TAXLITIGATOR – Tax Controversy (Civil & Criminal) Report

We are pleased to announce that Sebastian Voth and Philipp Behrendt of our firm are participating in the California Lawyers Association – Taxation Section DC Delegation on May 5-7, 2025.

For over 30 years, the Taxation Section has annually selected a delegation to present the ideas and proposals of California tax lawyers to officials in Washington, D.C. This opportunity allows tax practitioners to present significant issues to key tax officials and staff members from various government offices.

This year, Hochman Salkin Toscher Perez P.C. presented a paper that proposes a legislative amendment to Internal Revenue Code § 6501(c)(1) to protect innocent taxpayers from an unlimited statute of limitations on tax assessments based on the fraudulent intent of a third party, such as a taxpayer’s return preparer. The current Tax Court interpretation allows the statute of limitations to remain open indefinitely when a fraudulent return with intent to evade tax is filed, regardless of whether the taxpayer committed the fraud. The proposal suggests either restricting the fraud exception to cases where the taxpayer intended to evade tax, or alternatively, imposing a six-year limitations cap in cases involving third-party fraud to balance taxpayer rights with IRS enforcement needs.

Link to DC Delegation Paper

Sebastian Voth is a Principal at Hochman Salkin Toscher Perez P.C., specializing in tax investigations, litigation and appeals, and complex tax matters. Prior to entering private practice, Mr. Voth served for 15 years at the Internal Revenue Service including most recently as a Special Trial Attorney with the IRS Office of Chief Counsel’s Strategic Litigation Division leading trial teams in all phases of litigation before the Tax Court. During his tenure with the IRS, Mr. Voth served on the leadership team of the nationwide IRS Counsel mentoring program and mentored numerous IRS attorneys. He is the recipient of two Lucite Awards for significant Tax Court opinions and received a 2024 Special Act Award (Strategic Litigation), the 2023 Nationwide Innovator of the Year (LB&I), the 2022 Nationwide Special Trial Attorney of the Year (SB/SE), the 2017 U.S. Department of the Treasury Outstanding Litigator and the 2017 Nationwide Attorney of the Year (SB/SE). Serving as a Special Trial Attorney, Mr. Voth handled some of the IRS’s most significant and complex litigation matters.

For more information, please contact Sebastian Voth at voth@taxlitigator.com.

Philipp Behrendt is an Associate at Hochman Salkin Toscher Perez P.C., licensed in California as well as in Germany and assists in advising clients in civil and criminal tax controversies as well as international money laundering investigations stemming from tax avoidance structures. He also focuses on the technical aspects involved in advising voluntary disclosures in connection with DeFis, NFTs, and other crypto assets. Philipp is a Liaison to the Young Lawyer Committee for the ABA Tax Section’s Civil and Criminal Tax Penalties Committee and served on the Beverly Hills Bar Association’s Barristers Board of Governors from 2022 to 2023. Philipp is the Chair of the Beverly Hills Bar Association’s Tax Section, a Liaison.

For more information, please contact Philipp Behrendt at behrendt@taxlitigator.com

We are pleased to announce that Melissa Briggs along with Gary Slavett (Holtz, Slavett & Drabkin, APLC) will be speaking at the upcoming Beverly Hills Bar Association Refund Litigation – Where District Court Differs from Tax Court webinar, Tuesday, May 6, 2025, 12:00 p.m. – 1:30 p.m. (PST).

This program focuses on key procedural and strategic differences between refund litigation in U.S. District Court and proceedings in U.S. Tax Court. Panelists will discuss practical considerations for choosing the appropriate forum. Using District Court case pleadings as examples, the panelists will discuss the full payment rule and its exceptions, administrative claims for refund, and each of the stages of District Court refund litigation. The presentation will provide real-world practice considerations based on the Federal Rules of Civil Procedure and district court practice throughout the lifecycle of a refund case, including settlement. The panelists will also highlight hot topics in refund litigation.

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For more information, please contact Melissa Briggs at briggs@taxlitigator.com

This article primarily delves into the nuances and lessons learned from the four precedential opinions issued by California’s Office of Tax Appeals (OTA) with respect to the taxation of residents. It also serves as a reminder of the complexity of California’s residency issues and the value of consulting a qualified tax attorney in matters that could result in disputes before OTA.

