Does taking the IRS to court hurt your chances of settlement?

Whether you own a small business, are reporting individual income taxes, or have recently received an inheritance, chances are that you will have to file a return with the Internal Revenue Service. Each of those contexts, unfortunately, presents the opportunity for a potential IRS dispute.

In a recent example, the estate of the late owner of the Minnesota Twins, Carl Pohlad, recently found itself in hot water with the IRS. Specifically, the IRS claimed that the estate owed over $250 million in federal estate tax. The IRS calculation was reportedly based on its calculation of Pohlad’s ownership interest in the Twins at the time of his passing. However, the beneficiaries of the Pohlad estate disagreed with that valuation and proceeded to litigation. 

Notably, the lawsuit, filed in 2013, only recently reached a settlement. In exchange for a payment of $36 million, the IRS agreed to the satisfaction of all tax obligations of the estate, including interest that may have accrued since 2013.

As an attorney that has helped many clients with tax controversies, I know that the prospect of a lawsuit against the IRS can be intimidating. For such clients, I provide information about the spectrum of appeal options that may be available to them, including alternative dispute resolution and administrative appeals with the IRS. In fact, the IRS’ website claims that the agency’s Office of Appeals helps more than 100,000 taxpayers every year to resolve their tax disputes outside of Tax Court. The IRS also offers mediation services. 

However, I would caution against utilizing such administrative routes without the representation of a tax attorney. Individuals may have questions about whether recommendations by the Office of Appeals or a mediator are binding upon them, or even fair, for that matter. An attorney can help answer those questions.

Source: Bring Me the News, “Pohlad estate settles with IRS over disputed $250M tax claim,” Shayus McLaughlin, Aug. 20, 2015

No Comments

Leave a comment
Comment Information
  • ABA | American Bar Association
  • AV Preeminent | Peer Rated for Highest level of Professional Excellence | 2018
  • Virginia State Bar | 1938
  • Super lawyer | 2018
  • DC Bar
  • American Bar Academy of Attorney - CPAs | The power of the dual view
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Map & Directions

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Annapolis Office
888 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Map & Directions

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Map & Directions

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Map & Directions