Thomas J. Callahan
Practice Group Leader, Tax
Tom is the chair of the firm's Taxation practice. He focuses his practice on handling taxpayer controversies with IRS (examinations, appeals, litigation, and criminal tax matters), advising clients on structuring prospective transactions, and obtaining rulings and other technical guidance from the IRS National Office.
Tom has significant experience in handling mergers and acquisitions, corporate and partnership tax issues, consolidated return and alternative minimum tax issues, REIT issues, financings and original issue discount, civil fraud audits, and tax related bankruptcy issues including preservation of net operating losses.
Tax Controversy Matters
- Co-counsel for a large bank concerning settlement of LILO/SILO/QTE transactions under Appeals settlement initiative.
- Member of legal team that represented investment trust in litigation regarding SILO transaction – AWG Leasing Trust, KSP Investments, Inc. v. U.S., 2008-1 USTC ¶ 50,370 (N.D. Ohio 2008).
- Member of legal team that eliminated more than $400 million in tax, penalty and interest for U.S. subsidiary of foreign corporation with respect to elimination of U.S. withholding tax on distributions to foreign parent, determination of tax basis of subsidiary stock under U.S. consolidated return regulations, reduction of excess loss account income arising from termination of U.S. consolidated group, elimination of proposed Section 482 transfer pricing adjustments, and reduction of gain on sale of subsidiary stock.
- Member of legal team that recovered $57 million in tax and interest for a Fortune 50 telecom with respect to 1986 Tax Act transition investment tax credits on capital improvements.
- Member of legal team that eliminated over $30 million of tax, penalty and interest for a multinational health care client.
- Eliminated $20 million of tax, interest and penalty for a hedge fund company with respect to overstatement of net operating losses.
- Member of legal team that recovered an $11 million refund for a national retailer for a specified liability loss deduction.
- Member of legal team that helped The Goodyear Tire & Rubber Company obtain a generic legal advice memorandum regarding specified liability losses.
- Member of legal team that obtained recovery of tax and interest for Parker Hannifin Corporation in settlement of U.S. Court of Federal Claims litigation concerning creditable Brazilian taxes and dividends received deduction.
- Member of legal team that eliminated $4 million of tax and interest in IRS Appeals Mediation with respect to unreasonable compensation issue.
- Member of legal team that obtained recovery of $3.4 million refund. attributable to previous payment of deficiency interest by Fortune 500 client to IRS.
- Member of legal team that obtained favorable private letter ruling which allowed a real estate client to claim $3 million of low-income housing tax credits.
- Member of legal team that obtained recovery of $2.5 million in tax and interest for Buckeye Power, Inc. in U.S. Court of Federal Claims litigation which confirmed Buckeye's qualification as a tax-exempt rural electric cooperative – Buckeye Power, Inc. v. U.S., 38 Fed. Cl. 154, 97-2 USTC ¶ 50,580 (1997); and Buckeye Power, Inc. v U.S., 38 Fed. Cl. 283 (1997).
- Member of legal team that eliminated $1.9 million in tax, penalties and interest in connection with unreasonable compensation case – The Album Network, Inc. v. Commissioner, U.S. Tax Court Docket No. 23681-97 (1999) (settled by stipulation of the parties).
- Eliminated more than $1 million of tax, penalty and interest for a physician accused of tax fraud by IRS Compliance Division.
- Member of legal team that obtained $1 million concession in tax, penalties and interest from the IRS for a client previously convicted of filing false tax returns.
- Member of legal team that obtained a concession from the IRS of $650,000 in tax, penalties and interest for a client previously convicted of wire fraud.
- Member of legal team that eliminated more than $500,000 in taxable income for a real estate developer in bankruptcy with respect to foreclosure of distressed properties - In re Pfug, Jr., 146 B.R. 687, 92-2 USTC ¶ 50,586 (Bankr. E.D. Va. 1992).
- Member of legal team that eliminated $500,000 proposed assessment of accumulated earnings tax for a closely held corporate client.
- Member of legal team that eliminated over $475,000 of tax, penalties and interest for the spouse of a convicted tax felon.
- Obtained over $250,000 concession of tax, penalties and interest in a TEFRA case based on jurisdictional defense.
