confidential

FAQs About Milbank TAARS® Tax Account Analysis and Recovery Services

www.taars.com OVERVIEW OF MILBANK TAARS®

What is Milbank TAARS®?

Milbank TAARS® is a confidential service that involves thoroughly reviewing corporate taxpayer account records (“transcripts”) maintained by the Internal Revenue Service and state taxing authorities to determine whether the taxpayer is entitled to refunds, credits or additional payments of interest. More specifically, Milbank TAARS® (i) identifies errors in the computation of interest, in the determination of penalties and in the transcripts, (ii) analyzes the transcripts using Milbank’s legal expertise to uncover issues favorable to the taxpayer, and (iii) recommends to the client the filing of claims to obtain any refunds, credits or payments that become available as a result of Milbank’s review. More often than not, we discover errors and determine that indeed the company is entitled to refunds, credits or additional interest payments. We do not question or verify the correctness of the company’s substantive tax liability. We examine federal income, payroll and excise taxes, as well as state franchise and income taxes.

© 2013 Milbank, Tweed, Hadley & McCloy LLP. All rights reserved. Attorney Advertising. Prior results do not guarantee a similar outcome. (This legend required by New York State Bar rules.) Who are Milbank TAARS® clients? We’ve made some acquisitions recently. Would Milbank TAARS® make sense in that case? Over the more than two decades that we have been offering Milbank TAARS® – longer than any other or accounting firm – we have developed a recognized leading practice in this area. Almost half of the Fortune 500 Definitely yes. Some of the most significant opportunities for correcting errors and obtaining refunds arise as a result of corporations have used Milbank TAARS®. We work with companies in every sector of the economy, including not only corporate acquisitions. The tax due diligence that an acquiring corporation performs typically focuses on such matters US companies but also US subsidiaries of foreign companies. as quantifying the target’s contingent tax liabilities rather than analyzing the target’s tax accounts for potential Milbank TAARS®-type refunds. A review of the pre-acquisition tax accounts of recently acquired corporations frequently results We’ve obtained substantial refunds in most engagements. Many of our most successful engagements have been follow- in refunds. ups to other service providers.

We would be pleased to furnish you references from tax directors at other major corporations. We’re just about to settle a dispute with the IRS and they’ve said they are going to include interest in the settlement. Should we first review What are the fees for Milbank and approve their interest calculation and later have Milbank perform TAARS®? What if you don’t discover an interest review? anything favorable to our company? Generally, no. Milbank TAARS® is most productive if we review the IRS’s proposed interest calculation in a settlement (whether on administrative appeal or in Tax Court litigation) before it is agreed to. Our fee would apply only to Milbank TAARS® is offered on a reasonable contingent fee basis, adjustments beyond those already identified by you. Our review includes advice regarding terms of the settlement with all expenses absorbed by Milbank. The fee is payable only affecting interest calculations for prior years and the determination of the periods of limitations. if and when the Milbank TAARS®- generated refunds, credits or payments are actually received or credited. If we determine that the tax authorities have correctly determined interest and penalty amounts, we don’t charge anything for our services – and your company would have the comfort of knowing that it has received all refunds to which it is entitled.

We’ve had a loss in some years – will Milbank TAARS® still be relevant? And how far back in terms of tax years can we go?

Milbank TAARS® is most productive for corporations that have paid substantial deficiencies or received significant refunds within the past six years. Losses in one or more years would, however, not necessarily diminish the value of our service to your company.

Indeed, in many cases, Milbank TAARS® attorneys are able to substantially enlarge the usual federal two- or three-year limitations period for claiming deficiency interest and six-year period for allowable interest. This is frequently the case for companies engaged in tax litigation.

2 3 WHY MILBANK?

Why should we use Milbank for these services? How does Milbank differ from other service providers in this area?

Having pioneered this work over two decades ago, we believe we have developed the leading practice in identifying tax account errors and obtaining refunds. We have attracted and retained some of the most experienced and expert technical people in the field. Most clients retain us exclusively to provide this service on an ongoing basis with respect to their audit cycles.

The fact that we are a law firm would, we believe, be advantageous to you. We are in a better position to make the necessary and often complex legal judgments that are inherent in a sophisticated review of tax transcripts. Each Milbank TAARS® analysis is undertaken with the collaboration of experienced tax attorneys whose assistance in the analysis itself and in the presentation of claims is critical to maximizing client recoveries. Our attorneys are familiar with many governmental positions regarding methodologies for calculating interest and imposing and abating penalties that are not There is no substitute Can’t we just do this internally, with our publicly available or otherwise published (and some that are not even widely known within the taxing authority). We for the experience own staff using special software available make certain that each issue encountered in the course of a Milbank TAARS® engagement is presented in a way most we’ve accumulated in the market? favorable to your company as the taxpayer. and relationships we’ve With rare exceptions, corporations cannot thoroughly or As a law firm, we can pursue a claim for refund or credit through the appropriate court system – and we charge established in dealing successfully perform Milbank TAARS®-type services in-house, no additional fees for such litigation. Service providers that are not law firms cannot do that. There are significant with the IRS and other principally because it is not cost-effective to develop and maintain advantages to having the same team that identifies a claim handle it from discovery and substantiation through judicial tax authorities. internally the requisite expertise. recovery. The available software has limitations in terms of scope and Because Milbank is a law firm, client documents and information are subject to attorneys’ professional duties of functional utility. We use proprietary software to identify certain confidentiality, and our communications could have the benefit of the attorney-client privilege in the event of litigation. errors beyond those identifiable by using commercially available software. More importantly, no software can make the type of Milbank TAARS® is offered through our Tax Department, which furnishes tax advice to major corporations and financial sophisticated legal judgments about statutes of limitations and other institutions around the world. With its predecessor firms having been founded in New York in 1866, determinations about the legal effect of fund movements within a Milbank, Tweed, Hadley & McCloy LLP is now one of the world’s preeminent global law firms with approximately 600 company’s accounts. And there is no substitute for the experience lawyers providing a full range of financial and business legal services to many of the world’s leading financial, industrial we’ve accumulated and relationships we’ve established in dealing and commercial enterprises. with the IRS and other tax authorities.

