MATT LERNER, leader of the firm’s Tax Controversy practice, has more than 35 years of experience with tax-related matters, focusing on federal and state tax disputes at the administrative level and in litigation. He also has substantial experience in criminal tax controversies and complex civil litigation related to tax strategies.
- Civil Tax Controversy and Litigation: Matt’s experience in federal civil tax controversy covers all stages of the Internal Revenue Service’s (IRS) administrative process and litigation in Tax Court, the Court of Federal Claims and the federal district courts. He often advises clients during the transaction planning stage and prior to audit to make sure their files are “audit-ready” and their defenses to possible challenges are well-documented. Likewise, he frequently works with clients on document retention policies and understanding their disclosure obligations. Once audits commence, he assists clients with IDR responses, witness interviews, developing a cohesive strategy with respect to their most challenging issues, and responding to Notices of Proposed Adjustments. He has broad experience at IRS Appeals, having favorably resolved dozens of issues, often in the face of conflicting IRS National Office positions.
In addition to his experience in managing tax controversies, Matt’s practice extends to numerous substantive areas of federal tax law. Among his recent representations are cases involving: transfer pricing; international inter-company transactions; debt/equity issues; the domestic production activities deduction under Section 199; the Section 41 research credit; worthless stock and abandonment losses; capital versus expense classifications; employee versus independent contractor classification; losses from trading in securities and commodities; inter-corporate transactions and consolidated returns; miscellaneous corporate fees and expenses; valuation questions; and placed-in-service date disputes. He has also handled cases involving tax shelters, accounting methods and promoter registration.
Matt has significant experience with many of the IRS alternative dispute resolution procedures, including Pre-Filing Agreements, Industry Issue Resolution, Technical Advice and Early Appeals Referral. He also has handled numerous Fast Track and Post-Appeals mediations.
- Financial Products Civil Litigation: Matt represents clients in multi-party civil litigation arising out of tax-advantaged transactions that have been challenged by the IRS, as well as other disputes involving complex financial instruments and trading activity. He is particularly experienced in analyzing complex trading strategies and effectively communicating their financial and tax characteristics to non-financial professionals, including administrative and judicial decision-makers. Matt works effectively with experts evaluating the economic aspects of trading strategies, and cross-examining opposing experts on issues relating to financial transactions and economics.
- Crisis Management: Matt frequently advises clients facing investigations or litigation-engendered public relations crises. His counsel helps clients remain focused on their business operations, while protecting their assets and reputation, in the midst of complex, fast-moving crises. Matt has led multi-faceted representations, coordinating clients’ responses to congressional inquiries, criminal investigations, civil litigation, public relations scrutiny and agency review.
- Federal Criminal Tax Litigation: Matt has represented numerous individuals and companies in federal criminal tax investigations. He has had primary responsibility for all aspects of grand jury investigations, including document production and witness preparation, and has made successful pre-indictment presentations to the Department of Justice on behalf of clients accused of tax crimes. Matt is also experienced in post-indictment motions practice, including motions to dismiss indictments on substantive grounds, as well as bail and discovery motions.
Matt frequently speaks to business and tax groups on tax controversy and ethics topics and is nationally recognized for his practice. Chambers USA notes in its 2018 edition that he has “really good instincts, a good style in court and a wide range of experience,” and clients describe that he has “a great legal mind, but he also understands business and its interplay with the law, and can articulate that to non-tax people.”
Representative Matters
- Section 7874: Obtained a complete concession at Appeals on behalf of a major manufacturing company that the IRS asserted had inverted and should be taxed as a U.S. entity
- State Tax: Prevailed at trial and on appeal with respect to the California Franchise Tax Board’s attempt to apply punitive changes to its promoter penalty regime retroactively
- Section 482: Obtained a complete concession of a transfer pricing adjustment for a financial institution by discrediting the analysis of the economist used by the IRS
- Section 165: Obtained a very favorable settlement with respect to whether a massive development project was abandoned
- Section 172: Obtained a nearly 100% concession at Appeals for a financial institution with respect to the interpretation of the temporary provision extending the loss carryback period during the financial crisis
- Sections 446, 451 and 461: Obtained a complete concession at Appeals for a transportation company with respect to multiple timing and accounting method issues
- Sections 482, 951, 954 and 956: Assisted multiple clients to be audit-ready with respect to their offshore manufacturing activities
- Section 901: Obtained a substantial concession at Appeals in connection with a so-called foreign tax credit generator case
- Section 41: Representing multiple clients in audits of research credit claims, involving tangible property and software
- Section 199: Representing multiple clients in audits of the domestic production activities deduction, involving tangible property, software and films
- Employee Classification: Represented transportation company in dispute regarding proper classification of workers as employees or independent contractors
Professional Recognition
- Chambers USA in Tax Controversy (2009–2024)
- Chambers USA in High Net Worth (2022-2023)
- The Legal 500 US in Tax: Controversy (2012–2017)
- The Best Lawyers in America in Tax Litigation and Controversy (2012–2024)
- The International Who’s Who of Corporate Tax Lawyers (2016)
- Named repeatedly to the Washington, D.C. Super Lawyers list