Taxation

The attorneys of Stites & Harbison assist clients with tax planning and litigation on the federal, state and local levels. The firm's tax practitioners include a former United States Tax Court law clerk and a former attorney for the Internal Revenue Service's Office of Chief Counsel (Tax Court). Several members of the tax practice group have master-of-law degrees in taxation. The firm is the Kentucky member of the American Property Tax Counsel ("APTC"), a national affiliation of law firms with a property tax practice. Membership in APTC is limited to the preeminent property tax law firm in each state.

Federal Tax

The firm helps clients structure corporate reorganizations, redemption transactions, spinoffs, splitoffs, liquidations and tax free exchanges. It also regularly represents clients before the Internal Revenue Service Appeals Office, the United States Tax Court, the U.S. District Courts and federal appellate courts on federal income tax matters. Notable successes have included the defense of a Chicago Board of Trade option trader in what is believed to be the largest case involving the tax treatment afforded to tax straddles; rulings obtained for a billion dollar charitable organization; and the successful negotiation of multi-million dollar tax refunds in connection with a major insurance company insolvency.

State Taxation

As states continue with the most significant budget deficits in recent history, state and local taxing authorities continue to aggressively pursue additional revenue for their jurisdictions through a variety of mechanisms ranging from overly broad interpretations of state statutes and local ordinances to aggressive, unyielding positions in litigation. Our SALT attorneys are the "go-to" people for SALT controversies in Kentucky. With tax experience, in-depth litigation experience and a well-known presence in Frankfort, Kentucky—the state's capital—we are uniquely positioned to achieve success for our clients. We represent a number of large multi-state, multi-national corporations in complex SALT matters, and routinely and successfully represent many other businesses and individuals as well. We regularly appear before the Kentucky Department of Revenue, Board of Tax Appeals and all levels of the courts regarding state income, sales and use, property, severance and other taxes

We recently filed a petition for writ of certiorari with the United States Supreme Court seeking reversal of a decision of the Kentucky Supreme Court upholding legislation that retroactively revokes the corporation income tax refund claims owed to approximately twenty-nine (29) corporations doing business in Kentucky. See Johnson Controls, Inc. et al. v. Miller, United States Supreme Court, Case No. 09-981. The total refund claims, including interest, are estimated to exceed $200 million.

Recent engagements

• Assisted client in the natural gas industry in identifying and settling Kentucky tax liabilities (income, sales and use, property, severance and other) for several related entities engaged in complex, multi-million dollar transactions
• Worked with sales tax auditors to achieve $1M+ savings for a manufacturing client on sales and use tax audits
• Identified tax incentives available for $2B coal gasification facility
• Represented numerous clients in their appeal of tangible personal and real property tax assessments resulting in significant savings for clients

Recent presentations and publications

• “Broken Promises - The Decision of the Kentucky Supreme Court in Miller v. Johnson Controls,” LexisNexis Tax Law Center, November 16, 2009
• “Miller v. Johnson Controls, Inc. and the Dangers of Retroactive Tax Legislation,” IPT Income Tax Report, November 2009 (co-authored with Jeff Mullins of American Airlines).
• “DirecTV v. Treesh”, “Kentucky Protest and Appeals Process,” and “Overhaul of Kentucky’s Economic Incentives Legislation,” LexisNexis Tax Law Center, Fall 2009
• “Navigating Roadblocks to State Tax Refunds: Managing Expectations and Cutting a Deal,” Council on State Taxation (“COST”) 40th Annual Meeting, Las Vegas, NV, October 2009
• “Income Tax for Sales Tax Professionals,” Institute of Professionals in Taxation, Sales Tax Symposium, Miami, FL, October 2009
• “Refunds for Court-Resolved Issues and Retroactive Statutes,” IPT Income Tax Report, April 2009.

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"Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes." —J. Learned Hand, Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934), citing United States v. Isham, 84 U.S. (17 Wall.) 496, 506, 21 L.Ed 728 (1873).