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For more information, please contact Sebastian Voth at voth@taxlitigator.com

On March 21, 2025, the Supreme Court handed down a unanimous decision in Thompson v. United States, 604 U.S. ___, a case interpreting 18 USC §1014, making false statements for purposes of influencing certain financial institutions. The defendant in the case is Patrick Thompson. The Court’s opinion does not talk about who Thompson is. He was a Chicago alderman from Bridgeport, the South Side home turf of Mayor Richard J. Daley and his son, Mayor Richard M. Daley. Thompson’s middle name is Daley, and he is the grandson of the original Mayor Daley and the nephew of the second Mayor Daley.

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For more information, please contact Robert Horwitz at horwitz@taxlitigator.com.

Attorneys from our firm have written extensively about foreign bank account reporting (FBAR) penalties.[1] Fifteen years ago, Steven Toscher and Barbara Lubin raised the specter that willful FBAR penalties could violate the Eighth Amendment’s Excessive Fines Clause in the article When Penalties Are Excessive—The Excessive Fines Clause as a Limitation on the Imposition of the Willful FBAR Penalty in the Journal of Tax Practice & Procedure, December 2009–January 2010. Since then, our firm attorneys have updated their scholarship as litigants invoked the Eighth Amendment and courts began to grapple with the issue. See Steven Toscher and Michel R. Stein, The Eighth Amendment Limits on FBAR Penalties—Common Sense Limitations Becomes a Legal Reality, J. Tax Practice & Procedure, June–July 2018. This blog post does not seek to comprehensively cover the Excessive Fines Clause landscape as those articles did. Rather, this blog post seeks to supplement that scholarship and provide a snapshot update of appellate caselaw as of April 2025. 

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For more information, please contact Melissa Briggs at briggs@taxlitigator.com

We are pleased to announce that Jonathan Kalinski and Philipp Behrendt along with Jordan Bass (Taxing Cryptocurrency) will be speaking at the upcoming Strafford Taxation of Digital Asset Transactions Under Current Tax Law webinar, Thursday, April 3, 2025, 10:00 a.m. – 11:30 a.m. (PST).

This webinar will provide tax counsel and advisers with a detailed analysis of the taxation of digital asset transactions under current tax law. The panel will discuss the impact of applicable IRS tax rules and recent regulations, sourcing of income rules and challenges, issues presented by applicable international tax rules under the Internal Revenue Code, and other vital items impacting taxpayers engaging in digital asset transactions.

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For more information, please contact Jonathan Kalinski at kalinski@taxlitigator.com

For more information, please contact Philipp Behrendt at behrendt@taxlitigator.com.

We are pleased to announce that Steven Toscher and Michel R. Stein along with William J. Curtis (Polsinelli) will be speaking at the upcoming Strafford IRS Final Regulations for Syndicated Conservation Easements webinar, Thursday, March 27, 2025, 10:00 a.m. – 11:30 a.m. (PST).

This course will provide tax counsel and advisers guidance on critical tax issues concerning conservation easement transactions in light of IRS final regulations. The panel will discuss critical elements of the IRS final regulations and the impact on conservation easement transactions, address IRS assessments and audits, and offer techniques for defending conservation easement transactions.

On Oct. 8, 2024, the IRS issued final regulations for conservation easement structures and related transactions. The final regulations solidify the IRS’ continued focus on enforcement actions for syndicated conservation easements. Taxpayers, tax counsel, and advisers must identify and recognize key tax issues stemming from the final regulations in structuring these transactions and defending against IRS examination.

The final regulations provide that syndicated conservation easements are listed transactions for disclosure purposes, clarify the definition of “conservation easements” and “participants,” and categorize syndicated conservation easements and substantially similar transactions into separate classes of abusive transactions, along with other significant provisions.

The panel will discuss key elements of the IRS final regulations, structuring conservation easement transactions, and minimizing IRS assessments and audits, as well as offers techniques for defending conservation easement transactions.

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For more information, please contact Steven Toscher at toscher@taxlitigator.com.

For more information, please contact Michel Stein at stein@taxtlitigator.com

We are pleased to announce that Sebastian Voth will speak before the Glendale Estate Planning Council on Monday, March 18, 2025. His presentation will delve into “audit stage” type issues to consider at the estate planning level, including privilege issues, IRS summons interviews, communications with experts, and preparing for potential Tax Court litigation. Understanding your client’s potential and varied tax authority audiences from the audit stage through trial is essential to preserve your client’s best interests and potential tax mitigation strategies.  

