Tax Disputes & Litigation

Our team of skilled attorneys provides experienced, effective representation in preparation for and throughout the tax controversy process. We offer full‑service representation on a multistate basis, and at all stages of the tax controversy process:

• Agency examination and audit
• Agency administrative appeals and hearings
• Tax tribunal hearings and trials
• Trial court
• Appellate court
• Tax process evaluation and automation
• Taxability research and determinations
• Tax refund review and claim preparation
• Tax exposure analysis and mitigation (i.e., voluntary disclosure agreements)

Frequently, our early involvement at the examination or protest stages permits us to help the taxpayer marshal the critical underlying facts and to define the arguments most likely to prevail. In addition, we bring the benefits of attorney‑client confidentiality and privilege to the controversy.

When litigation is advisable or necessary, we draw upon our trial experience to choose the appropriate court, develop the case through formal and informal discovery, and aggressively advocate the taxpayer’s position before the judge or jury. Our tax litigators have extensive experience in federal district courts, the U.S. Tax Court, the Minnesota Tax Court, the Wisconsin Tax Appeals Commission, State District Courts, the Eighth Circuit Court of Appeals, the Minnesota Supreme Court, the North Dakota Supreme Court, and the Minnesota Court of Appeals. We know tax law, but more importantly, we have the experienced advocate’s ability to develop and present the most persuasive arguments and themes.

Throughout our representation, we strive to obtain fair and thoughtful review of the dispute to achieve the best possible result for our client at the earliest opportunity.

We represent publicly owned and privately held corporations, partnerships, cooperatives, individuals and fiduciaries in tax disputes and litigation of all types against State and Federal taxing authorities. Our clients are well-recognized national, regional and local businesses. We regularly negotiate and litigate tax disputes involving corporate and personal income taxes, sales and use taxes, excise taxes, estate and gift taxes, employment taxes, property taxes, and healthcare provider taxes.

Sales/Use Tax

• Phone Recovery Services, LLC v. Qwest Corp et al.: 919 N.W.2d 315 (Minn. 2018), holding that Minnesota’s qui tam statute prohibits qui tam actions relating to fees and charges for 911 services because such fees and charges are “taxes”.
• Connexus Energy, et al. v. Commissioner of Revenue: 868 N.W.2d 234 (Minn. 2015), prevailing on the argument that the two-year statute of limitations applies to refunds paid by the Commissioner to taxpayers and later determined to have been paid in error.
• SAP Retail, Inc. v. Commissioner of Revenue: Docket No. 8345-R (Minn. T.C. Sep. 19, 2013), represented an intervenor in SAP Retail’s appeal involving taxability of software implementation services, which the tax court agreed were not part of the “sales price” of software.
• Northern X-Ray Company v. Commissioner of Revenue: Docket No. 7945-R (Minn. T.C. Dec. 8, 2009), holding that material credits received from manufacturers are not part of the gross receipts from the retail sales of x-ray film.
• Ticketmaster, LLC v. Commissioner of Revenue: Docket No. 7866-R (Minn. T. C. Mar. 6, 2008), convinced the tax court that Ticketmaster’s convenience charges and processing fees were not subject to the Minneapolis Entertainment Tax.
• Sprint Spectrum LP, et al. v. Commissioner of Revenue: 676 N.W.2d 656 (Minn. 2004). Minn. Sales/Use Tax . . . telecommunications equipment, which produces telecommunication signals that have physical properties, is exempt from sales tax as capital equipment because it is used to manufacture tangible personal property.
• Bailey Nurseries v. Commissioner of Revenue: 2002 WL 1077273 (Minn. Tax), Docket No. 7255-R (May 16, 2002), Minn. Sales/Use Tax . . . machinery and equipment for preparing soil, cultivating, harvesting and irrigating purposes, purchased by the taxpayer for use in its wholesale shrub nursery business were entitled to “farm machinery” tax rate.
• St. Paul Abrasives, Inc., et al. v. Commissioner of Revenue: 1998 WL 726457 (Minn. Tax), Docket Nos. 6814-6817 (October 12, 1998), Minn. Sales Tax . . . taxpayers, who ran an abrasives supply business, not liable for sales/use tax on purchase of incentive items they provided to customers in a trading stamp-like redemption program, since the purchases were for resale in other states where customers redeemed their incentive points.
• Northern States Power Company and United Power Association v. Commissioner of Revenue: 571 N.W. 2d 573 (Minn. 1997), Minnesota sales tax exemption for capital equipment held to apply to electrical transformers located outside the power plant.
• Dahlberg Hearing Systems, Inc. v. Commissioner of Revenue: 546 N.W.2d 739 (Minn. 1996), Minn. Use Tax . . . computers destined for business use in other states not subject to Minnesota use tax simply because software was loaded at company’s Minnesota headquarters.
• Northern X-Ray Company v. Tax Commissioner: 542 N.W.2d 733 (North Dakota 1996), defense of North Dakota contractor’s use tax claims.
• Copy Duplicating Products Inc. v. Commissioner of Revenue: Minn. Tax Court, Docket No. 6378 (July 10, 1995), Minn. Sales Tax . . . copiers purchased by copier leasing company free of sales tax as sales for resale continued to be sold for resale when they were converted to coin-operated use because the “license to use” sold by the company to its coin-operation customers was also a resale.
• Burlington Northern Railroad Company v. Commissioner: 509 N.W. 2d 551 (Minn. 1993), Minnesota sales tax attempted to be imposed on railroad rolling stock was held invalid under the Railroad Revitalization and Regulatory Reform Act of 1976.

