Back in March, Baker McKenzie tax partner George Clarke filed a lawsuit against the Internal Revenue Service in federal court under the Freedom of Information Act. The suit alleged the agency failed to disclose memos, policy statements, and training materials related to audits on partnerships and other pass-through entities. You see, the IRS announced an increased focus on partnerships — reportedly opening up 75 examinations on large partnerships including hedge funds, real estate investment partnerships, and… law firms, with plans to send compliance letters to an additional 500 partnerships.
So, yeah. Baker McKenzie was curious to know more.
But according to reporting by Law.com, the firm has voluntarily dismissed the lawsuit with prejudice.
Clarke’s notice of voluntary dismissal stated the IRS has not served an answer or motion for summary judgment by an agreed-upon extended deadline. Justice Department lawyers representing the IRS in the action had requested a deadline extension to file a response to the complaint by 30 days to May 19.
Neither side is commenting on the case, but, reading between the “no comments,” it seems likely there was some kind of a meeting of the minds. But the rest of us reading public dockets and wondering about what the IRS’s enforcement efforts mean for Biglaw partnerships are left wanting.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
