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, The Best Lawyers in America® (2018-2022; Lawyer of the Year for Litigation and Controversy - Tax for Philadelphia - 2019)
Listed, Chambers USA: America's Leading Lawyers for Business (2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021)
Listed, The Legal 500 U.S. – Tax Controversy (2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018)
Lifetime Achievement Lawyer Excellence Award - American Lawyer Media’s The Legal Intelligencer, 2020
International Tax Review - U.S. Tax Controversy Leaders (2017)
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 38-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
- Transfer pricing adjustments
- Worthless stock losses
- Captive insurance arrangements
- Income, estate and gift tax valuation issues
- Tax and tax penalty issues involving cryptocurrency (Bitcoin, Ethereum, etc.)
- Tax audits under Puerto Rico's Act 20 and 22, and now Act 60.
- Disguised sales and other partner/partnership recharacterizations
- Debt-equity swaps and other financial product issues
- Greenmail / hostile takeover defense 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
- IDR responses and document productions
- 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:
- Requests for Audit Reconsideration
- Offers in Compromise
- Installment payment agreements
- Tax lien and levy releases
- Tax lien subordination
- 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
- Domestic voluntary disclosures
- 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 also is one of a select number of attorneys recognized as a national authority in tax controversy and litigation by Chambers USA and the US Legal 500 Litigation and Tax Guides and is the only federal tax controversy attorney based in Pennsylvania to receive national recognition from the prestigious Chambers ranking publication.
Chambers also has ranked Chamberlain Hrdlicka as one of the top tax controversy law firms in the United States for the 15th consecutive year, which coincides with Mr. Karter’s joining the firm. He is also perennially named in the Best Lawyers in America®, one of the legal profession’s oldest and most respected peer-review publications, and recognized as “Lawyer of the Year” in Tax Litigation and Controversy for Philadelphia in the 2019 edition.
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.
In addition to his long career in tax controversy and litigation, Mr. Karter has worked for many years on numerous tax planning matters, with a particular emphasis on real estate investment partnerships. He presently works with real estate developers and investors in Qualified Opportunity Zone (QOZ) projects authorized by Internal Revenue Code §1400Z. Mr. Karter also maintains an active practice assisting companies establish both § 831(a) and § 831(b) captive insurance arrangements.
[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
- Four Chamberlain Hrdlicka Attorneys Named Among 2022 Pennsylvania Super Lawyers, Rising StarsPhilip Karter, Kenneth I. Trujillo and Stewart M. Weintraub were selected as “Pennsylvania Super Lawyers” and Jennifer W. Karpchuk was selected as a “Pennsylvania Rising StarMay 19, 2022
- Chamberlain Hrdlicka's 43rd Annual Tax and Business Planning Seminar is virtual on November 2-4, 2021. Register to participate.November 2, 2021
- Best Lawyers in America® selects 54 Chamberlain Hrdlicka Attorneys for Recognition for 2022August 19, 2021
- Quote by Phil Karter in article on “4 Federal Tax Cases To Watch In 2021’s 2nd Half”Law360, July 9, 2021
- Quote by Phil Karter in article on “Justices' Microcaptive Ruling Chips At Tax Exceptionalism”Law360, June 25, 2021
- Legal 500 Firm and Individual Rankings Improve at Chamberlain Hrdlicka for 2021June 21, 2021
- Chamberlain Hrdlicka enhances Practice and Individual Rankings in Chambers & Partners 2021 USA GuideChambers & Partners 2021 List for Chamberlain Hrdlicka Practice and Individual RankingsJune 3, 2021
- Quotes by Phil Karter and Kevin Sweeney on “Crypto investor sues IRS over tax enforcement rules”Fortune, May 27, 2021
- Karpchuk, Karter, Trujillo and Weintraub named among 2021 Pennsylvania Super Lawyers and Rising StarsMay 26, 2021
- Phil Karter participated in a CPA Conversations Podcast on “IRS Audit Survival Tips”CPA Conversations Podcast, November 23, 2020
- Quote by Phil Karter on “IRS Warns Micro Captive Users of Imminent Shock and Awe”October 2, 2020
- The Legal Intelligencer published a profile of Phil Karter for receiving the Lifetime Achievement recognition for 2020September 24, 2020
- Chamberlain Hrdlicka Attorneys Named to US News – 2021 Best Lawyers in America®, Three Attorneys Recognized as Lawyer of the YearAugust 20, 2020
- Two Chamberlain Hrdlicka Attorneys Named to the Legal Intelligencer's 2020 Professional Excellence ListPhil Karter and Kevin Sweeney Named to the Legal Intelligencer's 2020 Professional Excellence ListJune 3, 2020
- Chamberlain Hrdlicka Tax Alert - Paycheck Protection Program (PPP) Loan Forgiveness Tax IssuesMay 21, 2020
- Phil Karter quoted in “High Court's Microcaptive Case Could Weaken IRS Rule Shield”Law360, May 6, 2020
- Chamberlain Hrdlicka continues to be recognized with Practice and Individual Rankings by Chambers & PartnersChambers Individual and Practice Rankings for 2020May 4, 2020
