Current Issues and Opportunities in State Tax Controversy

Chicago Tax Club – October 27, 2010

George Barry, Director, Deloitte Tax LLPJon Cesaretti, Director, WTAS LLC - ModeratorDave Kupiec, Partner, Kupiec & MartinMike Wynne, Partner, Reed Smith LLP

Outline• The Beginning• The Decision Makers for the State• Endgame• The Courts• Legislation• Revenue Department Advance Resolution• Overpayments / Refunds• Where is this going?• Questions• Disclaimers

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The Beginning• What are we seeing?

– Today– Future

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The Beginning (Cont.)• Responding to (or Initiating a) Controversy

• Different environment?• Individuals involved (Taxpayer, State,…)• New approach?

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The Decision Makers for the State• Audit / Admin. Procedure / Judicial Process

– What are we seeing today?– Basis for Decisions– Future

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Endgame• Time has passed• Resources• Cost/Benefit – What has changed in this determination?• Settlement environment

– Now– Future

• Litigation considerations– Subject matter– Financial statement impact– Legal basis– Pending litigation– State fiscal position– Politics– Other

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The Courts• Administrative tribunals (For example, IL ALJ)• Circuit Courts• Courts of Appeal• State Supreme Courts• The U.S. Supreme Court

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Legislation• Does it work…?• How and when does it work…• Current dynamics

Overpayments/Refunds• Timing• Alternatives:

– Offsets– Legislation– Other possibilities

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Revenue Departments / Advance Resolution of Issues

• Does it work?• Current dynamics

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Illinois Amnesty (10/1/2010 to 11/8/2010)

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• This amnesty in perspective• Outline

– The Stick(s)– The Carrot

• What does the bottom line appear to be (currently)?• Use Tax Amnesty 2011?

Prospective/Retroactive

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• Prospective– What are your facts

• Retroactive– Federal law– State Law

Where is this going?

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– Current– Near Future

• Effect on taxpayers

Questions?

George Barry Jon CesarettiDeloitte Tax LLP WTAS LLC

(312) 357-3937gebarry@deloitte.com jonathan.m.cesaretti@wtas.com

Dave Kupiec Mike WynneKupiec & Martin, LLC Reed Smith LLP(312) 632-1022 (312) 207-3894dkupiec@kupiecandmartin.com mwynne@reedsmith.com

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Disclaimer

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This presentation contains general information only and the respective speakers and their firms are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. The respective speakers and their firms shall not be responsible for any loss sustained by any person who relies on this presentation.

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