Overview
Michael J. Scarduzio focuses his practice on US and international tax matters, particularly civil and criminal tax litigation. From audit to litigation, he represents taxpayers in all phases of tax controversy, including novel issues of first impression such as financial hedging transactions using a captive insurer, US tax implications of a foreign master-feeder fund’s investment activities and matters arising under Internal Revenue Code (IRC) Sections 7216 and 7212(a).
Michael has experience handling a variety of complex tax issues, including partnership audit procedures under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and the Bipartisan Budget Act of 2015 (BBA), international tax and Report of Foreign Bank and Financial Accounts (FBAR) compliance, reportable transactions, transfer pricing, debt equity classifications, foreign tax credits and excise tax on reinsurers. He also advises on questions relating to the attorney-client and work product privileges arising in tax matters.
After law school, Michael served as a term law clerk for the Honorable Karen L. Hayes of the US District Court for the Western District of Louisiana. He also served as a judicial intern for the Honorable Dolores K. Sloviter of the US Court of Appeals for the Third Circuit during law school. And, while earning his LLM in Tax from NYU, he served as a legal extern for the Internal Revenue Service’s (IRS) Office of Chief Counsel and Large Business and International Division in New York.
Results
- Successfully resolved US Tax Court litigation on behalf of a corporate officer and closely-held corporation, involving the deductibility of certain business expenses. While the matter was initially a criminal referral by the IRS Criminal Investigation, our team resolved the case civilly without the imposition of fraud penalties.
- Successfully obtained retroactive reinstatement of a global not-for-profit organization’s federal tax-exempt status as well as abatement of all related penalties, avoiding more than $20 million in tax, penalties and interest*
- Represented alliantgroup LP and obtained dismissal of all claims in The University of Texas System, et. al. v. alliantgroup LP, et. al. The district court dismissed the plaintiffs’ allegations of violations of the RICO statute and demands for declaratory relief invalidating a Texas statute concerning the allocation of energy-efficiency tax deductions. The district court also dismissed pendent state law claims. (No. 4:17-cv-02588 (S.D. Texas))*
- Advised a Fortune 100 multinational corporation in restructuring its global tax department to optimize compliance with domestic and global reporting requirements and maintain confidentiality for sensitive, privileged materials*
- Advised a multinational pharmaceutical company regarding its captive insurance program*
- Successfully represented taxpayers before the IRS relating to the examination of Employee Retention Credits*
- Obtained full concession from the IRS in a US Tax Court matter affirming a taxpayer’s position that $50 million in proceeds from litigation funding was properly characterized as long-term capital gain*
- Successfully negotiated the resolution of a New York sales tax examination on behalf of a multinational company, its subsidiary and its executives as purported responsible persons*
- Obtained favorable resolution for a taxpayer regarding a criminal tax investigation into New York City’s unincorporated business tax*
- Successfully quashed a series of summonses served on US financial institutions pursuant to the United States-Russia tax treaty and at the request of the Russian Federation*
- Was part of a trial counsel team in a Tax Court case involving a large multinational hedge fund advisory firm that was to determine whether the fund was “engaged in a US trade or business” and was effectively generating connected income as result of its investment activities and whether the fund was subject to withholding under IRC Section 1446*
- Represented a large estate in a complex Tax Court case involving the valuation of an estate comprised of original works of art and the calculation of the appropriate blockage discount*
- Represented employers in worker classification issues and for participation in the IRS Voluntary Classification Settlement Program*
*Matter handled prior to joining McDermott.
Recognitions
- The Legal 500 US, US Taxes: Contentious, Rising Star, 2022 and 2023
- The Legal Aid Society, Pro Bono Publico Award, 2017
Community
- American Bar Association Tax Section, member
- New York City Bar Association Personal Income Tax Committee, member
- New York County Lawyers Association US Tax Court Calendar Call Pro Bono Program, volunteer
Credentials
Education
New York University School of Law, LLM in Taxation, 2014
Rutgers Law School, JD, magna cum laude, 2012
Marist College, BA, cum laude, 2008
Courts/Agencies
US Tax Court
US District Court for the Southern District of New York
Admissions
New York
New Jersey
