Tax

We work with clients at all stages of the dispute process including IRS appeals, pre-litigation settlement, and litigation. Our clients include the IRS, the Tax Division of the Department of Justice, and major corporations. We have extensive experience providing both expert testimony and consulting support in tax shelter litigation, which typically involves disputes about economic substance. Keys to success involve identifying the right experts in a variety of disciplines and managing and tying the testimony of several experts together. We are especially adept at simplifying the complex business and financial structures that are characteristic of tax disputes and making clear their underlying economics.

Selected Case Experience

Long-Term Capital

Long-Term Capital Holdings, et al. v. United States of America

At one time, Long-Term Capital was the largest hedge fund in history with more than $100 billion in assets. Its partners included legendary bond trader John Meriwether, and Nobel Prize-winning economists Robert Merton and Myron Scholes. Following Long-Term’s demise, its partners sued the U.S. government over a substantial tax dispute. Cambridge Finance Partners was retained by the U.S. Department of Justice to provide economics and finance consulting services in this highly publicized matter. CFP assembled a team of experts, including Nobel Prize winner Joseph Stiglitz, and assisted the government attorneys with all aspects of the case. Following a four and one-half week trial, the Court subsequently ruled in favor of the United States. [pdf] …read more

Pharmaceutical Transfer Pricing

The Value of Intangible Assets

At the core of this transfer pricing dispute was the relative contributions to profits of two intangible assets: marketing and R&D. Cambridge Finance Partners worked for over two years with six testifying experts including Noble Prize winner Joseph Stiglitz and Cambridge Finance Partner’s Michael Cragg. …read more

Corporate Owned Life Insurance (COLI)

Complex Valuation and Risk Analysis

Xcel Energy v. United States of America was slated to become the fifth Corporate Owned Life Insurance (COLI) case to reach trial. Among the hotly contested issues was the pre-tax profitablity and valuation of life insurance policies extending out over 40 years. Finance experts for the taxpayer argued that the policies contributed hundreds of millions in value even absent the contested tax deductions on policy loan interest. Testifying for the United States, CFP’s Dr. Fenn …read more

Analysis of Sale Leaseback Transaction

BB&T v. United States of America 

In a case ruled favorably for the Government, Cambridge Finance Partners worked with the Department of Justice as consulting and testifying experts. Michael Cragg provided testimony on economic substance and the nature of the leasehold interest in this cross-border leasing transaction involving BB&T, a financial service company. …read more

Procter & Gamble

Procter & Gamble et. al. v. The United States of America

Robert Noah, an expert witness for the United States, was asked to address the purported non-tax business purpose of a series of transactions involving an inter-company transfer payment, pre-payment for goods, and related impacts on risk management and, in particular, foreign currency hedging. Dr. Noah’s analysis addressed valuation, hedging efficiency, hedging costs, and business purpose for transactions related to significant claimed tax reduction. The Court ruled in favor of the United States in summary judgment.

Kohler Company

Kohler Company v. United States of America

Cambridge Finance Partners was hired by attorneys for the United States. We assisted the governments testifying experts, and provided analysis related to the value of restricted foreign currency and soverign debt. …read more