- Eliminated $200,000 in tax, penalties and interest with respect to a pension rollover.
- Eliminated $150,000 trust fund recovery penalty for client.
- Obtained $100,000 concession of tax from IRS concerning proposed liability of client for funding payroll with knowledge that vendor was unable to pay payroll taxes.
- Tax counsel with respect to negotiation and preparation of three tax opinions with respect to placement of $1.5 billion of Bank Owned Life Insurance for Fortune 100 financial institution.
- Tax counsel to issuer of multibillion-dollar bank notes to the public market.
- Tax counsel to large real estate developer with respect to $1.2 billion sale of regional shopping center mall properties to a publicly held REIT.
- Tax counsel to tiered real estate partnerships created by Fortune 100 publicly traded companies to invest in real estate development projects.
- Tax counsel to public REIT with respect to structuring $115 million cross-border mortgage securitization.
- Tax counsel to large real estate developer with respect to income and partnership tax issues arising in connection with the formation of an UPREIT.
- Tax counsel to mutual funds with respect to tax-free reorganization of series mutual funds.
- Tax counsel to issuer of over $50 million of trust preferred securities to the public market.
- Tax counsel to closely held client with respect to $50 million part sale and part redemption of its stock.
- Tax counsel to large publicly held bank holding company with respect to tax-free merger of investment banking and consulting business into wholly owned subsidiaries.
- Advised on tax and accounting issues with respect to synthetic lease financing of a $40 million distribution center constructed by publicly held client.
- Tax counsel to the unsecured creditors committee of a large retailer concerning the preservation of substantial net operating losses and minimization of taxes in bankruptcy.
- Tax counsel to large publicly held retailer with respect to income and payroll tax implications of internal restructuring.
- Tax counsel to numerous clients with respect to structuring taxable mergers and acquisitions and tax-free reorganizations.
- Acquisition by Phoenix Packaging Corporation of its principal competitor.
- “Spin-Offs: Key Considerations,” Thompson Hine Business Law Update, Winter 2018
- “Tax Court Rules on Gains from Foreign Investment in U.S. Partnerships,” Thompson Hine Tax Update, July 2017
- “Ohio Supreme Court Case Erodes Certainty of Bright-Line Test for Ohio Residency,” Thompson Hine Tax Update, July 2015
- Co-author, "Joint Committee Refund Review: Twelve Questions to Consider"
- "IRS Office of Chief Counsel Adopts New Procedures for Issuing Legal Advice on Audit Issues," CCH Journal of Tax Practice & Procedure
- "Tax Accrual Workpapers: IRS Efforts to Obtain Them, Corporate Strategies to Protect Them," CCH Journal of Tax Practice & Procedure and The Tax Executive
- "What Tax Lawyers Need to Know About Single Member Limited Liability Companies," The Practical Tax Lawyer
- Co-author, "Representation Before the United States Tax Court," Thomson West
- “The Use of the U.S. Administrative Procedures Act to Challenge IRS Guidance and Other IRS Administrative Actions," International Fiscal Association
- “Federal Tax Case Law Roundup," Cleveland Tax Institute
- "Taxpayer Civil Penalties," ABA Section of Taxation
- "Federal Tax Case Law Update," Cleveland Tax Institute
- "IRS Appeals: Settlement Tools," co-presenter, The Tax Club of Cleveland
- "Ethical Standards for Practice Before the IRS – Circular 230," Cleveland Tax Institute
- "Trends in Tax Controversy," Manufacturers Alliance (MAPI)
- "IRS Practice & Procedure – Uncertain Tax Positions, Opinion Practice & Modification / Revocation of IRS Rulings," co-presenter, Cleveland Tax Institute
- "The Tax Man Cometh – an Update on Tax Issues in Workouts and Bankruptcies," co-presenter, Cleveland Metropolitan Bar Association
- "Hot Topics in IRS Enforcement & Administration," co-presenter, The Tax Club of Cleveland
- "Preserving Attorney – Client and Work Product Privilege After Textron," International Fiscal Association
