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U.S. Tax Controversy & Litigation

Vinson & Elkins’ Tax Controversy & Litigation lawyers represent private and publicly-held corporations, partnerships, and high-net-worth individuals in all phases of U.S. federal income tax controversies, from audit to IRS Appeals to litigation. We believe effective advocacy in tax controversies requires a thorough understanding of a taxpayer’s business and benefits from a close working relationship with each client. V&E serves clients in multiple industries, with particular depth in energy, including master limited partnerships, private equity and hedge funds, high technology, manufacturing, and medical devices. We have handled many novel issues and litigated many “issues of first impression.”  Our tax controversy lawyers have extensive experience in matters involving TEFRA partnerships, transfer pricing, “inbound” and “outbound” international tax, R&D credits, valuation, and executive compensation.

Tax Controversy

Our approach to handling audits and appeals before the IRS is to help clients achieve the desired resolution of their tax issues as efficiently as possible while preserving a constructive relationship with the government. Using our deep knowledge of and experience with applicable procedures, we help our clients navigate the available IRS administrative processes to reach an acceptable resolution. We work with our clients’ professionals and other experts, as appropriate, to present the strongest possible case in order to maximize the opportunity to settle. But significant issues cannot always be settled in the administrative process, so we are mindful of developing a strategy that will be effective if litigation becomes necessary.

Tax Litigation

We have significant experience trying cases in the U.S. Tax Court, the U.S. Court of Federal Claims, and the federal district courts, and in appealing cases to the federal courts of appeal. Our tax controversy lawyers take the lead in both trying and appealing tax cases. Depending on the issue in dispute, however, we believe our clients often are best served when our teams include V&E lawyers from other relevant practice areas, such as Intellectual Property, Complex Commercial Litigation, and Appellate.

Transfer Pricing

We focus on transfer pricing disputes involving intellectual property, including cost-sharing arrangements, buy-in transactions, licenses, and technical services. We regularly work with consulting and testifying economic and financial experts from the major accounting and litigation support firms, as well as from boutique firms. Engaging and effectively working with these professionals, especially at an early stage, helps us develop and implement the most effective strategy for each transfer pricing dispute.

Controversy Planning

Consistent with the adage that an ounce of prevention is worth a pound of cure, careful planning on the front end can be the most effective means of addressing a potential tax controversy. To this end, our team is skilled in assisting clients by identifying and addressing potential tax issues before they become problematic. We believe we can add the most value when we are engaged early to advise on transactions with potential audit exposure.

Experience Highlights

  • BMC Software in trial before the U.S. Tax Court, and on appeal before the Fifth Circuit Court of Appeals, in litigation concerning dividend repatriation under section 965

  • Trinity Industries in a trial and Fifth Circuit appeal involving the eligibility of prototype vessels for R&D credits and the interpretation of the “consistency rule” for qualified research expenditures

  • An offshore drilling contractor in a transfer pricing dispute with IRS regarding transfer of intangibles; resolved with a full concession by IRS Appeals

  • A foreign energy company relating to tax treaty issues arising from transactions with U.S. affiliates

  • Obtained a full concession from IRS Appeals on a “hobby loss” issue under Code Section 183

  • A partnership in a TEFRA proceeding involving multiple hearings and trial in Tax Court on issues, including jurisdiction, economic substance, and privilege

  • A private equity fund and fund manager in a Tax Court dispute regarding withholding tax issues and treatment of hedging transactions

  • A real estate investment trust in a dispute regarding economic substance of recapitalization of foreign subsidiary; resolved with a full concession by IRS Appeals

  • An oilfield services provider in a research and experimentation credit dispute; settled at IRS Appeals

  • A corporation in a valuation dispute regarding Alaskan onshore and offshore oil and gas properties; settled at IRS Appeals

  • Large, publicly traded, international energy company in administrative appeals proceedings with IRS

  • Publicly traded grocery company in administrative appeals proceedings with IRS

  • Large international trading firm in IRS administrative appeals matters and non-tax litigation involving U.S. tax matters