Case Study: Favorable Reversal

A successful entrepreneur retained us to appeal a ruling by the Tax Court disallowing the client’s use of millions of dollars of tax-loss carryforwards, which resulted from losses incurred by a partnership in which the client was a partner.  In a case of first impression, we demonstrated that the IRS had not followed the procedures required by statute to disallow partnership losses, and that the government accordingly had lost the right to challenge the deductions.  The federal court of appeals reversed the Tax Court’s ruling, and our client avoided having to pay millions of dollars in additional taxes.