- "Selected Federal Income Tax Issues in Partnership Workouts and Bankruptcies," Cleveland Tax Institute
- "TEI: Tax Accrual/FIN 48 Workpapers: The Continuing Saga," co-presenter, Tax Executives Institute
- "TEI: Tax Accrual/FIN 48 Workpapers: Tax Controversy Update," Tax Executives Institute
- "A Forum on the Tax Section's Recent Survey on the Independence of the IRS Office of Appeals," ABA Section of Taxation
- "Update on IRS Appeals," ABA Section of Taxation
- "IRS Administrative Affairs – Hot Topics," Tax Executives Institute
- "Case Specific Advice – Meeting the Client's Needs," ABA Section of Taxation
- "National Research Program Update," ABA Section of Taxation
- "Independence of IRS Appeals," ABA Section of Taxation
- "Tax Accrual Workpapers," Tax Executives Institute
- "Privileged Communications and Tax Accrual Workpapers," Tax Executives Institute
- "Federal Tax Update," Tax Executives Institute
- "Know When to Hold 'Em: Tax Accrual Workpapers," Tax Executives Institute
- "Tax Talk Today: Tax Shelter Enforcement Update," Internal Revenue Service
- "Update on IRS Appeals Following the Reorganization," ABA Section of Taxation
- "Tax Accrual Workpapers: What Documentation Should a Corporate Tax Department Generate," Tax Executives Institute
- "Like-Kind Exchanges of Personal Property and Multi-Asset Exchanges," Cleveland Tax Institute
- "Disclosure of Tax Accrual Workpapers to IRS," Tax Executives Institute
- "Redesign of the LMSB Audit Process," ABA Section of Taxation
- "Handling IRS Audits and Appeals," Cleveland Bar Association
- "Real Estate Workouts at the Beginning of the New Millennium – Tax Issues," Cleveland Bar Association
- "Corporate Tax Update," Tax Executives Institute
- "Domestic Taxable and Tax Free Mergers and Acquisitions," Tax Executives Institute
- Selected for inclusion in Chambers USA: America's Leading Lawyers for Business, Tax, Ohio, 2020
- AV® Preeminent Rated by Martindale-Hubbell
- Selected for inclusion in Super Lawyers by Ohio Super Lawyers magazine, 2010 to 2020
- Listed in The Best Lawyers in America© since 2001 in the fields of Litigation and Controversy-Tax, and Tax Law; named the Best Lawyers® 2016, 2017, 2018, 2020 and 2021 Litigation and Controversy-Tax "Lawyer of the Year" in Cleveland
- Who's Who Legal: USA for Corporate Tax
- Who's Who in America
- Certified public accountant in Ohio (active), 1981 to present
- Cuyahoga County Common Pleas Court Arbitration Panel, 1990 to present
- American College of Tax Counsel: Immediate Past President (2016-2017); President (2013-2015); Vice-President (2012-2013); Secretary-Treasurer (2011); Regent (6th Cir.) (2004-2011); Fellow (2003-Present)
- American Bar Association, Section of Taxation: Chair (2019-2020), Chair-Elect (2018-2019), Vice-Chair Committee Operations (2014-2016), Council Director (2008-2011); Chair, Administrative Practice Committee (2005-2006)
- Cleveland Tax Institute: Chair (2001 and 2004); Executive Committee (1999-2006, 2011-2017); Speaker (1992, 1994-1998, 2000, 2002-2003, 2009-2011, 2013-2017)
- The Tax Club of Cleveland: President (2004-2005); Vice-President (2002-2003); Treasurer (2001); Director (2000)
- International Fiscal Association USA Branch, Regional Vice President – Cleveland Region (2017-2018)
- The Theodore Tannenwald Jr. Foundation for Excellence in Tax Scholarship: Director (2015-present)
- Cleveland Bar Association, General Tax Committee: Chair, 1999, State and Local Tax Institute, Chair, 2000
- Member of American Bar Association, American Institute of Certified Public Accountants
- Author of tax articles published in The Tax Executive, Ohio Business, The Journal of Tax Practice and Procedure, The Practical Tax Lawyer, The Practical Accountant and Cleveland Bar Journal
- Speaker at numerous seminars and meetings sponsored by organizations such as Manufacturers Alliance for Productivity and Innovation (MAPI), Tax Executives Institute, American Bar Association Section of Taxation, Internal Revenue Service, Ohio CLE Institute, Cleveland Bar Association, Ohio Institute of Certified Public Accountants, etc.