Resolving IRS Appeals for Nashua Corporation

Our Client:  Nashua Corporation

Nashua Corporation underwent a significant downsizing during the late 1980s and early 1990s, involving dispositions of a number of business lines.

IRS audits of these years resulted in significant assessments, totaling over $20 million.  Nashua requested help managing and presenting the case before the IRS Appeals Office.

Tax attorney Bill Ardinger led our team in working with the IRS Appeals Officer and three separate examination teams covering 14 years.  The challenge involved a wide range of issues, including international, partnership, corporate, procedural, inventory and other accounting questions.

On one issue, addressing how deficits in earnings and profits impact the calculation of the foreign tax credit, Nashua encouraged the IRS toward settlement by working with the New Hampshire Congressional delegation to introduce federal legislation that would have established the correctness of Nashua’s reporting position.

Another assessment sought to deny “dual consolidated losses” realized from the disposition of foreign businesses because the taxpayer had not filed an appropriate election and annual certifications required by Treasury Regulations.  We successfully eliminated this issue by petitioning for relief to file the required documents in connection with resolution of the IRS appeal.

Ultimately, by engaging in a positive working relationship with a very capable and experienced IRS Appeals Officer, Nashua was able to resolve all outstanding issues for all years.  In the final audit cycle for years 1998 to 2000, the IRS examination suggested an agreed to adjustment of only $30,000.

Rath, Young and Pignatelli is proud to be part of the Nashua Corporation team.

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