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Detail about Tom’s 360-Degree Experience, Allowing You to Drill Down

Vastly experienced, thoroughly validated tax-dispute lawyer with a nationwide practice.  In 2019 Tom moved his law practice from Chicago to the Seattle area.  Having practiced tax law in Washington, DC, for 18 years, in Chicago for 18 years, and now in Seattle, he has a premier nationwide federal tax-dispute resume.  Perhaps the premier federal tax-litigation practitioner in the Pacific Northwest, Tom has advised or represented many of the nation’s blue-chip companies, tax-exempt organizations, and individuals.  In recent years, he is best known for his first-chair handling of cutting-edge federal tax-refund suits in which he “choreographed” multiple, similar, pending seven- and eight-figure suits.  He recently first-chaired a proposed class action seeking $500 to $600 million in additional interest for the nation’s incorporated tax-exempt teaching hospitals — probably the largest tax class action in history, in terms of dollars and members.

To his practice, Tom brings several key elements:

  • 40 years of technical tax experience, first representing the IRS and, after that, representing blue-chip taxpayers
  • 14 years of federal government service in Washington, D.C., where he represented the IRS in courts around the nation and in Washington.
  • 42 years of extensive first-chair, in-court, trial and appellate experience
  • Five years as a prosecutor in his native Wisconsin, including both a stint as a federal prosecutor in Madison, and a stint as the youngest District (County) Attorney in Wisconsin

This “360-degree,” litigation-heavy combination enhances Tom’s ability to realistically assess the legal hazards faced by a taxpayer involved in a dispute with the IRS; to plot, pursue, and implement a strategy for settlement that comprehends the inner workings of both the IRS and the U.S. Department of Justice; and to seamlessly to move ahead, if necessary, into IRS Appeals and litigation, through and including any courthouse appeals that are taken.

Tom’s highly unusual extensive-tax-plus-extensive-litigation skill set allows a taxpayer to avoid the “two headed” arrangement for litigating tax cases, where a law-firm tax partner is “yoked” to a litigation partner — a less-than-optimal, expensive arrangement used by most law firms litigating federal tax cases.

Tom believes that early engagement of a tax lawyer with a prominent complex-litigation capability facilitates fair settlements with IRS authorities — and enables a taxpayer to make a well-informed assessment of a proposed settlement against the ultimate benchmark:  litigation hazards and delay, and expense.  Bringing a tax-litigator into the picture, instead of just an accountant, also confers the protection of the attorney-client privilege in those matters that arguably have fraud overtones or that might otherwise attract the interest of IRS criminal investigators.    

Tom is one of a handful of tax lawyers in private practice nationally to have first-chaired more than 20 jury trials and more than a dozen appeals in the federal courts. He has argued 15 cases before five federal courts of appeals — an extreme rarity for a tax lawyer in private practice.  With his award-winning, supervisory experience at the Department of Justice in Washington and as a long-time partner with premier large law firms, Tom may have handled more multi-million dollar tax-refund suits in the federal trial courts than any attorney now active in private practice in the United States. Tom estimates that overall he has litigated more than 200 federal tax cases over the last 40 years, on “both sides of the ball.”

Tom is the only attorney in private practice in the nation, of whom he is aware, who formerly worked in both a district-court section (five years) and in the Court of Federal Claims section (nine years) of the Tax Division of the U.S. Department of Justice, in Washington, D.C.  This unique background provides Tom with unique insights into the comparative tax-related functions and capabilities of those two tax-litigation forums.  He also has litigated cases in the U.S. Tax Court.

In addition to his in-court practice, Tom represents taxpayers before the IRS’s Examination, Collection, Appeals, and Criminal Investigation Divisions, and before the IRS National Office.  Tom also has handled state and local tax disputes in Illinois, including disputes with the Illinois Department of Revenue and the City of Chicago and its suburbs.  Tom has worked with, or opposite, the IRS since 1983, when, as a federal prosecutor, he handled his first federal tax case — a criminal prosecution that went to a jury verdict and then, successfully, to the U.S. Court of Appeals for the Seventh Circuit where it established a rule on an issue of first impression in that circuit.

