Former chief counsel for the Internal Revenue Service, Donald L. Korb joined Sullivan & Cromwell as a partner and the head of the Firm’s Tax Controversy Practice on January 1, 2009. A practicing attorney for over 35 years, both in the public and private sectors, Mr. Korb, widely recognized as one of the country’s foremost tax lawyers, played a prominent role in increasing the effectiveness of the IRS Chief Counsel’s Office during his four-and-a-half-year tenure there.
Prior to joining the IRS as chief counsel in 2004, Mr. Korb was a partner at Thompson Hine where he had once served as chairman of the tax group. He was primarily responsible for developing Thompson Hine’s tax controversy practice and also advised clients on major transactions and obtained rulings and other technical guidance from the IRS National Office.
In addition to almost 25 years of private practice experience, Mr. Korb also previously worked twice in the public sector, having spent more than two years as an assistant to the commissioner of Internal Revenue in the mid-1980s (where he was the overall coordinator of the IRS’s involvement in the legislative process that resulted in the enactment of the landmark Tax Reform Act of 1986) and, earlier in his career, four years as an attorney advisor in the IRS Chief Counsel’s Office.
As chief counsel, Mr. Korb was the chief law officer for the IRS, supervising approximately 1500 attorneys who were assigned to the IRS National Office and among the major operational divisions of the agency. He is best known for developing the litigation strategy that led to the stunning success by the government in litigating tax shelter cases over the past four years.
Among the individual matters he was personally involved in while chief counsel was serving as the lead negotiator in resolving a landmark transfer pricing dispute. As part of the settlement, the taxpayer made the largest single payment ever made to the IRS to resolve a tax dispute.
During his many years of private practice experience, most of which were spent handling tax controversy matters, the clients Mr. Korb represented included a rock star, a symphony orchestra, some of the nation’s largest financial institutions and brokerage firms, a major airline, a national retailer, several of the nation’s largest real estate developers, large multinational manufacturing and construction corporations, tax exempt entities, and small closely held business entities in the fast food, distribution, automobile dealership and healthcare industries.
Among the matters Mr. Korb handled were a significant number of tax fraud and tax penalty cases, all of which resulted in either the elimination of the penalties or a significant reduction in the IRS’s initial assessments.
Specific examples of tax controversy matters include:
- Obtained multi-million dollar refund for a telecommunications company with respect to 1986 Tax Act transition investment tax credits on capital improvements.
- Obtained multi-million dollar refund for a national retailer for a specified liability loss deduction.
- Settled a personal holding company issue for a large national shopping center developer.
- Handled IRS appeals case for Ohio property and casualty insurance company where IRS conceded 100% of a complicated reserve issue.
- Negotiated a closing agreement resulting in the recovery of a multi-million dollar refund attributable to excessive payments of deficiency interest by a large manufacturing company to IRS.
- Eliminated multi-million dollars in ERISA penalties asserted by IRS against a major U.S. airline.
- Eliminated multi-million dollars in backup withholding penalties asserted by IRS against several major financial institutions.
- Settled COLI interest deduction issues for five large multinational companies in the manufacturing, telecommunications and retail industries.
- Developed a novel legal theory that persuaded a U.S. Bankruptcy Court, in a case of first impression, to award a tax refund to a former subsidiary of a bankrupt parent corporation.
- Represented financial institutions in IRS examinations of BOLI issues.
- Eliminated over $1 million in proposed tax by the IRS concerning the proper application of statistical sampling techniques to the calculation of LIFO pricing index.
Additionally, Mr. Korb has been involved in the planning of many transactions, including financings, mergers, acquisitions and dispositions of assets and workouts of distressed companies. Over the years, he has formed numerous partnerships, joint ventures and limited liability companies. He also has assisted taxpayers in influencing the direction of tax policy at both the administrative and Congressional levels, including testifying before Congress. In addition, he has obtained many private letter rulings for clients, a number of which were obtained on a very expedited basis.