Emory University, B.A. 1979
University of Wisconsin School of Law, J.D., 1982
New York University School of Law, LL.M. (Taxation), 1984
Listed, Chambers USA: America's Leading Lawyers for Business (2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017)
Listed, The Legal 500 U.S. – Tax Controversy (2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015)
Outstanding Attorney Award – U.S. Department of Justice, Tax Division (1990)
Member, J. Edgar Murdock American Inns of Court (U.S. Tax Court) (1994-1996)
U.S. Supreme Court
U.S. Court of Appeals for the Fourth, Seventh, Eighth and Federal Circuits
U.S. Tax Court
U.S. Court of Federal Claims
U.S. District Court for the Eastern District of Pennsylvania
U.S. District Court for the District of Columbia
U.S. District Court for the District of Connecticut
U.S. Court of International Trade
Philip Karter specializes in tax controversy and tax litigation matters. In his 32-year career, Mr. Karter has litigated Federal tax cases in the United States District Courts, the United States Tax Court and the United States Court of Federal Claims, and argued in the United States Court of Appeals in multiple circuits. His range of trial experience, which includes dozens of jury and non-jury cases tried to judgment, encompasses a wide variety of complex and high-profile tax matters, a number of which have involved issues of first impression. Mr. Karter's deep experience in the tax controversy and litigation process, working both for and against the government, also provides him with valuable insights on how to structure and document transactions to avoid future tax disputes or, if such disputes are inevitable, to position such transactions in the best possible light to successfully withstand IRS scrutiny and challenge.
Representative examples of tax controversy and litigation matters/issues handled by Mr. Karter include:
- Hostile takeover expenses
- Basis shifting and other tax reduction transactions
- Tansfer pricing adjustments
- Worthless stock losses
- Captive insurance arrangements
- Income, estate and gift tax valuation issues
- Disguised sales and other partner/partnership recharacterizations
- Debt-equity swaps and other financial product issues
- Greenmail payments
- Foreign tax credits
- Rehabilitation tax credits, low-income housing tax credits, and economic development credits
- Transition rule tax credits
- § 162(m) qualified performance-based compensation
- Unpaid trust fund taxes under § 6672 (Trust Fund Recovery Penalty ("TFRP"))
- Treatment as employee or independent contractor
- § 7805(b) retroactivity of regulations and disparate treatment
- §183 hobby losses
- Timber depletion
- Coal excise taxes
- Mitigation of limitations (§§ 1311 - 1314)
- Res judicata and collateral estoppel
- Interest recomputations and netting
- IRS summons enforcement proceedings
- Tax penalty issues
Mr. Karter has handled countless other tax controversy matters for clients ranging from Fortune 500 companies to small businesses, joint ventures and individuals that were resolved with the IRS at the examination level, administrative appeals or through alternative dispute resolution (ADR). In addition to representing taxpayers in all phases of tax audits, appeals and litigation, he represents individual taxpayers in the following areas:
- Offers in compromise
- Installment payment agreements
- Tax lien and levy releases
- Collection Due Process (CDP) proceedings, appeals and Tax Court litigation
- Wrongful levy claims
- Failure to honor levy actions
- Erroneous refund actions
- Innocent spouse relief and equitable relief under § 6015(f)
- Foreign financial account reporting requirements, including OVDP submissions
- Eggshell audits
- Taxpayer Advocate Service (TAS) submissions
Prior to joining Chamberlain Hrdlicka in 2007, Mr. Karter was a partner at Miller & Chevalier and formerly served as a trial attorney with the U.S. Department of Justice Tax Division, where he was honored with the Department's Outstanding Attorney Award. Mr. Karter is one of a select number of attorneys recognized as a national authority in tax controversy and litigation in Chambers USA and the US Legal 500 Litigation and Tax Guides. He is also ranked as a 10 out of 10 by the Avvo lawyer ranking system.