- Phil Karter quoted in "New Exec Could Help IRS Efficiently Tamp Down Tax Schemes"Law360, April 20, 2020
- IRS' Battle Against Micro-Captives ContinuesCaptive Insurance Times, March 18, 2020
- Record Number of Chamberlain Hrdlicka Attorneys Named to US News 2020 Best Lawyers in America® and Four Attorneys Recognized as Lawyer of the YearAugust 15, 2019
- Opportunity Zone Article in Houston Business Journal with Phil Karter and Katherine Noll, Co-Chairs of Qualified Opportunity Zones PracticeAugust 5, 2019
- May 10, 2019
- April 17, 2019
- Chamberlain Hrdlicka again named a "Best Law Firm" by US NewsNovember 1, 2018
- Peer Ranked in Construction, Eminent Domain, Employee Benefits (ERISA), Government Relations, Immigration, Litigation - Construction, Litigation - Trusts & Estates, Tax, Tax Litigation & Controversy, Trademark, Trusts & EstatesSeptember 18, 2018
Seminars & Presentations
- 43rd Annual Tax and Business Planning Virtual Seminar is on November 2-4, 2021November 4, 2021
- Webinar on Nuts and Bolts of taking the Opportunity Zone Plunge with Brian Lovett, Thomas Fleming and Phil KarterSeptember 5, 2019
- The Fundamentals of Investing In Qualified Opportunity ZonesPhiladelphia Bar Association Conference Center, 1101 Market Street, Philadelphia, PA 19107, November 30, 2018
- David Aughtry and Phil Karter present ‘Witnesses, Whistleblowers and Protecting the Cause’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
- 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
- Phil Karter article on "Successfully Orbiting the Mothership in a Satellite Office"Legal Intelligencer, April 22, 2022
- Article by Phil Karter and Kevin Sweeney on “Are Your Clients Prepared for a Wave of IRS Audits?”Pennsylvania CPA Journal, December 2021
- Article by Phil Karter on "Successfully Navigating the Client Transition Conundrum"The Legal Intelligencer, September 10, 2021
- Article by Phil Karter and Mark Lubin on "How to Successfully Transition to Private Practice from an In-House or Government Position"Legal Intelligencer, June 30, 2021
- Article by Phil Karter and Stewart Weintraub on “Thinking of Changing Firms? Here Are Some Questions to Ask at the Interview”Legal Intelligencer, February 5, 2021
- Article by Phil Karter and Pat McCann on “Looking at Small Captives in a Post-Pandemic World"Bloomberg Tax, December 21, 2020
- Article by Philip Karter on “IRS Audit Process: What You Need to Know”Pennsylvania CPA Journal/CPA Now Blog, November 16, 2020
- Article by Phil Karter, Jennifer Karpchuk, and Kevin Sweeney on "“Should I Spend Money on a Business Development Coach? Advice for the New Partner"Legal Intelligencer, August 11, 2020
- Article by Phil Karter, Scot Kirkpatrick and Pat McCann on “IRS Letter 6336: To Respond or Not to Respond, That Is the Question”Tax Notes Federal, June 1, 2020
- Article by Phil Karter, Scot Kirkpatrick and Pat McCann on "The Letter in Question"Captive Insurance Times, May 27, 2020
- Article by Philip Karter and Patrick McCann on IRS Announcement Likely Overstates True Impact of Captive Insurance SettlementBloomberg Tax, February 28, 2020
- Law360, February 10, 2020
- Bloomberg Tax Management Memorandum and Daily Tax Report, April 10, 2019
- FC&S Legal, May 15, 2018
- Captive Insurance Times, April 6, 2018
- Business Insurance, January 2018
- Professionalisms Resources Thinking Aloud
- Tax Notes, September 11, 2017
- A 'To Do' List for Facilitating a Smooth and Robust Audit DefenseCorporate Counsel, June 2017
- "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).
- "What to Do When the IRS Comes Knocking - A 'To-Do' List for Facilitating a Smooth and Robust Audit Defense," Corporate Counsel Magazine, (June, 2017)
- Ready Or Not, The New Partnership Audit Rules are Coming (December 2017)
- Captive Investments Scrutinized Following Key Tax Court Ruling (January 2018)
- To Self-Insure or Not to Self-Insure? That is the Question (April 2018)
- How to Mount a Tax Defense for Unreported Crypto Income (April 2018)
- Specifically Identifying Exchange-Based Crypto: An Old Solution to a New Problem, Bloomberg Tax (April 2019)
- Tax Blawg, June 25, 2019
- Is There Trouble in the Deep End of the Pool for Small Captives after Reserve Mechanical v. Commissioner?Tax Blawg, November 9, 2018
- Tax Blawg, October 7, 2018
- Tax Blawg, August 16, 2018
- Taxpayers With Unreported Cryptocurrency Gains Should Start Thinking About Filing Qualified Amended Returns – And SoonTax Blawg, February 27, 2018
- New Tax Bill May Eliminate Right to Deduct Fees Expended "In Connection with the Determination, Collection, or Refund of any Tax"Tax Blawg, November 3, 2017
- Tax Blawg, October 18, 2013
- Tax Blawg, October 9, 2013
- Tax Blawg, October 1, 2013
- Cleaning Up After The Elephants - A Practical Reminder On Document Preservation Policies and Litigation Holds In Tax DisputesTax Blawg, September 3, 2013
- Sixth Circuit Moves The Ball Forward For Companies Seeking FICA Tax Refunds On Supplemental Unemployment Compensation Benefit PaymentsTax Blawg, January 9, 2013
- Tax Blawg, December 28, 2012
- Tax Blawg, December 16, 2011
- Tax Blawg, December 8, 2011
- The Reporting Requirements for Deferred Tax Assets Under Schedule UTP: IRS Instructions Muddy The WatersTax Blawg, November 23, 2010
- Tax Blawg, July 1, 2010
- Tax Blawg, May 10, 2010
- Tax Blawg, April 20, 2010
- Tax Blawg, March 12, 2010
- Tax Blawg, March 12, 2010