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 in 2009. A practicing attorney for over 40 years, both in the public and private sectors, not only is Mr. Korb widely recognized as one of the country’s foremost tax lawyers, his reputation extends outside the U.S. as well; for example, in October 2012, Mr. Korb was spotlighted in the U.K. Tax Journal in its “One minute with . . .” column, one of the very few U.S. tax lawyers ever profiled in that U.K. publication.
Public Sector Practice and Tenure with the Internal Revenue Service
As Chief Counsel (2004-2008), Mr. Korb was the chief law officer for the IRS, supervising approximately 1,500 attorneys who were assigned to the IRS National Office and among the major operational divisions of the agency. He played a prominent role in increasing the effectiveness of the Chief Counsel’s Office, and is best known for developing the litigation strategy that led to the stunning success by the government in litigating tax shelter cases during his almost five-year tenure.
Among the individual matters with which he was personally involved 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.
Prior to becoming the IRS Chief Counsel in 2004, Mr. Korb previously worked twice before in the public sector, having spent more than two years as an Assistant to the Commissioner of Internal Revenue in the mid-1980s (when 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, at the beginning of his career, four years as an attorney adviser in the IRS Chief Counsel’s Office.
Private Sector Practice and Extensive Ongoing Tax Controversy Experience
In addition to his notable tenure in the public sector, Mr. Korb has over 28 years of private practice experience, the majority of it as a tax partner at Thompson Hine, including serving as chairman of that firm’s tax group. He was primarily responsible for developing Thompson Hine’s national tax controversy practice but also advised clients on major transactions and obtained rulings and other technical guidance from the IRS National Office.
Most of Mr. Korb’s private practice experience has consisted of tax controversy matters, including a significant number of tax fraud and tax penalty cases, all of which resulted in a significant reduction in the IRS’s initial assessments and/or the elimination of the penalties. Some of the clients Mr. Korb has represented or currently represents include a rock star; a symphony orchestra; some of the world’s largest financial institutions and brokerage firms; a major airline; national retailers; several of the nation’s largest real estate developers; large multinational manufacturing, publishing, computer software, distribution, entertainment, water and construction corporations, some of which are headquartered outside of the U.S.; tax exempt entities; and closely held business entities in the fast food, automobile dealership and healthcare industries.
Mr. Korb has recently represented, or is currently representing, clients in a number of cases at both the IRS examination and appeals levels. The issues involved in these cases include:
- Transfer pricing
- Section 162(f) fines or penalties
- Worthless stock deductions
- Transferee liability in intermediary transactions
- Section 861 allocation issues
- Subpart F issues
Mr. Korb has represented individuals who are being examined as part of the new IRS Global High Wealth Industry Group in LB&I, as well as negotiating Offers of Compromise with the IRS SB/SE Division. He has also advised two clients that have been the target of individuals taking advantage of the IRS Whistleblowers Program on how to prepare for the contemplated examination by the IRS LB&I Division.
Tax controversy achievements include:
- Obtained 100 percent IRS concession of an almost $3 billion proposed assessment of tax, penalties and interest for a non-U.S. multinational company with respect to a debt/equity issue.
- Resolved transfer pricing dispute for a non-U.S. multinational company where the amount in issue exceeded $450 million in tax and interest for less than $12 million.
- Obtained a no change result at IRS Appeals of almost $100 million in tax and interest for a domestic company with respect to a Section 162(f) fine or penalty issue.
- Obtained a multi-million dollar refund for a non-U.S. bank in a case where the IRS argued that the claim for refund was untimely because the statute of limitations had expired.
- Obtained a multi-million dollar refund for a telecommunications company with respect to 1986 Tax Act transition investment tax credits on capital improvements.
- Obtained a 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 at IRS Appeals.
- Handled an IRS appeals case for an Ohio property and casualty insurance company where the 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 the IRS.
- Eliminated multi-million dollars in ERISA penalties asserted by the IRS against a major U.S. airline.
- Eliminated multi-million dollars in backup withholding penalties asserted by the 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.
- 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. Finally, he has helped candidates for senior Executive Branch appointments with the nomination/confirmation process, and in particular has advised them how to deal with tax issues that could conceivably derail their nomination.