Mr .Karter has spoken on a variety of tax issues before the American Bar Association's Section of Taxation, the Tax Executives Institute, the Federal Bar Association, the New York University School of Law, the Georgetown University Law Center, The Southern Federal Tax Institute, the Palm Beach Tax Institute, and various state bar and professional associations.
Over the course of his career, Mr. Karter also has worked on numerous other complex civil litigation matters involving a wide variety of non-tax disputes in areas such as contract, tort, civil fraud, bankruptcy, antitrust, and international trade disputes.
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[April 2017] Obtained “no adjustment” letters (full IRS concessions) for a major low-income housing project developer/tax credit syndicator after the IRS conceded proposed aggregate audit adjustments of $5 million for alleged disguised sales by partnerships to their partners of state low income housing tax credits. Also obtained a full concession of IRS $1 million adjustment against syndicator claiming that sales of partnership interests were ordinary income rather than capital gain.
- [Oct. 2014] Represented major Fortune 250 manufacturer in nine-figure transfer pricing dispute involving valuation of intangible assets. Matter resolved/settled for approximately one percent of proposed adjustment.
- HealthMark Group Ltd. et al. v. Commissioner, No. 008269-14 (U.S. Tax Court, filed Apr. 14, 2014). Obtained full IRS concession in Tax Court case involving the purported application of Rev. Rul. 2005-40 to disregarded entities claiming insurance deductions paid to captive insurer. Successfully argued that Revenue Ruling was incompatible with §7701 check-the-box regulations and that disregarded entities with common ownership can achieve adequate risk distribution.
- Carfagno Auto Sales Inc. v. Commissioner, No. 12269-14 (U.S. Tax Court, filed May 28, 2014). Filed suit in Tax Court after adverse CDP appeal hearing on alleged deficiency in employment taxes. Obtained full IRS concession of deficiency as well as refunds of all overpayments for other tax periods that had been erroneously applied against that deficiency.
- Gateway Hotel Partners, LLC et al. v. Commissioner,T.C. Memo 2014-5 (Jan. 9, 2014). Lead trial counsel for participating partner challenging $22 million proposed adjustment to partnership income arising from alleged sale by partnership of state historic tax credits distributed to other partner. Tax Court ruled in participating partner's favor with respect to 89% of the proposed tax deficiency.
- Frontier Oil Corporation v. Commissioner, Docket No. 21151-10 (U.S.Tax Court, filed Sep. 23, 2010). Lead trial counsel for taxpayer claiming § 162(m)(4)(C) exception to limitation on deductability of qualified performance-based compensation and challenging interpretation of treasury regulation, which was subsequently amended as a result of case. (Case settled)
- WFC Holdings Corp. v. United States, 728 F.3d 736 (8th Cir. 2013). Lead trial counsel and co-appellate counsel for taxpayer claiming $423 million capital loss from the sale of stock in a contingent liability lease management subsidiary. (Decision for Gov't.; certiorari denied, June 9, 2014)
- Browning Ferris Industries, Inc. & Subsidiaries v. United States, 75 Fed.Cl. 591 (2007) - Court granted motion to dismiss without prejudice in case of first impression involving question of whether tax refund claim filed by company that had previously liquidated for tax purposes was jurisdictionally defective. (Case settled on remand from Fed. Cir.)
- Black & Decker Corp. v. United States,340 F. Supp. 2d 621 (D. Md. 2004), aff'd in part, rev'd in part and remanded, 436 F.3d 431 (4th Cir. 2006) - Trial counsel for taxpayer claiming $560 million capital loss from the sale of stock in a contingent liability health care subsidiary. (Case settled on remand from 4th Cir.)
- Kohler Co. v. United States, 468 F.3d 1032 (7th Cir. 2006), aff'g. 387 F. Supp. 2d 921 (E.D. Wis. 2005) - Represented taxpayer at trial and appellate level. Obtained Seventh Circuit decision affirming summary judgment in favor of taxpayer's claim that participation in Mexican debt-equity swap did not produce short-term capital gain.
