EXPERTISE

David enjoys exploring areas which other tax lawyers regard as highly technical specialties. Accordingly, he has been involved in an extremely wide range of tax issues. Although the phrase “junk artist” comes to mind, David thinks that experience in many areas is a valuable source of arguments-by-analogy in tax controversies. 

In this process, David worked for years on the largest tax case ever litigated, with many billions at stake over the application of one part of a single Code section.  He has also worked on highly technical tax controversies arising in major bankruptcies, and in tax aspects of large criminal cases.  David worked on a long-running Global High Wealth audit with over $100 million in asserted tax deduction changes, as well as an agricultural cooperative tax law case involving hundreds of millions for a Fortune 50 client.  At the other end of the spectrum, David also has done essentially pro bono work on small matters where he simply felt that an unsophisticated taxpayer was being badly treated. 

The amounts in dispute in David’s cases range from less than $50,000 to more than $5 billion. In virtually every case, David has been part of a team which has obtained positive, cost-effective results. A favorite specialty is spreadsheet modeling of both complex tax disputes and large planning transactions, which he thinks has unexpected persuasive power in arguments with other lawyers – who often have difficulty defeating an argument made with numbers.

BACKGROUND

David grew up in a North Dakota family whose hero was Paul Shorb, said by many to be the best Washington tax lawyer ever, and Paul rose to be a name partner at the dominant D.C. firm, Covington & Burling.  Paul represented clients like General Motors and Conrad Hilton, and was more than generous to a favorite niece like David’s mother. David took it as given that being a Washington tax lawyer was the best thing you could be.  The Vietnam war deflected him to a three-year tour as a Captain in the Air Force General Counsel’s office in the Pentagon.  Once released from active duty, David joined Caplin & Drysdale, the pre-eminent Washington tax firm, with hopes of shadowing Paul Shorb’s footsteps.  Marriage to a rising law professor precipitated a move from D.C. to her home state of California, and then a long run as the senior tax partner at a boutique law firm, followed by 10 years in a major firm tax practice in Los Angeles.

PROFESSIONAL AFFILIATIONS

David has been an active member of the Planning Committee of the USC Tax Institute since 1981. He regrets that he is still not the senior member of the Planning Committee.

David has not regularly been a member of the LA County Bar Tax Section, and was therefore especially honored to be awarded the Section’s Dana Latham award for lifetime tax law achievement.  He was also recognized as a top Los Angeles tax lawyer in all editions of Best Lawyers in America from 1987 until 2011 (when he moved his practice to Orange County).

PUBLICATIONS & SPEAKING

David has written more than 20 major tax articles and book chapters, many as part of speaking engagements at the USC, NYU and other tax institutes. A complete list is set out here.  Click here for a link to David’s article “Tax Adventures in Litigation Land” published in the Journal of Taxation of Investments, Fall 2018.

David is particularly proud of his articles developing the application of finance theory to numerical modeling of tax planning and policy matters.  For example, he believes that his 1992 article exposing the misconceptions in the conventional analysis of the tax economics of life insurance – academics uniformly assumed that life insurance is a “loophole” because insurance proceeds are non-taxable – was instrumental in heading off a misguided tax “reform” which was being accelerated by publication of a Treasury proposal to radically change life insurance taxation.

David enjoys applying the economic analysis tools developed in these theoretical articles to practical tax controversy work.  One delightful quantitative project involved the rule that agricultural cooperatives can dividend the profits from their “regular” business to members without paying corporate tax. The IRS argued on audit that an agricultural supply cooperative’s ownership of a hardwood forest in Northern California was unrelated to the cooperative’s business of supplying its members with cardboard boxes made of southern pine.  David defeated this argument by proving, statistically, that increases in softwood-based cardboard costs closely tracked increases in hardwood lumber prices. Thus, profits from the hardwood forest hedged against the strong fluctuations in cardboard prices, a major part of members’ shipping costs.  The satisfying success of this argument allowed the cooperative to treat hardwood lumber profits as part of its “regular” box business, and thus distribute profits from the hardwood business to its box-buying members without having to pay corporate tax on the hardwood profits.

Beware, however – an innocent query about “other stories?” can produce an unwelcome stream of such quantitative war stories.

TEACHING 

David has taught eight semester-length tax courses, at USC, UCLA and Harvard Law Schools. The subjects were corporate and partnership tax, and quantitative analysis of tax policy and planning issues. The quantitative tax policy course at Harvard, which was particularly interesting to teach, is described in Anderson, Quantitative Analysis, Harvard Law School Bulletin (Spring 1984).  After these experiences, David decided he liked teaching to learn, but retired gracefully when he concluded that the third time through a course was just too repetitive for someone with a “junk artist” instinct.

ACADEMIC BACKGROUND

David graduated from Yale College at age 20 and the University of Chicago Law School at age 23. At this point he realized that he had unintentionally exposed himself to the draft for a period too long to be covered by a judicial clerkship.  Leveraging his unexpected success in law school, he was fortunate to obtain a direct commission as an Air Force officer assigned to the Secretary of the Air Force General Counsel’s Office. In his years in the Pentagon, he learned much more about the contracts underlying the F-111 program than any reasonable person would want to know.