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FAQs About Milbank TAARS® Tax Account Analysis and Recovery Services
www.taars.com
confidential
What is Milbank TAARS®?
Milbank TAARS® is a confidential service that involves thoroughly reviewing corporate taxpayer account records (“transcripts”) maintained by the Internal Revenue Service and state taxing authorities to determine whether the taxpayer is entitled to refunds, credits or additional payments of interest. More specifically, Milbank TAARS® (i) identifies errors in the computation of interest, in the determination of penalties and in the transcripts, (ii) analyzes the transcripts using Milbank’s legal expertise to uncover issues favorable to the taxpayer, and (iii) recommends to the client the filing of claims to obtain any refunds, credits or payments that become available as a result of Milbank’s review. More often than not, we discover errors and determine that indeed the company is entitled to refunds, credits or additional interest payments. We do not question or verify the correctness of the company’s substantive tax liability. We examine federal income, payroll and excise taxes, as well as state franchise and income taxes.
OVERVIEW OF MILBANK TAARS®
© 2013 Milbank, Tweed, Hadley & McCloy LLP. All rights reserved. Attorney Advertising. Prior results do not guarantee a similar outcome. (This legend required by New York State Bar rules.)
Who are Milbank TAARS® clients?
Over the more than two decades that we have been offering Milbank TAARS® – longer than any other law firm
or accounting firm – we have developed a recognized leading practice in this area. Almost half of the Fortune 500
corporations have used Milbank TAARS®. We work with companies in every sector of the economy, including not only
US companies but also US subsidiaries of foreign companies.
We’ve obtained substantial refunds in most engagements. Many of our most successful engagements have been follow-
ups to other service providers.
We would be pleased to furnish you references from tax directors at other major corporations.
What are the fees for Milbank TAARS®? What if you don’t discover anything favorable to our company?
Milbank TAARS® is offered on a reasonable contingent fee basis,
with all expenses absorbed by Milbank. The fee is payable only
if and when the Milbank TAARS®- generated refunds, credits
or payments are actually received or credited. If we determine
that the tax authorities have correctly determined interest and
penalty amounts, we don’t charge anything for our services –
and your company would have the comfort of knowing that it
has received all refunds to which it is entitled.
We’ve had a loss in some years – will Milbank TAARS® still be relevant? And how far back in terms of tax years can we go?
Milbank TAARS® is most productive for corporations that have
paid substantial deficiencies or received significant refunds
within the past six years. Losses in one or more years would,
however, not necessarily diminish the value of our service to
your company.
Indeed, in many cases, Milbank TAARS® attorneys are able
to substantially enlarge the usual federal two- or three-year
limitations period for claiming deficiency interest and six-year
period for allowable interest. This is frequently the case for
companies engaged in tax litigation.
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We’ve made some acquisitions recently. Would Milbank TAARS® make sense in that case?
Definitely yes. Some of the most significant opportunities for correcting errors and obtaining refunds arise as a result of
corporate acquisitions. The tax due diligence that an acquiring corporation performs typically focuses on such matters
as quantifying the target’s contingent tax liabilities rather than analyzing the target’s tax accounts for potential Milbank
TAARS®-type refunds. A review of the pre-acquisition tax accounts of recently acquired corporations frequently results
in refunds.
We’re just about to settle a dispute with the IRS and they’ve said they are going to include interest in the settlement. Should we first review and approve their interest calculation and later have Milbank perform an interest review?
Generally, no. Milbank TAARS® is most productive if we review the IRS’s proposed interest calculation in a settlement
(whether on administrative appeal or in Tax Court litigation) before it is agreed to. Our fee would apply only to
adjustments beyond those already identified by you. Our review includes advice regarding terms of the settlement
affecting interest calculations for prior years and the determination of the periods of limitations.
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WHY MILBANK?
Why should we use Milbank for these services? How does Milbank differ from other service providers in this area?
Having pioneered this work over two decades ago, we believe we have developed the leading practice in identifying
tax account errors and obtaining refunds. We have attracted and retained some of the most experienced and expert
technical people in the field. Most clients retain us exclusively to provide this service on an ongoing basis with respect
to their audit cycles.
The fact that we are a law firm would, we believe, be advantageous to you. We are in a better position to make the
necessary and often complex legal judgments that are inherent in a sophisticated review of tax transcripts. Each Milbank
TAARS® analysis is undertaken with the collaboration of experienced tax attorneys whose assistance in the analysis
itself and in the presentation of claims is critical to maximizing client recoveries. Our attorneys are familiar with many
governmental positions regarding methodologies for calculating interest and imposing and abating penalties that are not
publicly available or otherwise published (and some that are not even widely known within the taxing authority). We
make certain that each issue encountered in the course of a Milbank TAARS® engagement is presented in a way most
favorable to your company as the taxpayer.
As a law firm, we can pursue a claim for refund or credit through the appropriate court system – and we charge
no additional fees for such litigation. Service providers that are not law firms cannot do that. There are significant
advantages to having the same team that identifies a claim handle it from discovery and substantiation through judicial
recovery.
Because Milbank is a law firm, client documents and information are subject to attorneys’ professional duties of
confidentiality, and our communications could have the benefit of the attorney-client privilege in the event of litigation.
Milbank TAARS® is offered through our Tax Department, which furnishes tax advice to major corporations and financial
institutions around the world. With its predecessor firms having been founded in New York in 1866,
Milbank, Tweed, Hadley & McCloy LLP is now one of the world’s preeminent global law firms with approximately 600
lawyers providing a full range of financial and business legal services to many of the world’s leading financial, industrial
and commercial enterprises.
