler Building. The group joins from one of New York’s oldest law firms, Morris & McVeigh LLP, where Miller previously served as managing partner. Morris & McVeigh, which will wind down, was formed in 1862 under the name of Henry Lewis Morris. Originally, the firm was primarily engaged in managing the real estate interests of the Morris family, which owned large portions of Morrisania, and it also represented prominent New York families. It gradually enlarged its practice through the years, offering comprehensive legal services to individual and corporate clients, both foreign and domestic, and various nonprofit organizations and foundations.

Miller and Weissbart have experience in estate planning services, including probate and estate administration; trust administration; estate and trust litigation; nonprofit matters; matrimonial matters; and domestic and cross-border income, estate, and gift taxation, the firm said.

Maryanne Trump Barry’s quiet retirement earlier this year from a federal appeals court short-circuited a judicial ethics investigation, allowing the president’s older sister to dodge potentially serious consequences such as loss of full retirement benefits, reports Bloomberg Law.

The former Third Circuit judge faced the civil probe into whether she and her siblings, including her brother Donald, benefited from alleged tax schemes linked to her late father, according to Bloomberg’s Melissa Heelan Stanzione. Four complaints of judicial misconduct were filed in October of 2018. At the time, Barry, now 82, was semi-retired and not hearing cases.

“The treatment of her case is not without recent precedent, and raises questions about a loophole in the conduct code for federal judges that allows them to avoid scrutiny by stepping down,” writes Stanzione.

Read the Bloomberg Law article.

Bloomberg Law is reporting that a Northern California tax attorney was sentenced April 1 to three years in federal prison for stealing $1.2 million in refunds fraudulently obtained on behalf of his NFL player client.

Hiram M. Martin was charged with falsifying returns for Antrel Rolle, a former Pro Bowl NFL safety who played for the Arizona Cardinals, New York Giants, and Chicago Bears. Martin reportedly filed tax documents in Rolle’s name without his permission, and forged his client’s signature, writes Bloomberg’s David McAfee.

Prosecutors said Martin also worked to keep the IRS from contacting Rolle and to keep Rolle from contacting the IRS when a news story ran about the athlete’s tax liabilities.

Read the Bloomberg Law article.

REIT tax lawyer Cristina Arumi is rejoining Hogan Lovells, the firm announced in a release.

She will be head of the firm’s U.S. REIT tax practice and will work alongside David Bonser, who heads up the REIT practice. Arumi joins from Ernst & Young, where she worked in the REIT and pass-through group from the national tax office.

“Cristina is a superstar – she is highly regarded by clients and colleagues for her lightning-sharp tax acumen, creative solutions, and strong client relationship skills,” said Prentiss Feagles, a Hogan Lovells partner who has led the REIT Tax practice. “These qualities, together with her strong leadership skills, make Cristina perfect to work with David Bonser and others in building one of the strongest REIT practices in the United States.”

Before departing for Ernst & Young in 2013, Arumi spent 17 years with Hogan Lovells, focusing her practice on the tax aspects of capital markets and M&A transactions, including REITs, real estate funds and joint ventures as well as the tax aspects of foreign investment in U.S. real estate. As a principal in Ernst & Young’s national tax department’s pass-throughs and real estate group, Arumi led real estate transactions working extensively with REITs, including many clients of Hogan Lovells, sovereign wealth funds and other major investors in U.S. real estate, the firm said.

“Hogan Lovells’ REIT practice is one of the best in the country, and I am excited to rejoin the team,” Arumi said. “I’ve maintained strong relationships with many of my friends and colleagues at Hogan Lovells, and I’m looking forward to the opportunity to work with David and the other partners to build on the continued success of the REIT practice.”

Arumi received her B.A. from the University of North Carolina, her J.D. from Duke University School of Law, and her LL.M in tax from the Georgetown University Law Center.

Image by Norsk Elbilforening

Carlos Ghosn will finally see the inside of a Japanese court room next week, almost two months after his arrest on financial crimes, reports Bloomberg.

Ghosn’s lawyer said his client will attend a hearing of the Tokyo district court on Jan. 8 in an effort to obtain an explanation on why the former Nissan Motor Co. chairman — who was taken into custody Nov. 19, and has had his detention extended repeatedly — remains in jail.