Tom’s experience with state and local tax (SALT) matters includes:  a key role in assisting a Racino in recovering $30 million in Indiana gaming excise tax; first-chairing a two-day hearing in a charitable property-tax exemption case before an Illinois Department of Revenue ALJ; formulating arguments, and collecting evidence and preparing witnesses, for a suit by business faced with a “bet the company” assessment of lodging excise taxes by a suburban Chicago municipality; and formulating arguments respecting equitable recoupment in a nine-figure California franchise-tax case.

Tom has very extensive experience with federal payroll/employment /self-employment tax issues, having handled scores of court cases in this arena.  This experience facilitates his advice on new Form 1099-NEC, to be used for reporting payments to independent contractors.

With the IRS now going forward with its promised High Net-Worth audits, Tom offers unusual assistance:  he has handled both IRS administrative and litigation in this arena, as well as matters involving delinquent filings of foreign financial account reports, FinCen 114 (formerly known as Forms TD F 90-22.1),  also known as FBARs.  Resident aliens can find themselves surprised by the requirement that they file an FBAR, and Tom has successfully resolved those filing delinquencies for many clients.

Tom thus has the experience necessary to transition seamlessly from audit, to IRS appeals, to federal trial courts, to federal appellate courts — all informed by decades spent representing high-net worth individuals and the IRS.

With a background as a former federal prosecutor, as a USDOJ Tax Division senior attorney and supervisor, and with extensive familiarity with FinCEN’s foreign-bank-account reporting regime, Tom is superbly well situated to assist taxpayers who have failed to report income associated with virtual currency/cryptocurrency.   In addition, a new FinCEN reporting regime respecting beneficial ownership of an interest in corporations and LLCs will arrive in 2022, giving the IRS a powerful new tool for detecting tax evasion.  Roughly 30 million small businesses will be required to file those reports with FinCEN.  Tom is very familiar with this new law.

Taxpayers who have failed to report income should consult a tax attorney with a view to filing amended returns reflecting omitted income – and they should do so before the IRS comes knocking.  By engaging an attorney instead of an accountant, communications in a matter with criminal overtones will be protected by the attorney-client privilege.  As a former prosecutor, Tom has extensive experience in criminal-tax matters — a rarity for tax lawyers and accountants.

Beginning in 2004, Tom was at the forefront of the landmark litigation over FICA tax paid on stipends provided to medical residents – litigation that in March 2010 led the IRS to announce a billion-dollar-plus global concession of the issue. Tom first-chaired the landmark victories for The University of Chicago Hospitals in both the federal district court and then in the U.S. Court of Appeals for the Seventh Circuit.  This reversal, by the IRS, of its long-time litigation position respecting an issue worth billions of dollars is one of the most notable IRS capitulations in history.  At the time of this capitulation, Tom was lead counsel in more of the pending FICA-tax cases than any other attorney in the nation.  He is the only attorney identified by The Legal 500 (2010 ed.) for work in this field.  After working with many tax-exempt institutions to navigate the IRS’s implementation of its 2010 global concession, Tom concluded that most of these institutions had been denied the proper amount of interest on their refunds of employer-portion FICA tax.  Again finding himself on the leading edge, Tom represented teaching hospitals seeking to recover perhaps $500 million of additional statutory interest, as a “follow on” to the FICA refunds made under the IRS’s 2010 global concession that he helped to secure.  Tom was the only lawyer in the nation to have actively pursued additional interest in suits filed in federal court, filing his first suit of that type in July of 2013.  That huge-dollar, cutting-edge litigation was concluded in October 2019.

Tom has extensive familiarity with new Code section 1061(c)(4)(A) and IRS Notice 2018-18 — provisions restricting the tax benefits of Carried Interest, relevant to hedge fund managers.   He is the only tax attorney in the nation to have litigated the scope and meaning of the critical “corporation” term found pervasively across about 600 Code Sections and in new section 1061(c)(4)(A).  In that litigation, DOJ/IRS took incoherent positions, inconsistent with the IRS’s announced view in Notice 2018-18.  Opinions issued by the federal courts of appeals in those litigated cases, in which Tom filed over 20 briefs, reflect holdings about the “unambiguous” meaning of “corporation” that are fundamentally inconsistent with Notice 2018-18.