- Black & Decker Corp. v. United States, 219 F.R.D. 87, 92 A.F.T.R.2d 2003-6426, 2003-2 USTC 50,659 (D. Md., September 15, 2003) - Obtained ruling upholding taxpayer's claim of work product protection over documents prepared by accountant after taxpayer indicated its intention at IRS audit to rely on specific advice offered by accountant in an opinion letter previously disclosed to IRS.
- Black & Decker Corp. v. United States, 93 A.F.T.R.2d 2004-989, 2004-1 USTC 50,175, (D. Md., February 19, 2004) - Obtained court ruling affirming taxpayer's right to retain normally redacted information in Field Service advice that was inadvertently disclosed by government. The ruling rejected government's defense that information was protected by disclosure exceptions to Freedom of Information Act.
- VF Corp. v. Commissioner, No. 7584-02 (U.S. Tax Court, filed Apr. 19, 2002) - Obtained full IRS concession in Tax Court case involving the question of whether $59 million cost of providing retail display to retail customers is currently deductible or must be capitalized.
- Kimberly-Clark Corp. v. United States, No. 02-0985 (E.D. Wis., filed Oct. 4, 2002) - Filed suit for taxpayer seeking credits against its United States federal corporate income tax liability for foreign taxes deemed paid by certain foreign subsidiaries. (Case settled)
- Kimberly-Clark Tissue Co. v. United States, 38 F. Supp. 2d 1028 (E.D. Wis. 1999) - Won summary judgment on issue involving taxpayer's entitlement to an investment tax credit under the "world headquarters" transitional rule of the 1986 Tax Reform Act.
- Emhart Corp. v. United States, No. 98-1823 (D. Md., filed June 9, 1998) - Obtained favorable settlement for taxpayer seeking to deduct the costs associated with the defense against a hostile takeover attempt.
- Emhart Corp. v. Commissioner, 75 T.C.M. 2231 (1998) - Won taxpayer's claim to a worthless stock deduction for losses attributed to the disposition of a foreign subsidiary.
- Kimberly-Clark Tissue Co. v. United States, No. 97-0134 (E.D. Wis., filed Feb. 12, 1997) - Obtained favorable settlement before trial for taxpayer seeking to amortize a $100 million greenmail payment over the term of the standstill agreement provided by a hostile shareholder in exchange for the greenmail payment.
- VF Corp. v. Commissioner, No. 23340-95 (U.S. Tax Court, filed Nov. 9, 1995) - Obtained full IRS concession in Tax Court case involving the question of whether taxpayer could accrue and deduct costs for cooperative advertising with its retailers before claims were submitted and payments were made.
Media MentionsPlease click here for Philip Karter's media mentions »
- American Bar Association
- Pennsylvania Bar Association
- Philadelphia Bar Association
- Montgomery Bar Association
- Chamberlain Hrdlicka lawyer discussed preparing witnessesMay 22, 2017
- Philip Karter and Herbert Odell are the only Pennsylvania tax controversy attorneys ranked nationally in their field by Chambers & Partners in the 2016 Chambers USA guide
- Firm and seven attorneys rank on state and national levels in tax and immigration categoriesMay 2016
- Chamberlain Hrdlicka again recognized nationally in The Legal 500 and Chambers & PartnersJune 2015
- Bucks County Courier Times, April 17, 2015
- Bloomberg BNA Tax Management Weekly State Tax Report, December 2014
Seminars & Presentations
- David Aughtry and Phil Karter present ‘Witnesses, Whistleblowers and Protecting the Cause’Loews Chicago O’Hare Hotel, 5300 North River Road, Rosemont, IL 60018, May 9, 2017