Bloomberg’s Kae Inoue reports: “While Ghosn has been indicted by Japanese prosecutors on allegations of under-reporting his compensation, the length of his detention and the lack of clarity provided on the case has drawn criticism.”

Read the Bloomberg article.

The Texas Supreme Court issued four opinions addressing the taxation of compressors used to deliver natural gas into pipelines, according to a post on Gray Reed & McGraw’s Energy & the Law blog.

Charles Sartain and Isreal Miller introduce a discussion of the rulings:

“Local taxing authorities frequently look to out-of-towners to bear what the locals consider the outsiders’ fair share of the burdens of increased oil and gas activity. The counties are often small and rural. (See the Dimmit County road tax).You can’t blame them, but  Reeves County (county seat: Pecos, 2010 pop. 13,783), Loving (county seat: Mentone, 2010 pop. 1,340), and Ward (county seat: Monahans, 2010 pop. 10,658) have been reminded by the big guys and gals in Austin that these efforts are not likely to succeed. It didn’t work for Huey Long and it isn’t working well now.”

Read the article.

Arent Fox LLP announced the expansion of its Tax practice in Washington, DC with the addition of partner Jeffrey Tate. Tate’s practice focuses on domestic and international transactional work, and includes counseling on mergers and acquisitions, real estate investments, joint ventures, securitizations, private equity and hedge fund investments and structuring, financial products, pass-through entities, FATCA compliance, and capital markets transactions.

Tate joins Arent Fox from Shearman & Sterling LLP, where he worked with corporate, financial institution, investment fund, and sovereign clients. Tate is fluent in Portuguese and he was principally responsible for overseeing all Latin American capital markets tax matters at his prior firm. He also has experience advising Latin American and other clients on fund formation, mergers and acquisitions and inbound investment matters.

The firm said Tate’s recent work includes advising sovereign wealth funds on U.S. real estate investment and development matters and fund investments; advising a Brazilian digital payments processer on its NYSE-listed initial public offering; and advising various private equity, real estate, hedge, and other investment funds on structuring and tax matters and portfolio acquisitions.

Miller & Chevalier Chartered today announced that Jorge E. Castro, who previously served on the staff of senior Democratic members of both the Senate Committee on Finance and the House Committee on Ways and Means and as Counselor to the Commissioner of the Internal Revenue Service (IRS), joined the firm as a member in the Tax Department.

Castro joins Miller & Chevalier from Castro Strategies, LLC, a Washington, DC, tax consulting firm he founded to counsel clients on a wide array of policy and regulatory issues.

“Miller & Chevalier is best-in-class when it comes to providing strategic counsel and technical tax advice, and I am excited to continue my practice here,” Castro said. “The firm’s long tax history and reputation, robust platform, and team of savvy tax lawyers will allow me to offer more resources and services to my clients.”

The firm said Castro gained legislative experience serving as the primary tax policy advisor to senior Democratic members of both Congressional tax-writing committees. He served as Senior Counsel and Lead Economic Policy Advisor to Senator John D. Rockefeller IV (D-WV), a senior member of the Senate Committee on Finance. He also served as Tax and Trade Counsel to the late Representative Stephanie Tubbs Jones (D-OH), a senior member of the House Committee on Ways and Means. In 2010, Tax Notes magazine named Jorge as one of the top “Congressional Staffers Shaping Tax Policy.”

During his tenure at the IRS, Castro directly advised the Commissioner on tax reform initiatives and legislative proposals, and worked closely with senior IRS and U.S. Department of the Treasury (Treasury) officials to advance the agency’s domestic and international objectives. He also collaborated with the Treasury on a variety of priority guidance projects, including the implementation of the Foreign Account Tax Compliance Act (FATCA).

“Jorge’s experience working directly with the Commissioner of the IRS will be an invaluable resource to our global clients across the wide array of regulatory, enforcement, administration, and compliance issues they are facing with the agency,” said Lawrence B. Gibbs, Senior Counsel in Miller & Chevalier’s Tax Department who served as Commissioner of the IRS from 1986 to 1989.

“Jorge brings a deep understanding of government decision-making processes and uses that knowledge in coordination with his technical tax expertise to help clients resolve complex matters in the most efficient, effective ways possible,” said George A. Hani, Chair of Miller & Chevalier’s Tax Department. “Given his unique combination of legislative and tax administration experience, he has the proven ability to work a bill completely through the legislative process, and then guide clients through the administrative guidance process.”