Writing and Speaking Engagements
Mr. Korb frequently writes and publishes articles regarding national and international tax controversy and dispute resolution issues. Recent notable articles include:
- “IRS Issues Directive Revising the Information Document Request Enforcement Process for LBI Examinations” in Bloomberg BNA’s Daily Tax Report (November 20, 2013)
- G-8 Declaration Latest in International Movement to increase Tax-Related Disclosures and to limit Cross-Border "Tax Arbitrage," in Practical Information Tax Strategies (June 30, 2013)
- “One minute with . . .” interview, in U.K. Tax Journal (October 2012)
- “The Increasing Demands on US Tax Advisers,” in U.K. Tax Journal (July 2012)
- “Final Section 482 Cost Sharing Regulations: A Renewed Commitment to the Income Method,” in BNA Tax Management Transfer Pricing Report (January 2012)
- “Brazilian Legislation Proposes to Allow Administrative Settlement of Tax Disputes,” in both Latin American Law & Business Report and Practical Latin American Tax Strategies (February 2011)
- “Why Tax Authorities Need to Respect Client Privilege,” in International Tax Review (December 2010/January 2011)
- “The IRS Uncertain Tax Position Initiative,” in U.K. Tax Journal (November 2010)
- “The Four Rs Revisited: Regulations, Rulings, Reliance and Retroactivity in the 21st Century – A View From Within,” in CCH’s Taxes – The Tax Magazine (an August 2009 update of former IRS Chief Counsel Mitchell Rogovin’s important 1965 treatise)
Mr. Korb also speaks on a variety of topics, including at events sponsored by the American Bar Association, Tax Executives Institute, Practising Law Institute, International Fiscal Association and many other organizations. Notably, while Chief Counsel for the IRS, Mr. Korb gave more than 250 speeches or public presentations. Some of the recent presentations are:
- “How Do You Put a Cross Border Debt/Equity Case Together?” At the International Fiscal Association (November, 2013, Washington) and at the Tax Executives Institute, New York Chapter 49th Annual Symposium (December 2012, New York)
- “Nuts and Bolts of a Partnership Tax Controversy,” at Practising Law Institute’s Tax Planning for Domestic & Foreign Partnerships, LLCs, Joint Ventures and Other Strategic Alliances 2013 (May 2013, New York)
- “Exploring the Limits of the Evolving Economic Substance and Related Doctrines,” at Practising Law Institute’s Tax Strategies for Corporate Acquisitions, Business Purpose Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations and Restructurings (December 2013, Los Angeles)
- “HMRC and the Taxpayer: Settlements and the Exercise of Discretion,” at the Institute for Fiscal Studies (September 2012, Cambridge, U.K.)
- “Tax Controversy and Hot Audit Topics,” at the Tax Executives Institute New York Chapter 48th Annual Symposium (December 2011, New York)
- “The Legal Privilege for Tax Advice,” at the 64th Annual Congress of the International Fiscal Association (September 2010, Rome)
Other Professional Activities
- American College of Tax Counsel – Fellow (1995-present); Regent (2001-2004)
- Section of Taxation, American Bar Association – Member (1978-present); Chair, Administrative Practice Committee (1992-1994); Council Director (1996-1999); Vice Chair, Committee Operations (2000-2002); LMSB Division Coordinator (2003-2004)
- Cleveland Tax Institute – Arrangements Committee Chair (1981); Program Chair (1993); Vice Chair (1994); Chair (1995)
- Ohio State Tax Commissioner’s Advisory Council – Member (2000-2003)
- Ohio Secretary of State Operations Review Team – Member (1999)
- The National Commission on Economic Growth and Tax Reform (the “Kemp Commission”) – Tax Adviser (1995)
Mr. Korb has also taught many individual tax law classes and seminars at law schools, including at the University of Cambridge, Université de Paris II Pantheon Assas (Sorbonne), California-Berkeley, Chicago, Columbia, Florida, Georgetown, Harvard, Michigan, NYU, Stanford, UCLA, Virginia and Yale. He also taught a session on "An Introduction to the U.S. Federal Tax System" to the Chinese tax authority (State Administration of Taxation (SAT)) in Shanghai, China in the summer of 2011.
Rankings and Recognitions
- Chambers USA – ranked as a leading lawyer in Tax (Washington, D.C.) (2009-2013) and Tax Controversy (National) (2010-2013)
- International Tax Review’s Tax Disputes/Controversy Leaders Guide – recognized in the inaugural and subsequent editions as a leading lawyer in the field of tax disputes and controversy (2011, 2013)
- The Best Lawyers in America – recognized as a leading lawyer for Tax for over 25 years (1989-2014)
- The Legal 500, United States – recommended lawyer for Tax Controversy (2010-2013)