- Chamberlain Hrdlicka lawyers to co-present at Tax Executives Institute 2016 Audits & Appeals Seminar
- Chamberlain Hrdlicka tax attorney to advise lawyers on helping a client facing an IRS audit
- Philadelphia tax attorney Philip Karter to present advice on responding to new IRS rules for Information Document Requests (IDRs)Grand Hyatt Atlanta in Buckhead, Atlanta, GA, October 19 to 23, 2015
- Preparing Witnesses - The Good, Bad & UglySan Francisco, CA, May 19, 2015
- Preparing Witnesses - The Good, Bad & UglyNew York, N.Y., May 21, 2014
- Lawline.com and FurtherEd CP - The Synergy of Legal & Accounting Strategies -Defending the IRS Audit – Planning For and Managing the Examination ProcessKing of Prussia, PA, December 14, 2013
- CPA Society of Pennsylvania - Planning For and Managing The Examination ProcessBlue Bell, PA, October 16, 2013
- The Four Seasons Philadelphia, May 30, 2012
- Chicago Tax ClubEconomic Substance And International Tax Law Following CodificationOak, April 11, 2011
- Tax Executives Institute - If You Knew Then What You Know NowA Litigator's Guide to Tax Planning and ControversyAppleton, Wisconsin, May 21, 2009
Articles & Publications
- "IRS Access to Computerized Records of Corporate Taxpayers," 87 Journal of Taxation (September 1997).
- " U.S. Officials’ Latest Proposals to Curb ‘Abusive Tax Shelters’ Could Affect Legitimate Cross-Border Transactions," Journal of International Tax Planning (March 2000).
- Co-author of "Transfer Pricing for Services,"Transfer Pricing Methods - An Applications Guide," John Wiley & Sons (2004).
- “The Role of Economic Substance In Tax Shelter Controversies,” 19 The Corporate Counselor 8 (January 2005).
- Quality Stores Day Of Reckoning Draws Near – What Should Employers Be Thinking About? Taxblawg.net (January 16, 2014)
- Are Quiet Disclosures of Offshore Accounts Becoming Even Riskier? Taxblawg.net (October 18, 2013)
- Apple’s Double Irish With A Dutch Sandwich Goes Down Easy with SEC, Taxblawg.net (October 9, 2013)
- Cleaning Up After The Elephants – A Practical Reminder On Document Preservation Policies and Litigation Holds In Tax Disputes, Taxblawg.net (September 2, 2013)
- The Opera Isn't Over Yet on FICA Tax Refunds Until the Supreme Court Sings, Taxblawg.net (April 3, 2013)
- Sixth Circuit Moves The Ball Forward For Companies Seeking FICA Tax Refunds On Supplemental Unemployment Compensation Benefit Payments, Taxblawg.net (January 8, 2013)
- Could The New Economic Substance Statute Apply To End-Of-Year Stock Sales And Repurchases? Taxblawg.net (December 28, 2012)
- IRS Records Retention Requirements In The Age of Metadata, Taxblawg.net (December 16, 2011)
- Musings in the Aftermath of the First Schedule UTP Filing Season, Taxblawg.net (December 8, 2011)
- Tax Court May Be The Forum of Choice for Taxpayers Seeking to Challenge Treasury Regulations, Taxblawg.net (June 23, 2011)
- The Reporting Requirement for Deferred Tax Assets Under Schedule UTP: IRS Instructions Muddy the Waters; Taxblawg.net (November 23, 2010)
- The Tax Workpapers Conundrum - Will "Justice" Kagan Accept What Solicitor General Kagan Opposed? Taxblawg.net (July 1, 2010)
- Venerable "Kovel Rule" May Be Under New Attack; Taxblawg.net (May 10, 2010)
- Trust But Verify - Proposed Schedule UTP And The Implications To Attorney Work Product; Taxblawg.net (April 20, 2010)
- Son of BOSS Case Highlights Ongoing Dispute Over Application Of The Valuation Misstatement Penalty; Taxblawg.net (March 12, 2010)
- The Subliminal Message Underlying Announcement 2010-09; Taxblawg.net (March 11, 2010)