Recently, Tom reviewed the new Opportunity Zone legislation at the request of a potential investor.  Tom has been called upon to provide advice on immigration matters and Social Security benefit matters.  Recently, he formulated a tax-based argument against a reduction of Medicare benefits under an IRMAA adjustment.  Tom is knowledgeable about litigation finance for tax cases, and published the first article ever on the subject.

Tom’s resume displays an intellectual bent. He is the co-author (revisor) of the definitive BNA Tax Management Portfolio (TMP) No. 524, Deductibility of Illegal Payments, Fines and Penalties.  He also is the co-author (revisor) of the chapter of BNA/Bloomberg’s Tax Practice Series (TPS) that addresses IRS audits, assessments, and appeals.   The TMP publication includes a chapter on the Foreign Corrupt Practices Acts (FCPA), which has ever-increasing importance for companies with multinational operations. Further evidence of his intellectual bent is that while he was a law student at Ohio State, he wrote an article on Wisconsin Rule of Evidence 407 that appeared in the Ohio State Law Journal, his law school’s flagship publication.  Tom might be called a “thought leader:” over the years, he has published extensively, and his writings have been cited by the Supreme Court of Wisconsin; in several leading tax treatises; and in the American University Law Review, the Creighton University Law Review, the Marquette Law Review, the Nebraska Law Review, the Ohio State Law Journal, the University of Cincinnati Law Review, the University of Miami Law Review, the New York University School of Law Tax Law Review, and the University of Southern California Law Review.  Tom has been a frequent media quote source for prominent national publications addressing tax issues of the day.

In January 2022, Tom published, in a premier national tax publication, the first article ever on the impact of new FinCEN “beneficial ownership” filing obligations, imposed on 30 million small businesses, by 2021’s Corporate Transparency Act.

Tom has long been professionally active with respect to a rapidly evolving field that has become critically important to tax professionals:  the standards applicable to whether Treasury Regulations are authorized and valid, particularly under so-called Chevron Steps Zero, One, and Two.  Tom published his first articles in this field back in 2001 (Chevron Step Zero) and 2003 (Chevron Step One).  In 2011, he guided the briefing of a case that held a Treasury Regulation invalid under Step One. In a recent case, his Chevron-related arguments (all steps) prompted the U.S. Department of Justice to eschew, on brief in the Second Circuit, any reliance on a Treasury Regulation that had never been held invalid in any court — a move that is believed to be entirely without precedent.  Tom has recently litigated cases presenting Chevron issues, including a  class-action suit seeking about roughly $500 million.  Chevron will be involved in litigating cases challenging the government’s position as to new Code section 1061(c)(4)(A) set out in IRS Notice 2018-18 and the ensuing regulations.

In recognition of his tax-focused contributions, Tom recently was again named an Illinois Super Lawyer in Tax for 2021.  Thirteen times Tom has been named an Illinois Super Lawyer in Tax (i.e., Top 5% as ranked by peers):  2005, 2007, 2010, 2011, 2013-2021.  He is now listed among Washington state Super Lawyers.  He often was named a Leading Illinois Lawyer in Tax Law–Business by the Leading Lawyers Network, including for 2019-2022 (again, Top 5% as ranked by peers); and named for his work in the tax controversy field in the 2007 and the 2010 and 2011 editions of The Legal 500.  While at the U.S. Department of Justice’s Tax Division in Washington, D.C., Tom received its Outstanding Attorney Award in 1986, 1988, 1991 and 1997, before leaving a GM-15 supervisory post for private practice in D.C. in 1998.  He thus received repeated formal accolades, from peers, in both DC and Illinois.

Tom formerly was a tax partner, or a tax shareholder, with the Chicago offices of two of the nation’s largest and most prestigious law firms.  After leaving the U.S. Department of Justice’s Tax Division in 1998, after 14 years, he immediately became a partner with a “K Street” tax boutique in Washington, D.C.  Tom’s nationwide federal tax practice thus brings with it the acumen and connections of a Washington-based “tax insider,” coupled with a complex-litigation resume of the highest order.

In short, Tom brings a recognition-winning, $1,000-per-hour “big firm resume,” with an intense “360-degree” tax and complex-litigation perspective, to a smaller, more nimble, much less expensive, and extremely efficient “boutique” setting – a setting unencumbered by bureaucracy, firm-generated conflicts of interest, high overhead,  the dreaded $1,000-per-hour rate, and the all-too-frequent, rate-hiking foreign offices.