Castro represents the second recent significant hire Miller & Chevalier has made to its growing government relations practice, following the arrival of Loren C. Ponds, former Tax Counsel to the House Committee on Ways and Means under Chairman Kevin Brady (R-TX), in late October.

“Jorge is well regarded in the tax policy community, particularly by members of Congress, senior Treasury and IRS officials, and their staffs,” said Marc J. Gerson, Chair of Miller & Chevalier’s Executive Committee. “Having worked together on Capitol Hill, I am particularly pleased to welcome him to the firm.”

Castro earned a J.D. from the University of Wisconsin Law School and a B.A. from the George Washington University. He is currently an adjunct professor at the Catholic University Columbus School of Law, where he teaches a course in the Law and Public Policy Program.

Corporate counsel report a decrease in the number of lawsuits against their companies over the last year, but they face more regulatory proceedings and arbitrations in navigating increased cyber risk, data protection and tax issues.

Norton Rose Fulbright’s 2018 Litigation Trends Annual Survey polled 365 senior corporate counsel representing US-based organizations on disputes-related issues and concerns.

Two thirds of respondents report feeling more exposed in 2018 to cybersecurity and data protection disputes. The survey also found that the growing international nature of many business operations has caused a spike in conflicts related to countries’ differing discovery and data protection laws and regulations.

See the survey results.

Miller & Chevalier Chartered announced that Loren C. Ponds will join the firm as a member in the Tax Department, effective Oct. 29, 2018. Previously, Ponds served as tax counsel to the U.S. House of Representatives Committee on Ways and Means, where she was instrumental in the development of the international tax provisions included in the Tax Cuts and Jobs Act of 2017 (TCJA).

“Miller & Chevalier is known for tax excellence,” Ponds said. “I was drawn to the firm’s outstanding reputation and talented practitioners, who are able to provide specialized tax guidance across varied issues, an important factor given my interdisciplinary practice.”

Prior to her role with the Committee on Ways and Means, Ponds worked in Ernst & Young LLP’s National Tax Department, with a focus on transfer pricing. She advised multinational companies on international tax planning projects, including intellectual property planning, supply chain optimization, and restructuring projects. In addition, Ponds regularly counseled companies on a wide variety of controversy matters, including advance pricing agreements, mutual agreement procedure cases, and Internal Revenue Service audit defense projects. She also spent two years working directly with the leader of Ernst & Young’s global transfer pricing practice in Germany.

At Miller & Chevalier, Ponds will focus her practice on the implementation of the TCJA and other tax policy matters. She will also work with clients on transfer pricing and broader international tax issues.

“Loren’s first-hand experience at the Committee on Ways and Means, especially the critical role she played in drafting the international tax provisions of the TCJA, makes her one of the most well-equipped lawyers to advise clients navigating the new legislation,” said George A. Hani, Chair of Miller & Chevalier’s Tax Department. “Her counsel is grounded in deep knowledge of the underlying policies and her perspective from inside the process. She offers unique, detailed insight that few in the field can provide.”

“From executing complicated supply-chain restructurings, to guiding companies through transfer pricing dispute resolution, to drafting international tax legislation, Loren has gained vital experience and will be a tremendous resource to our clients. Her legislative experience, combined with her technical expertise, makes her uniquely situated to assist our clients as they seek to implement the TCJA, as well as pursue related technical corrections and administrative guidance,” said Marc J. Gerson, Chair of Miller & Chevalier’s Executive Committee. “We are thrilled to welcome her to the firm.”

Ponds earned an LL.M. in Taxation from the Georgetown University Law Center, a J.D. from the American University Washington College of Law, and an A.B. from Davidson College.

Even if the $289 verdict against Monsanto last week survives the appellate process, the plaintiff will see much of his award go the IRS because of  taxes imposed by the a new tax law involving legal fees, according to tax lawyer Robert W. Wood, a Forbes contributor.

In his article, Wood explains: “Under President Trump’s tax bill passed in late 2017, there is a new tax on litigation settlements: no deduction for legal fees. Amazingly, many legal fees simply can’t be deducted. That means [plaintiff Dewayne] Johnson must pay tax even on monies his attorney collects. That is so even though the attorney must also pay tax on the same money.”

Johnson’s suit claimed Monsanto’s Roundup weedkiller caused his cancer.

Read the Forbes article.