Sebastian Voth is a Principal at Hochman Salkin Toscher Perez P.C., specializing in tax investigations, litigation and appeals, and complex tax matters. Prior to entering private practice, Mr. Voth served for 15 years at the Internal Revenue Service including most recently as a Special Trial Attorney with the IRS Office of Chief Counsel’s Strategic Litigation Division leading trial teams in all phases of litigation before the Tax Court. During his tenure with the IRS, Mr. Voth served on the leadership team of the nationwide IRS Counsel mentoring program and mentored numerous IRS attorneys. He is the recipient of two Lucite Awards for significant Tax Court opinions and received a 2024 Special Act Award (Strategic Litigation), the 2023 Nationwide Innovator of the Year (LB&I), the 2022 Nationwide Special Trial Attorney of the Year (SB/SE), the 2017 U.S. Department of the Treasury Outstanding Litigator and the 2017 Nationwide Attorney of the Year (SB/SE). As a Special Trial Attorney, Mr. Voth also lectured on civil tax fraud, litigation skills, including the Federal Rules of Evidence, best practices for preparing cases for trial, and working with expert witnesses.

For more information, please contact Sebastian Voth at voth@taxlitigator.com

We are pleased to announce that Cory Stigile had been elected as Fellow of the American College of Tax Counsel. Cory joins seven other members of our firm who are Fellows of the most prestigious group of tax lawyers in the United States.

As noted by the President of ACTC, “The new Fellows bring a range of tax practice diversity to the important work of the College in advancing sound tax policy and effective tax administration.”

Link to Press Release

Cory Stigile is a Principal at Hochman Salkin Toscher Perez P.C., who specializes in tax controversies as well as business and international tax. His representation includes federal and state tax controversy matters, including sensitive tax-related examinations and investigations for individuals, partnerships, limited liability companies, and corporations. His practice also includes complex civil tax examinations, administrative appeals and tax collection proceedings (where he is widely respected for achieving meaningful resolutions of difficult tax collection issues). He has litigated cases in the U.S. Tax Court, the U.S. District Court, the Court of Federal Claims and the 9th Circuit Court of Appeals.

Mr. Stigile is a Certified Specialist, Taxation Law, The State Bar of California, Board of Legal Specialization. 

Mr. Stigile is also a CPA licensed in California. He is an active volunteer with CalCPA and the AICPA, and is the President of PADI Foundation.  

For more information, please contact Cory Stigile at stigile@taxlitigator.com.

We are pleased to announce that Sandra R. Brown along with Caroline Ciraolo (Kostelanetz LLP), Maisha Horton (IRS Criminal Investigations Division), Matthew Mueller (Fogarty Mueller Harris, PLLC) and Rod Rosenstein (King & Spalding) will be speaking on The Long and Winding Road From Civil Fraud Referral to Criminal Tax Indictment at the upcoming ABA Criminal Justice Section 40th White Collar Crime Institute being held at the Hyatt Regency, Miami, Florida, Wednesday, March 5, 2025, 10:30 a.m. (EST).

This program will explore the challenges and strategies when dealing with parallel investigations involving the IRS and federal tax inquiries by different state and/or federal government entities, including issues that arise when government coordination may result in a determination of a “joint” rather than parallel matter.

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Sandra R. Brown is a Principal of the law firm Hochman Salkin Toscher Perez P.C., where she specializes in criminal tax investigations, grand jury matters, litigation and appeals, as well as representing and advising taxpayers involved in complex and sophisticated civil tax controversies, including sensitive-issue audits and administrative appeals, as well as civil litigation. Prior to joining the firm, Ms. Brown served as the Acting United States Attorney, First Assistant United States Attorney; and Chief of the Tax Division in the Office of the U.S. Attorney, Central District of California.

During her 27 years as a trial lawyer, she personally handled over 2,000 tax cases on behalf of the United States. During her tenure with the government, Ms. Brown received the Internal Revenue Service Criminal Investigation Chief’s Award and the IRS’s Mitchell Rogovin National Outstanding Support of the Office of Chief Counsel Award, the highest recognitions awarded by the IRS to non-IRS employees. 

Ms. Brown obtained her LL.M. in Taxation from the University of Denver, is a fellow of the American College of Tax Counsel, Vice-Chair of the ABA’s Section of Taxation’s Criminal and Civil Tax Penalties Committee, Co-Chair of the UCLA Tax Controversy Institute, Co-Chair of the ABA Criminal Tax Fraud and Tax Controversy Conference, an ABA Loretta Collins Argrett Fellowship Mentor, and is a frequent lecturer and author on tax controversy topics, including international compliance matters. Ms. Brown has been recognized as one of California’s top 100 leading women lawyers and most recently, the recipient of USD School of Law’s Richard Carpenter Excellence in Tax Award and honored at the California Lawyers Association Tax Bar and Tax Policy 2024 Toast to Women in Tax.

For more information, please contact Sandra R. Brown at brown@taxlitigator.com.