We’ve already had another firm look at our transcripts, so why should we utilize Milbank TAARS®?
There is no cost to a company for a follow-up or additional review by us. Our experience is that our review often
uncovers significant additional refund opportunities. Even if there are no opportunities for additional claims, tax directors
appreciate knowing that nothing has been overlooked.
Can’t we just do this internally, with our own staff using special software available in the market?
With rare exceptions, corporations cannot thoroughly or
successfully perform Milbank TAARS®-type services in-house,
principally because it is not cost-effective to develop and maintain
internally the requisite expertise.
The available software has limitations in terms of scope and
functional utility. We use proprietary software to identify certain
errors beyond those identifiable by using commercially available
software. More importantly, no software can make the type of
sophisticated legal judgments about statutes of limitations and other
determinations about the legal effect of fund movements within a
company’s accounts. And there is no substitute for the experience
we’ve accumulated and relationships we’ve established in dealing
with the IRS and other tax authorities.
There is no substitute for the experience we’ve accumulated and relationships we’ve established in dealing with the IRS and other tax authorities.
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PROCEDURE
Will this take up a lot of our staff ’s time? And how long does the whole process take?
Our service is simple and efficient and makes minimal demands on
company time. Usually all we need to get started are copies of a limited
number of pertinent tax documents, such as the affiliation schedule and
first pages of tax returns. Most companies are able to furnish us these
documents with just a few hours of staff time.
Typically, we report back in about three to four months with our Milbank
TAARS® analysis and a statement whether any refunds are due to your
company. If your company approves the filing, we then prepare and submit
the formal claim. Our claims are detailed, substantiated and accurate,
so that the IRS or other taxing authority is usually able to act on them
without need for further questions. We’re proud of our record in this area
and know that claims on Milbank letterhead are recognized as professional
and supportable, with the result that the vast majority of our claims are
processed as a routine matter. In the case of federal refunds, which are
handled by the IRS Center in Ogden, Utah, our clients generally receive a
refund check within three months (although sometimes “netting” refunds
take longer).
What do we have to do if we want to engage Milbank TAARS®? And what steps does Milbank take?
You would sign an engagement letter and a standard-form power of
attorney that lets the IRS or other taxing authority furnish us with a copy
of your corporation’s tax transcripts. As noted above, you also have to
provide a limited number of tax records. Usually, that’s all that’s required
of the client.
We would then order the transcripts and analyze them along with
related tax documents and prepare draft claims for submission to you for
approval. If approved, we prepare, file and pursue the claims and conduct
whatever discussions with the IRS or other taxing authorities may be
necessary.
A substantial percentage of the most recently published list of Fortune 500 corporations are or have been Milbank TAARS® clients. More often than not, we discover errors and determine that indeed the company is entitled to refunds or credits.
We’ve got a good relationship with our IRS audit team – is there any risk to us in “rocking the boat” with them? And what if the IRS disputes the actual claim?
We are unaware of any Milbank TAARS® claim having triggered or adversely affected a tax audit. All Milbank TAARS®
claims are processed through IRS Centers, independent of audits. Audit teams rarely are aware of interest refund claims,
since those do not fall within their area of responsibility. We’ve always found that the IRS is genuinely interested in
seeing that the taxpayer is properly treated in accordance with law.
Our long track record with the IRS enables us to anticipate questions and concerns before they present problems in
the processing of a claim, and we are confident that our good working relationship with IRS personnel helps promote a
professional and prompt resolution of claims.
If, however, the IRS technician denies a Milbank TAARS® claim and we cannot convince the technician otherwise, we, with
client approval, will appeal the denial. And if the appeal is unsuccessful, we will, upon mutual agreement, litigate the denial
at no additional cost to your company.
How do I determine if my company is eligible for Milbank TAARS® refunds?
To determine whether your company has the potential for Milbank TAARS® refunds, Milbank recommends meeting with
your company’s principal tax executive and key members of his or her staff. The meeting usually lasts less than an hour
and provides a full opportunity to address questions about the objectives and workings of Milbank TAARS® and the
potential benefits to your company. Based on that meeting, Milbank will state its view of whether Milbank TAARS® is
likely to be productive for the company and discuss the specific terms of an engagement.
For additional information, please visit the Milbank TAARS® website at www.taars.com, or for more background on
Milbank’s global legal practice generally, please visit www.milbank.com.
MILBANK TAARS® MANAGEMENT TEAM
William C. Perdue* Technical Director 212-530-5656 [email protected]
Joseph M. Persinger General Counsel New York 212-530-5072 [email protected]
Gilbert Polt Deputy Counsel New York 212-530-5321 [email protected]
Francine Silverman* Managing Technical Director New York 212-530-5426 [email protected]
Janice Van Stolk Director Washington DC 202-835-7573 [email protected]
Warren Waxman* Technical Director New York 212-530-5582 [email protected]
Tonya J. Blocker* Technical Manager 212-530-5642 [email protected]
Crystal Nixon* Technical Analyst New York 212-530-5368 [email protected]
Glenn S. Gerstell Managing Partner Washington, DC 202-835-7585 [email protected]
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*Not admitted to practice law in any state
© 2009 Milbank, Tweed, Hadley & McCloy LLP. All rights reserved. Attorney Advertising. Prior results do not guarantee a similar outcome. (This legend required by New York State Bar rules.)
FAQsABOUT MILBANK TAARS®
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