Tax Accounting

Miller & Chevalier: There from the Beginning

Miller & Chevalier offers clients one of the nation's leading tax accounting practices. Tax accounting has been a core element of Miller & Chevalier's internationally-recognized tax practice since our founding as the nation's first federal tax firm in 1920. The strength of this commitment remains evident in the team of tax accounting professionals we offer our clients and in the remarkable list of clients that routinely seek us out. Miller & Chevalier is an acknowledged firm of choice for many of the largest and most respected companies in the world, who value our team's unique combination of top-tier tax accounting capabilities, senior government experience, and record of successful and cost-effective issue resolution.

Tax Leadership, Government Know-How, and Respect

Miller & Chevalier’s Tax Accounting team is recognized by our clients and by those on the other side of the table for our knowledge, experience, success, integrity, and professionalism.

Our team includes the nation’s most widely cited authority on tax accounting, whose treatise, “Federal Tax Accounting” is used in many of the nation’s leading universities and law schools and is regularly cited by the courts; a former IRS National Office specialist, who authored or participated in authoring many of the most significant regulations, rulings, and procedures on tax accounting; and others with substantial experience in successfully litigating and/or resolving tax accounting issues. Our reputation within the Internal Revenue Service (IRS) and U.S. Department of the Treasury allows us to represent our clients' positions effectively and efficiently at the highest levels of tax administration and before the courts. Many of our tax accounting lawyers have served in senior positions with the IRS, Department of Treasury, and the U.S. Department of Justice (DOJ). This experience, including knowledge of how tax accounting principles evolved over the years, participation in many of the leading cases on tax accounting, in-depth understanding of the nation's tax system, and the ability to work effectively with the nation's tax leadership have been of tremendous value to our clients on countless occasions.

Raising the Bar on Compliance

These are challenging times, and the need for experienced tax advice is more critical than ever. Even as it seeks to stimulate the economy by offering businesses an array of new tax incentives, Congress remains on the search for new sources of tax revenue, placing the IRS under ever-increasing pressure to close the "tax gap." Companies are faced with maximizing the benefit of the new incentives being offered by Congress while confronting the ever-closer scrutiny of those benefits by the IRS. At the same time, the IRS is shifting much of its own investigative role to taxpayers themselves, putting unprecedented emphasis on transparency and disclosure. Pressure from other sources, including undisclosed tax positions (UTP), FIN 48, and Sarbanes-Oxley, add to the increasing stresses faced by corporate tax departments to "get it right."

In this environment, however, getting it right is not always enough. By centralizing issue management, the IRS has changed dramatically the traditional dynamic encountered by taxpayers in defending their tax positions. In creating the Industry Issue Focus program to coordinate strategic issues for enforcement and potential litigation, the IRS has significantly restricted its agents' ability to settle issues based on taxpayers' specific circumstances. This altered landscape is particularly acute in the tax accounting area. Many of the issues identified by the IRS as raising the highest compliance concerns -- and most likely to attract scrutiny on audit -- are tax accounting issues. This heightens considerably the pressure on businesses in developing and defending their tax accounting positions, or otherwise in achieving their tax accounting objectives.

Tax Accounting Counsel for Challenging Times

Involving tax counsel early in planning, assessing, and defending federal tax positions is crucial in this climate. This is particularly true in tax accounting, which traditionally has attracted, and in the current climate will certainly continue to attract, significant scrutiny by the IRS. Typically, tax accounting issues involve relatively large adjustments and are a favorite target of examination teams.

Miller & Chevalier lawyers have one of the nation's longest and most impressive track records obtaining positive results for our clients in resolving tax accounting controversies successfully, whether through the IRS administrative process or in litigation. Our tax accounting team has decades of experience helping clients plan for audits and managing the audit process across the entire range of accounting methods issues. We know that for most of our clients litigation is an option of last resort. As a result, our goal is to resolve issues without litigation, at the earliest opportunity, and under the best possible conditions for our clients, but when circumstances require litigation, or the client prefers a complete victory, Miller & Chevalier is, again, among the best. Our lawyers enjoy litigation and have been counsel of record in many of the nation's most prominent tax decisions, many of these in the tax accounting area. For decades, clients have turned to us to litigate challenging and complex tax accounting issues. Our clients appreciate both our record of success in the courtroom and our approach to litigation. They know that we will go to trial only if it is in their best interest. If litigation is necessary, or desired by the client, we will be forceful, vigorous, and persuasive advocates. 

The Full Range of Tax Accounting Capabilities

Whether the task involves planning or defending a tax accounting position, arguing a case before the Tax Court or the United States Supreme Court, discussing pressing tax policy issues at the highest levels of the IRS and Treasury, or obtaining IRS approval of unique methods of accounting, Miller & Chevalier's team of experienced professionals handles the full range of tax accounting issues. We are routinely engaged in representing clients in issues involving LIFO and other inventory accounting methods, the domestic production deduction of Section 199, capitalization, the deferral of advance payments, installment obligations, depreciation and amortization, accounting for environmental costs, income and expense accruals, the economic performance rules, and all aspects involving the clear reflection of income. This list is far from complete; it offers only a brief glimpse of the tax accounting issues we handle regularly for our clients. Indeed, we are aware of no tax accounting issue with which our team does not have experience, whether from the standpoint of taxpayers and tax practitioners or from the standpoint of Treasury and the IRS. Please check the “Engagements” section for further examples of representative engagements.

Recent examples of tax accounting issues our team has tackled include:

  • The deferral of hundreds of millions of dollars in revenue received on the sale of "gift cards" by restaurants and retailers; 
  • Successfully working with IRS and Treasury to address our clients' needs in the "domestic production deduction" regulations; 
  • The application of the inventory accounting "pooling" rules to cross-over vehicles; and 
  • Applying the casualty loss rules to massive destruction caused by Hurricane Katrina.
Government Experience
  • Advisor to the Assistant Secretary of Tax Policy, U.S. Department of the Treasury
Corporate Experience
Rankings and Recognition
  • Chambers USA: Tax Team of the Year, 2016
  • Chambers USA: Tax: Controversy (National), 2007 - 2016
  • Chambers USA: Tax (District of Columbia), 2003 - 2016
  • Legal 500: Tax: Non-Contentious (US), 2013 - 2016
  • Legal 500: Tax: International Tax (US), 2013 - 2016
  • Legal 500: Tax: Contentious (US), 2007 - 2016
  • U.S. News -- Best Lawyers® "Best Law Firms": Tax Law (National), 2010 - 2016
  • U.S. News -- Best Lawyers® "Best Law Firms": Tax Law (District of Columbia), 2010 - 2016
  • International Tax Review "Americas Tax Awards": Americas Tax Policy Firm of the Year, 2012 - 2013, 2015 - 2016 
  • International Tax Review "Americas Tax Awards": Washington, DC Tax Firm of the Year, 2013
  • International Tax Review "Americas Tax Awards": Washington, DC Transfer Pricing Firm of the Year, 2012
  • International Tax Review: World Tax (Washington, DC), 2012, 2014 - 2017
  • International Tax Review: World Transfer Pricing (National), 2014 - 2017