Tom believes that taxpayers needing a lawyer will make better decisions when they have access to information that goes well beyond the platitudinous boilerplate found on many law firm websites.

Practice Areas 

Tom generally limits his nationwide law practice to federal tax matters:

  • Federal Trial- and Appellate-Court Tax Litigation
  • Matters before the IRS.  Holds a PTIN from the IRS, authorizing him to prepare, and supervise the preparation of, amended tax returns, claims for tax refund, and original tax returns.
  • Matters before the U.S. Treasury Department, including the filing of delinquent FBARs with its FinCEN operation in Detroit.
  • Matters before the U.S. Department of Justice, including the defense of Criminal and Quasi-Criminal Investigations
  • Matters before other federal agencies, such as the Social Security Administration or the Department of Labor
  • All types of matters, tax and non-tax, in Illinois, Wisconsin, and DC — three states where he has long held active state bar licenses.

Education  

  • J.D., The Ohio State University, Moritz College of Law, 1979.  Published student note in Ohio State Law Review, 41 Ohio St. 211 (1980).
  • B.A., magna cum laude, University of Wisconsin, Eau Claire, 1976

Bar Admissions

  • Actively licensed in Wisconsin (since 1979), the District of Columbia (since 1998), and Illinois (since 2002).  Not licensed for Washington state-law matters.
  • U.S. Court of Appeals for the Second Circuit
  • U.S. Court of Appeals for the Sixth Circuit
  • U.S. Court of Appeals for the Seventh Circuit
  • U.S. Court of Appeals for the Tenth Circuit
  • U.S. Court of Appeals for the Eleventh Circuit
  • U.S. Court of Appeals for the Federal Circuit
  • U.S. District Court, Northern District of Illinois
  • Trial Bar, U.S. District Court, Northern District of Illinois
  • U.S. District Court, Central District of Illinois
  • U.S. District Court, Eastern District of Wisconsin
  • U.S. District Court, Western District of Wisconsin
  • U.S. District Court for the Eastern District of Michigan
  • U.S. Tax Court
  • U.S. Court of Federal Claims
  • U.S. Supreme Court

Professional Memberships

  • Member, Tax Advisory Board, John Marshall Law School, 2008-2014
  • Member, Legal Committee and Safety Committee, Union League Boys & Girls Clubs of Chicago, 2011-2016
  • Board of Governors, Court of Federal Claims Bar Association, 2001-2003

Professional Recognition

  • Profiled, The Ohio State University Moritz College of Law’s All Rise Magazine, Winter 2013
  • Illinois Super Lawyer for Tax, 2005, 2007, 2010-2011, 2013-2021 — ranked by peers among Top 5% of Tax Lawyers (all types); Illinois Super Lawyer for Appellate, 2017.  Now listed among Washington state Super Lawyers for all of these years.
  • Listed, The Legal 500, United States, 2007, 2010-2011.  In 2010, listed for practice in the medical-resident FICA field.
  • Listed, Leading Lawyers Network (Illinois), Tax Law — Business (again, Top 5% as selected by Illinois peers), including for 2019-2022.
  • Selected as one of Illinois’ Top 100 High-Stakes Litigators for 2020 and 2021, a non-compensated selection limited to 0.5 percent of all litigators.
  • Rated “Superb” (10.0/10) among tax lawyers by the AVVO algorithmic  lawyer-rating website
  • Outstanding Attorney Award, U.S. Department of Justice, Tax Division, Washington, D.C., 1986, 1988, 1991, 1997
  • Promoted into ascending supervisory, competitive, civil-service positions (GM-15) at the Tax Division, U.S. Department of Justice, Washington, D.C., 1991 and 1997

Pro Bono

  • Appointed by a U.S. district judge to act as lead counsel for the plaintiff in an employment-discrimination case
  • Lead counsel in Cook County Circuit Court in a case where he successfully represented an artist involved a contract dispute
  • Judging by invitation at annual ABA Moot Court competitions
  • Assisting in a dispute with SSA over Medicare benefits

Maybe Ask, What Other Tax-Dispute Lawyer Has This?

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Office Location

Law Offices of Thomas D. Sykes PLLC

16625 Redmond Way Ste. M #151, Redmond, WA, 98052, US