California | Illinois | Michigan | Minnesota | Texas | Washington, D.C. Exceptional service. Dykema delivers. Lawyering for Your Tax Department In-House Counsel Summit Presented by: Bill Finkelstein, David Schenck, and Drew McEwen

Exceptional service. Dykema delivers. 1 Dykema Gossett PLLC 350 lawyers in 12 offices (MI, IL, CA, DC, MN, and TX) Litigation, IP, Corporate, Taxation, Real Estate, Energy, Healthcare, and Financial Services Bill Finkelstein – Corporate, M&A, and Bankruptcy David Schenck – Specialty Litigation and Appellate Drew McEwen – State and Local Tax

Exceptional service. Dykema delivers. 2 Taxes: Why You Should Care $1.1 Trillion SALT and $242 Billion Corporate FIT Scope: Affects All Transactions Complexities –Tax Types –Multiple Jurisdictions –Constant Law Changes –Various Governmental Agencies –Third-Party Service Providers

Exceptional service. Dykema delivers. 3 Understanding Your Tax Department What does it do? - Planning- Compliance - Audit- Controversies Where and how it touches government? What are the high-priority risks (i.e., tax types)? Who are the key personnel? Does it engage outside service providers? –Contracts –Client Service –Privilege –Litigation/Controversies

Exceptional service. Dykema delivers. 4 Put It Into Practice Build and maintain relationships with key personnel –Evolving role of inside counsel Learn the language Identify, understand, and monitor current tax matters Identify potential tax issues Monitor third-party service providers

Exceptional service. Dykema delivers. 5 Mergers and Acquisitions Acquisitions of Businesses –Buyer Due diligence is critical –State and Local Taxes – Certificate of No Tax Due Reps and warranties Indemnities: hold-backs/guaranties –Seller Refunds/audits/appeals: carve out/sharing/control Narrow indemnities: baskets/tipping points Disclosures Ad valorem tax liens – priming

Exceptional service. Dykema delivers. 6 State Sales Tax and Federal Withholding Trust Fund –Personal liability for underpayment –50% fraud penalty –Potential conflicts

Exceptional service. Dykema delivers. 7 Controversies and Litigation Contesting Federal Tax Audits –Issues –Procedures State Tax Audits –Know the terrain: Issues and procedures Refund claims: You better know your exposure first –Triggering audits –Counterclaims in tax recovery suits De novo: Know when record is set in stone Appeals –Who to hire and when

Exceptional service. Dykema delivers. 8 Controversies and Litigation (cont’d) Negotiating with the Attorney General –A.G. is the State’s exclusive voice in Court--Bankruptcy & Collections Division under the Civil and Defense Litigation Deputy. –Comptroller’s views on law and policy matter, but… Major matters on appeal and in the Texas Supreme Court –Having a major legal question appended to your claim helps your negotiating posture w/ the AG. –AG is not eager to pioneer exotic tax arguments or to lose any tax case in Texas Supreme Court. –Supreme Court isn’t either—In re Nestle (2012).

Exceptional service. Dykema delivers. 9 Questions? Bill Finkelstein David Schenck Drew McEwen