Minnesota Corporate Income Tax

• General Mills, Inc. v. Commissioner of Revenue: 931 N.W.2d 791 (Minn. 2019), finding that to calculate the Minnesota research and development credit (a) the federal minimum base amount was part of the calculation and (b) that federal gross receipts should be used to determine the denominator of the fixed-base percentage of the base amount.
• Alaska Airlines, Inc. v. Commissioner of Revenue: No. 9433-R (Minn. T.C. Mar. 16, 2022), holding that the Minnesota Minimum Fee’s inclusion of Minnesota sales or receipts for airlines is preempted by the federal Anti-Head Tax Act, 49 U.S.C. § 40116, which prohibits states from taxing the gross receipts of airlines.
• Amoco Corporation and Affiliates v. Commissioner of Revenue: 658 N.W.2d 859 (Minn. 2003), Minn. Corporate Income Tax . . . exploration and production operations of integrated oil company held not unitary with refining and marketing operations, under statutory definition of unitary business.
• Green Giant v. Commissioner of Revenue: 534 N.W.2d 710 (Minn. 1995), Minn. Corporate Income Tax . . . income assigned to corporation jointly owned by Green Giant and Alaskan Native Corporation should be excluded from the tax computation.

Minnesota Individual Income Tax

• Zauhar v. Commissioner of Revenue: No. 9139-R (Minn. T.C. Aug. 19, 2020), holding that the taxpayer was a domiciliary of Florida and not Minnesota even though his wife remained a Minnesota resident.
• Chapman v. Commissioner: 651 N.W. 2d 825 (Minn. 2002), Minnesota alternative minimum tax provision limiting charitable contribution deductions solely to Minnesota charities declared unconstitutional as discriminatory to interstate commerce.

Federal Tax

• Buckrey v. Commissioner: T.C. Memo 2017-138, complex transferee liability case involving a closely owned corporation’s unpaid taxes and holding that the former shareholders’ liability as transferees was limited by Minnesota law.
• Astleford v. Commissioner: T.C. Memo 2008-12, gift tax case involving valuation of gifts of interests in a family limited partnership; three tiers of discounts approved by court.
• Xcel Energy Inc. v. United States: (D. Minn.), tax treatment of leveraged company-owned life insurance plan.
• O’Shaughnessy v. Commissioner: 332 F.2d 1125 (8th Cir. 2003), multi-issue litigation involving inter alia, depreciation, abandonment loss, and change of method of accounting issues for glass manufacturing company.
• Northern States Power Company v. United States: 151 F.3d 876 (8th Cir. 1998), multi-issue income tax case involving inter alia, placed in service date for nuclear fuel assemblies, and change of method of accounting questions.
• Sprint Communications, Ltd v. Comm’r: 578 N.W.2d 752 (Minn. 1998), dispute over whether federal telecommunications excise tax that taxpayer collects from its customers should be included in “sales price” and taxed by the Minnesota sales tax.
• Northern States Power Company v. United States: 73 F.3d 764 (8th Cir. 1996), multi-issue income tax case, including an “interest netting” dispute.
• O’Hagan v. United States: 95-1 USTC 50,082, aff’d, 96-1 USTC 50, 311 (8th Cir. 1996), injunction action against IRS to restrain levy on homestead.
• O’Shaughnessy v. United States: 517 N.W. 2d 574 (Minn. 1994), federal tax lien held unenforceable against assets of discretionary trust.
• Landmark v. United States: 25 Cl. Ct. 100 (1992), first case in the country to hold that cooperatives are not subject to the deduction limitations of I.R.C. § 277.
• Security Bank Minnesota v. Commissioner: 98 T.C. 33 (1992), aff’d, 994 N.W. 2d 432 (8th Cir. 1993), tax case affecting 40 Midwestern banks, which held that small cash-basis banks were not subject to the interest accrual rules under I.R.C. § 1281.

Property Tax

• Perham Hospital District v. County of Otter Tail: 969 N.W.2d 366 (Minn. 2022), affirming the Minnesota Tax Court’s opinion that medical clinics owned and operated by Perham Hospital District were exempt from property tax because they were operated to improve and run Perham Hospital—they helped attract physicians and patients, improved the hospital’s overall operations and service delivery, increased patient follow-up, provided physical space for use by other hospital departments.
• Cooperative Power Association v. Hennepin County: Minn. Tax Court, Docket Nos. 20070, 22041 and 24007 (March 20, 1996), Minn. Property Tax . . . property tax valuation on headquarters of electric power cooperative reduced approx. 32 percent.
• Department Stores and Shopping Centers: We are the leading representative of department stores and major shopping center owners, developers and managers.
• Hotels and Motels: We have cutting-edge experience with the complexities of hotel and motel properties as those issues continue to evolve in national circles, and our clients include a number of national flags.
• Office Buildings: We have unsurpassed experience in the representation of office properties in both the Minneapolis and Saint Paul central business districts and in the suburban office markets.
• Environmentally Contaminated Properties: We are nationally recognized for our knowledge in the negotiation and trial of cases where the market value of the subject property is adversely affected by petroleum derivatives, asbestos, PCBs, landfills, and other forms of contaminants.
• Medical Office Buildings: We have developed considerable expertise in the valuation of medical office buildings, both in the Twin Cities Metropolitan Area and in Greater Minnesota.
• Restaurants: We have extensive experience with the difficult issues in valuing restaurant properties.
• Industrial and Manufacturing Properties: We have considerable experience with large and not-so-large industrial properties, including manufacturing, distribution and headquarters facilities.
• Apartment Buildings: We represent regional and local owners and managers of apartment complexes and properties of all types.
• Office Warehouse and Office Showroom Facilities: We regularly represent the owners and managers of office warehouse and office showroom facilities.
• Bank Properties: We have successfully represented major banks in trial and in negotiations involving branch bank and other bank properties.

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