IRS Concedes 60% of Audit Liability

Attorney Robert B. Teuber successfully negotiated a client’s case to resolve the tax, penalties and interest after the IRS took the position that a corporation could not deduct certain expenses which the IRS contended were personal expenses of the corporation’s shareholders. To make matter worse, the IRS treated the payment of those expenses as constructive dividends to the shareholders, resulting in hundreds of thousands of dollars of tax, interest and penalties for the corporation and the shareholders. After filing suit in the United States Tax Court, Mr. Teuber negotiated a settlement that was 60% less than the amount asserted by the IRS, including a waiver of all penalties. The resolution preserved valuable deductions that were essential to the operation of the client’s business.