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Christopher Kliefoth is a partner in the in the law firm of McDermott Will & Emery LLP based in the Firm’s Washington, D.C. office. He is a member of the Firm’s Tax and Trial Departments. Christopher has successfully litigated cases involving excise taxes, partnership tax issues, corporate tax issues, captive insurance, investment credit and structured transactions. He has extensive experience with valuation of complex financial instruments and securities.
Prior to entering private practice in 1989, Christopher was a senior trial attorney with the Tax Division of the U.S. Department of Justice. He has tried over 30 cases to judgment, of which many were jury trials.
Representative Experience
Boca Investerings Partnership v. United States, 167 F. Supp. 2d 298 (D. DC 2001): This case involved a structured, tax-advantaged transaction wherein American Home Products (AHP) entered into a partnership with two foreign partners to invest in financial instruments to obtain a positive economic return and a potential tax benefit. Similar transactions had been litigated by other corporations and were lost by the taxpayer. The court in Boca, however, held in favor of the taxpayer on all issues. Specifically the court primarily found that (1) the partnership was a bona fide partnership and should have been recognized for tax purposes; (2) the partnership was organized for legitimate business reasons to invest in financial instruments to make money; (3) AHP’s tax motivation was not relevant; and (4) the transactions entered into by the partnership had economic substance.
United Airlines, Inc. v. United States, 111 F.3d 551 (7th Cir. 1999): United brought suit for refund of federal excise taxes imposed by 26 U.S.C.S. § 4261(a), pursuant to which airlines are required to collect tax from their customers upon the sale of tickets and to pay the tax to the government. The issue was whether on the cancellation of a restricted ticket by a customer, United refunded the full amount of the tax it had collected from the customer so that United should obtain the full amount of the tax or whether United, by charging a fee to the customer for canceling the ticket, refunded only a portion of the tax it had collected from the customer, thereby entitling United to a lesser tax refund. Though the case was tried to a jury, at the close of evidence, the Court ruled in favor of United as a matter of law holding that United had established that it refunded all of the fare and all of the tax to the customer. In an abundance of caution, the court also submitted the case to the jury. The jury found in favor of United. After prevailing on appeal, United received a refund of over $8 million.
Boise Cascade Corporation v. United States, 1998 U.S. Dist. LEXIS 18740 (D.D.Id. 1998): Boise Cascade sought a refund of taxes paid on stock redeemed by terminated employees from its employee stock ownership plan (ESOP). The government argued that Boise was not entitled to the refund as it would constitute an impermissible double deduction. Boise prevailed on summary judgment. The court concluded that the redemption payments for the convertible preferred stock resulting from the employee termination were a separate expense to Boise and thus, Boise had not claimed a double deduction and the IRS improperly disallowed Boise Cascade’s deduction.
Avon Products, Inc. v. United States, 97 F.3d 1435 (Fed. Cir. 1996): The issue in this case was whether certain employee-profit sharing payments constituted deferred compensation or current compensation for purposes of taking a deduction pursuant to 26 U.S.C. §404(a)(5). Avon filed a claim for a refund based upon the IRS’ treatment of its employee profit payments. Vacating the U.S. Court of Federal Appeals grant of summary judgment in favor of the government, the Federal Circuit Court of Appeals held that employee profit payments may be entitled to treatment as deferred compensation even though the payments were not part of plan, and the transaction made no change in Avon’s method of accounting, but merely decided to make a particular payment at a time that would affect its tax consequences. The court reasoned that even though the decision to make a payment at a certain time would have tax consequences and may have been structured for tax purposes, these tax-motivated considerations did not render the payment impermissible. Although the Court of Appeals remanded the case for further decision by the lower court, the government conceded the case after Avon won on appeal.
The May Department Stores Co. v. United States, 36 Fed. Cl. 680 (Fed. Claims 1996): The issue in this case is whether the IRS properly assessed or collected interest from May Company on a deficiency. May Company prevailed on summary judgment, wherein the Court held that under the use of money principle, the United States, not the corporation, had use of the money during the relevant time and that, therefore, the IRS could not assess interest against the corporation until the deficiency was created. The court further found that any interest assessment for the period when the government had use of the money would be considered a penalty, and such an assessment could not be allowed.
Education:
University of Virginia School of Law, J.D., 1981
University of California-San Diego, B.A. (summa cum laude), 1975 | 