James R. Malone Jr.

James R. Malone, Jr. is a Principal in the firm’s Tax Controversy Practice Group, representing clients in disputes with federal, state, and local tax authorities in both administrative proceedings and in court: His clients include businesses, non-profits, individual taxpayers, accountants, and tax preparers.

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Representative Federal Tax Matters

• Successful representation of employer in connection with reporting of medical insurance coverage resulted in the complete abatement of the penalty for improper filing.
• Successfully concluded an audit reconsideration representation for a taxpayer who owed the IRS over $2.4 million for five tax years. The IRS agreed to audit adjustments that reduced that amount to zero. The client may actually receive a refund after being subjected to enforced collection for several years.
• Represented a taxpayer with multiple years of unfiled returns; the client was the subject of a $400,000 federal tax lien and on-going collection activity in the form of levies. Result: The taxpayer’s liability was reduced to zero.
• Represented a business owner in audit and before the Tax Court. Result: The case settled with a 30% reduction in tax due for one year and the elimination of accuracy-related penalties for all years at issue.
• Represented a client with long-standing payroll tax liabilities and unfiled personal returns. Result: The IRS agreed to compromise a substantial portion of the client’s payroll tax liability.
   

Representative State & Local Tax Matters

• Representation of former resident of Pennsylvania in a domicile dispute, which was the client’s second attempt to have the Department of Revenue recognize her Florida domicile. We prevailed on administrative appeal, and the Commonwealth did not elect to seek judicial review.
• Represented the U.S. affiliate of a major multi-national corporation that was the subject of a local mercantile tax assessment of $250,000 with additional exposure for the current and future tax years. Prosecuted a challenge to the assessment under relevant state law and the dormant commerce clause. Result: Settled for $5,000.
• Represented the owner and manager of restaurant that had been sold. When the local tax authority sought collection from our clients, we named the purchasers as additional defendants and mounted a vigorous defense against the merits of the relevant tax assessment. Result: The municipality agreed to significantly reduce its overall tax claim, and we reached an agreement with the purchasers that limited our client’s overall responsibility to contribute to the settlement significantly.
• Represented a manufacturing company in an administrative appeal of a penalty assessment for failure to file a timely return. Result: Complete abatement of the penalty.
• Represented a local non-profit that was denied a sales and use tax exemption. Result: Overturned on administrative appeal.
• Represented a business that had failed to register with the local tax authority or pay business privilege taxes for a decade. Result: The municipality agreed to waive the tax claims for half of the period and to abate all of the interest and penalties.

• Quoted in, "State of Wayfair: Philly Uses Case to Grab Business Income," Bloomberg Law (January 31, 2019)
  Reproduced with permission. Published January 31, 2019. Copyright 2019 by The Bureau of National Affairs, Inc. (800-372-1033)
• Quoted in, "Court to Facebook: No enforceable right to access IRS Appeals," MLEX US Tax Watch (June 8, 2018)
• Quoted in, "Wells Fargo Penalty Makes Waves for Tax Professionals," Bloomberg BNA's Daily Tax Report (May 30, 2017)
• Quoted in, "After Judge OKs Philly Sugary Drink Tax, Appeal May Bring Thorny Legal Battle," WHYY/Newsworks (December 20, 2016) 
• Quoted in, "Can Foreign Tax Credits Be Excepted From Economic Substance?," Bloomberg BNA Daily Tax Report (December 14, 2016)
• Quoted in, "Wells Fargo Lacked Business Purpose in Tax Credit Deal: Jury," Bloomberg BNA Daily Tax Report (November 18, 2016)
• Quoted in, "Commonwealth Court Grants Tax Exemption to Monroe Co. Theater," The Pennsylvania Record (May 13, 2016)
• Quoted in, "What to Look for in Enforcement," Tax Notes (Feb. 1, 2016)
• Quoted in, “$3.9M Refund to Sprint Subsidiary Signals Potential Relief for Corporate Taxpayers,” Bloomberg BNA Daily Tax Report (Dec. 7, 2015)

• "How Employment Tax Rules Are Changing During Pandemic," Law360 (April 22, 2020)
• "The Families First Coronavirus Response Act: What Employers Need to Know," The Legal Intelligencer (March 30, 2020)
• "Rubbing SALT in a Wound? A Look at the Potential State and Local Tax Implications of Telemedicine," American Health Lawyers Association (AHLA) Connections (August 2018) (© Copyright 2018, American Health Lawyers Association, Washington, DC. Reprint permission granted.)
• "9th Circ. Slone Ruling Considers Basis Of Transferee Liability," Law360 (August 1, 2018)
• "What Does the New Tax Law Mean for Physicians and Medical Practices?," Medical Mutual's MedNotes Blog (February 15, 2018)
• "Tax-Exempt Organizations Face A New Excise Tax," Law360 (February 7, 2018)
• "Changes in Partnership Audit Procedures Call for Changes in Partnership Agreements," The Legal Intelligencer (December 18, 2017)
• “All Partners Are Small Partners: The Due Process Implications of the New Partnership Audit Regime,” 19 Journal of Tax Practice and Procedure, 17 (April 21, 2017).
• “Employment Taxes: A Look at Changing Enforcement Patterns,” HospitalityLawyer’s CONVERGE Blog (March 23, 2017)
• "Taxation of Long-term Contracts: Little Pigs, the IRS, and the Completed-Contract Method," Temple 10-Q (October 21, 2016)
• “IRS Third-Party Collection Tough on Targets,” Pennsylvania CPA Journal (Summer 2014)
• “New Standards for Equitable Relief in Innocent Spouse Cases,” The Legal Intelligencer (March 20, 2012)
• “Divorce and Taxes: An Overview of Innocent Spouse Relief under the Internal Revenue Code,” The Legal Intelligencer (2011)