Media Mentions
2009
David Ivill was quoted by Crain’s Health Pulse in an October 20 story about litigation decisions that will enable New York State teaching hospitals to get refunds of FICA taxes that they had paid on medical residents’ stipends. McDermott represented two hospitals that won their challenges against the IRS in the Second Circuit Court, which upheld the student tax exemption for residents and their hospital employers. “The Second Circuit cases should help us shake loose settlements for the taxpayers” covered by the decision, noted Mr. Ivill, who worked on the cases with McDermott partner Thomas Sykes.
David S. Ivill, Thomas D. Sykes, Health, Nonprofit Organizations
Thomas Sykes commented for Tax Analysts (August 10) on the District of Columbia Circuit’s decision in the Cohen v. Commissioner tax case. The decision revived a taxpayer’s claim that the telephone excise tax refund process used by the IRS does not comply with the Administrative Procedures Act (APA). Mr. Sykes considers the case to be “unusual” because “[i]t’s a rare thing for a court to brush aside the Anti-Injunction Act, brush aside the Declaratory Judgment Act, and proceed under the APA to examine an IRS pronouncement.” Plaintiff Cohen claimed that the IRS procedures wrongfully limited refunds and Mr. Sykes agreed, calling the IRS settlement terms “a low-ball.” He added, “When I read … that only half the money that government experts thought was attributable to this [IRS refund formula], I was not at all surprised.”
Thomas D. Sykes, Tax, Tax Cases
2007
Tom Sykes was quoted in the June 1 issue of The Trusted Professional about the recent U.S. Supreme Court decision in KSR International Co. v. Teleflex, Inc. on the patentability of tax strategies. Mr. Sykes noted that the decision "is good news for tax practitioners who are concerned about the emergence of tax strategy patents."
Thomas D. Sykes, Tax, Tax Controversy
2006
On October 25 on AccountingWEB.com, an article on the patenting of tax strategies references the article, "Whose Tax Law Is It?" by Paul Devinsky and Thomas Sykes published in the October 16 issue of Legal Times. The article references the authors' statement that tax patents could lead to unequal treatment under the tax code, becoming "government issued barbed wire" for some taxpayers.
Paul Devinsky, Thomas D. Sykes, Intellectual Property, Tax
On Friday, October 20, the front page of The New York Times business section included an article on the patenting of tax strategies with a significant reference to the article, "Whose Tax Law Is It?" by Paul Devinsky and Thomas Sykes published in the October 16 issue of Legal Times. This article also appeared in the International Herald Tribune on October 19 and the Kansas City Star on October 25.
Paul Devinsky, Thomas D. Sykes, Intellectual Property, Tax
Thomas Sykes was quoted in the October 2006 issue of The Chicago Lawyer in the article, "Patent attorneys, tax advisers square off over patenting tax strategies," about the controversy growing out of a surge in patents being granted for specific tax planning techniques. "Patents are allowing people to own a piece of the law. One arm of government is granting the tax benefit [while] another hand of government is taking away from it. It just runs counter to every instinct I think most of us have as to how law ought to work," Mr. Sykes said.
Thomas D. Sykes, Intellectual Property, Tax
Thomas Sykes was quoted in the October 1 issue of Financial Advisor magazine on the implications of granting patents for tax reduction methods. "For many strategies you consider that haven't been in the public domain for very long, you'll have to perform due diligence to make sure someone hasn’t patented them. It would be a major burden," Mr. Sykes said.
Thomas D. Sykes, Intellectual Property, Tax
Tom Sykes was quoted in the September 1 issue of Tax Notes Today about the IRS' announcement that individual taxpayers can claim a telephone excise tax refund of between $30-$60, depending on family size without having to backup their refund claim with proof of the actual tax paid. Mr. Sykes said, "the standard amount under the August 31 IRS announcement might be overly generous to a residential subscriber who had a landline but not a cell phone throughout the 41-month period. But adding in taxes paid on cell phone service for just one line might bring the amount of tax paid over the past three years to over $70."
Thomas D. Sykes, Tax, Tax - Telecom
Thomas Sykes was quoted in the July 24 edition of The Ledger about the demise of the phone tax. "Usually the government gives up after two or three circuit court losses. Here the IRS has been standing firm and hoping to win one of the active cases it has pending in other circuits so it can go before the Supreme Court," he said.
Tom Sykes was quoted in the July 6 issue of the Tax Notes Today and the July 10 issue of Tax Notes in an article about how the IRS procedures for claiming refunds of telephone excise tax paid on long-distance service could undercut the ability of many taxpayers to receive timely refunds, or any at all, of amounts the Treasury Department has admitted it should never have collected. "The requirement that refund claims be made on taxpayers' 2006 return could easily delay final resolution of refund claims for corporations for four or five years," Mr. Sykes said. "The IRS has at least three years after the 2006 return is filed (in 2007) in which to examine the items on the return and companies and the IRS routinely agree to extensions of that three-year [statute of limitation], pushing finality out even further, he added.