We’ve already had another firm look at our transcripts, so why should we utilize Milbank TAARS®?

There is no cost to a company for a follow-up or additional review by us. Our experience is that our review often uncovers significant additional refund opportunities. Even if there are no opportunities for additional claims, tax directors appreciate knowing that nothing has been overlooked.

4 5 PROCEDURE

A substantial percentage Will this take up a lot of our staff’s time? We’ve got a good relationship with our IRS audit team – is there any of the most recently And how long does the whole process take? risk to us in “rocking the boat” with them? And what if the IRS disputes the actual claim? published list of Fortune Our service is simple and efficient and makes minimal demands on 500 corporations are company time. Usually all we need to get started are copies of a limited We are unaware of any Milbank TAARS® claim having triggered or adversely affected a tax audit. All Milbank TAARS® or have been Milbank number of pertinent tax documents, such as the affiliation schedule and claims are processed through IRS Centers, independent of audits. Audit teams rarely are aware of interest refund claims, ® TAARS clients. More first pages of tax returns. Most companies are able to furnish us these since those do not fall within their area of responsibility. We’ve always found that the IRS is genuinely interested in often than not, we documents with just a few hours of staff time. seeing that the taxpayer is properly treated in accordance with law. discover errors and determine that indeed Typically, we report back in about three to four months with our Milbank Our long track record with the IRS enables us to anticipate questions and concerns before they present problems in ® the company is entitled TAARS analysis and a statement whether any refunds are due to your the processing of a claim, and we are confident that our good working relationship with IRS personnel helps promote a to refunds or credits. company. If your company approves the filing, we then prepare and submit professional and prompt resolution of claims. the formal claim. Our claims are detailed, substantiated and accurate, If, however, the IRS technician denies a Milbank TAARS® claim and we cannot convince the technician otherwise, we, with so that the IRS or other taxing authority is usually able to act on them client approval, will appeal the denial. And if the appeal is unsuccessful, we will, upon mutual agreement, litigate the denial without need for further questions. We’re proud of our record in this area at no additional cost to your company. and know that claims on Milbank letterhead are recognized as professional and supportable, with the result that the vast majority of our claims are processed as a routine matter. In the case of federal refunds, which are How do I determine if my company is eligible for Milbank TAARS® handled by the IRS Center in Ogden, Utah, our clients generally receive a refunds? refund check within three months (although sometimes “netting” refunds take longer). To determine whether your company has the potential for Milbank TAARS® refunds, Milbank recommends meeting with your company’s principal tax executive and key members of his or her staff. The meeting usually lasts less than an hour and provides a full opportunity to address questions about the objectives and workings of Milbank TAARS® and the What do we have to do if we want to engage potential benefits to your company. Based on that meeting, Milbank will state its view of whether Milbank TAARS® is ® Milbank TAARS ? And what steps does likely to be productive for the company and discuss the specific terms of an engagement. Milbank take? For additional information, please visit the Milbank TAARS® website at www.taars.com, or for more background on You would sign an engagement letter and a standard-form power of Milbank’s global legal practice generally, please visit www.milbank.com. attorney that lets the IRS or other taxing authority furnish us with a copy of your corporation’s tax transcripts. As noted above, you also have to provide a limited number of tax records. Usually, that’s all that’s required of the client.

We would then order the transcripts and analyze them along with related tax documents and prepare draft claims for submission to you for approval. If approved, we prepare, file and pursue the claims and conduct whatever discussions with the IRS or other taxing authorities may be necessary.

6 7 MILBANK TAARS® MANAGEMENT TEAM

Tonya J. Blocker* Gilbert Polt Technical Manager Deputy Counsel 212-530-5642 New York [email protected] 212-530-5321 [email protected]

Glenn S. Gerstell Francine Silverman* Managing Partner Managing Technical Director Washington, DC New York 202-835-7585 212-530-5426 [email protected] [email protected]

Crystal Nixon* Janice Van Stolk Technical Analyst Director New York Washington DC 212-530-5368 202-835-7573 [email protected] [email protected]

William C. Perdue* Warren Waxman* Technical Director Technical Director 212-530-5656 New York [email protected] 212-530-5582 [email protected]

Joseph M. Persinger General Counsel New York 212-530-5072 [email protected]

*Not admitted to practice law in any state

8 © 2009 Milbank, Tweed, Hadley & McCloy LLP. All rights reserved. Attorney Advertising. Prior results do not guarantee a similar outcome. (This legend required by New York State Bar rules.) FAQs ABOUT MILBANK TAARS®

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