Thomas D. Sykes, Tax, Tax - Telecom
Tom Sykes was quoted in the May 29 issue of the Tax Notes in an article about how the Treasury Department will finally abolish the telephone excise tax and will issue refunds to taxpayers for taxes paid on the disputed charges for the last three years. The new policy extends to wireless telephone services. "It surprises me, pleasantly, that the IRS gave up preemptively on wireless, in view of both the revenue involved and the fact that none of the decided cases addresses wireless," Mr. Sykes said.
Thomas D. Sykes, Tax, Tax - Telecom
Thomas Sykes was quoted in the May 26 issue of the Tax Notes Today in an article about how the Treasury Department will finally abolish the telephone excise tax and will issue refunds to taxpayers for taxes paid on the disputed charges for the last three years. The new policy extends to wireless telephone services. "It surprises me, pleasantly, that the IRS gave up preemptively on wireless, in view of both the revenue involved and the fact that none of the decided cases addresses wireless," Mr. Sykes said.
Thomas Sykes was quoted in the May 26 issue of The Baltimore Sun in an article about how the government will finally abolish the telephone excise tax. "They had no choice but to end this tax," Mr. Sykes said. "It's not like Congress hasn't looked at this tax since 1898. The tax was actually overhauled by Congress in 1965. They were going to phase it out in 1969, but Congress couldn't resist the lure of the money. It became permanent in the 1990s," he added.
Tom Sykes was quoted in the May 1 issue of Tax Notes Today in an article about how the Justice Department's Tax Division is refusing to give up the fight over the telephone excise tax despite its 11th straight loss and its 4th loss at the appeals level. The Second Circuit Court of Appeals ruled in April 27 in Fortis v. United States that the tax does not apply to certain flat-rate per-minute long-distance services. "The Department of Justice's opposition to the taxpayer's summary judgment motion appears to be designed just to buy time," said Mr. Sykes.
Tom Sykes was quoted April 20 in an article on CNNMoney.com about how the IRS has had a rough time defending a three percent tax on long-distance calls that dates from the Spanish-American War-its record is a painful one lower-court win and 10 losses, three of them in circuit courts and seven in lower courts. "Usually the government gives up after two or three circuit court losses," said Mr. Sykes. "Here the IRS has been standing firm and hoping to win one of the active cases it has pending in other circuits so it can go before the Supreme Court," he added.
Tom Sykes was quoted in the February 15 issue of Tax Notes Today in an article about a second class-action suit filed, challenging the IRS's ongoing enforcement of the telephone excise tax in light of a mounting number of federal court rulings declaring it invalid as applied to long-distance services for which charges did not vary by both the distance and duration of a call. The complaint seeks a writ of mandamus against the IRS on grounds that its actions exceed its authority and violate administrative and constitutional law (Krasney v. U.S.). "The Krasney complaint is notable on one level because it seeks mandamus and declaratory relief. But the Court of Federal Claims has limited equitable powers, in comparison to the equitable powers possessed by U.S. district courts," Mr. Sykes said.
2005
Tom Sykes was extensively quoted in the December 13 issue of Tax Notes Today in an article about how the IRS is under increasing pressure from war protesters, large companies and long-distance telecommunications companies for its continuing enforcement of the telephone service excise tax. "The IRS is persisting in enforcing the excise tax despite" a staggering losing streak said Mr. Sykes. "All of the IRS has to show at this point is a dissenting opinion of one circuit judge," he added.
Tom Sykes was quoted in the February 7 issue of the Daily Tax Report in an article regarding the future of the telephone excise tax and the possibility of its expansion to include emerging technologies such as broadband access. Current tax provisions enacted before the development of most modern technology levy a three percent tax on local telephone service and toll telephone service. However, Tom stated that he expects at least another year or two will pass as litigations proceed before a decision could be reached. "If Congress sees the billing plans that are giving rise to litigation being phased out, they may feel less urgency about the need to fix this," he said.
2004
Thomas Sykes' article, "The Growing Controversy Over Federal Excise Tax on Long-Distance Calls," in the May-June 2003 issue of The Tax Executive, was recently quoted in the January 12, 2004 issue of Tax Notes in the article, "Is the Telephone Tax About to Unravel?" In Mr. Sykes' article, he points out the real motivation behind the IRS' proposed regulations: "In recent years, many businesses using large amounts of long-distance services have been seeking refunds from the IRS, on the basis that these services do not come within the terms of the statute imposing the tax. The IRS is now moving to arm itself for litigation over the applicability of the tax to long-distance services."
