Gerald W. Kelly
Mr. Kelly has devoted his legal career to representing clients entangled in major disputes with the Internal Revenue Service (the "IRS" ). He has represented businesses and individuals before the agency's collection examination, and appeals divisions. Additionally, Mr. Kelly represents clients that are the targets of criminal tax investigations.
With over one hundred appearances in the United States Tax Court, tax litigation is a significant part of Mr. Kelly's practice. He has also argued before the U.S. Circuit Court of Appeals and appeared before the U.S. District Courts, where he has represented clients involved in a wide variety of civil and criminal matters. Mr. Kelly began his professional career with the IRS in 1991, where he was assigned to field offices in the Washington, D.C., metropolitan area. As a Revenue Officer, Mr. Kelly was responsible for civil investigations and enforcement actions. He was also trained as an Offer in Compromise Examiner and evaluated settlement proposals submitted by individual and corporate taxpayers.
Mr. Kelly has appeared on ABC News concerning IRS procedures and has also provided commentary to CNN, The Washington Post, The Washington Times and other major news sources. Moreover, Mr. Kelly has served as a guest lecturer on IRS controversies at his alma mater, the University of Baltimore School of Law, and the Maryland Volunteer Lawyers Service.
Mr. Kelly's commitment to his community extends to those those unable to afford an attorney. He has been honored with the Maryland Volunteer Lawyers Service Educator of the Year Award in 2008 and the Maryland State Bar Association J. Ronald Shiff Memorial Pro Bono Award in 2010. Mr. Kelly is a member of the Maryland State Bar Association Tax Council and is a member of its pro bono subcommittee. Mr. Kelly received the highest possible rating from his peers, and is AV rated by Martindale- Hubbell. He was also selected for inclusion in Maryland Super Lawyers for his peer-recognition and achievements in the field of taxation. Mr. Kelly is a faculty member of the National Business Institute and teaches continuing legal education courses on representing clients before the Internal Revenue Service. Moreover, he is consultant with the Borek Group, a firm that provides professional education to law and accounting firms.
• Offer in Compromise: A home improvement company owed the IRS approximately $1,000,000. The Offer in Compromise submitted by its accounting firm was rejected, as the IRS determined the liability could be paid in full. Mr. Kelly represented the company at the appeals level and negotiated a settlement of $450,000 to be paid in installments over a twelve-month period.
• Installment Agreement: Negotiated an installment agreement of $100.00 per month for a client that owed the IRS approximately $150,000,000.00.
• U.S. Tax Court Litigation – IRS Abuse of Discretion: Asserted claims in the United States Tax Court that a Settlement Officer had failed to consider a Due Process appeal case as required by the Internal Revenue Code and Treasury Regulations; the IRS Area Counsel Attorney agreed and informed the Tax Court that the case had been improperly handled by the Appeals Division. Levy and seizure action were not taken and the case was remanded to Appeals for the review required by law.
• Money Laundering: Represented clients charged with laundering narcotics proceeds and structuring transactions to avoid their reporting to the IRS; though facing a maximum prison sentence of twelve years, after extensive negotiations with the U.S. Attorney’s Office, clients were sentenced to serve one day in jail and a period of supervised release. A $2.4 million forfeiture order was settled for $100,000.
• Offer in Compromise: Represented a chiropractor whose Offer in Compromise was rejected after the IRS determined that the tax liability of $850,000 could be paid in full; on appeal the IRS accepted an offer of $350,000.
• “Like-Kind” Exchange: Represented a client where the IRS refused to recognize a “like-kind” exchange following an audit. On the eve of trial in the U.S. Tax Court, the IRS conceded the case and the client realized savings of approximately $1.2 million.
• U.S. Tax Court Settlement: Argued that a client’s deduction of tuition paid to Harvard Business School was a business expense; prior to trial, the IRS conceded, based on the government’s litigation hazards, that 75% of the tuition was, in fact, a bona fide business expense.
• Unlawful Seizure of Real Property: Obtained a temporary restraining order from the U.S. District Court after the IRS seized and sold a family’s farm and home in the Dallas, Texas area; successfully argued that the taxpayers were entitled to recover their property. This case was reported on extensively by a national television network affiliate in Dallas, Texas.
• Disallowed Business Expenses: Successfully represented a prominent physician before the Appeals Division of the IRS following a notice indicating that the physician would be assessed an additional $240,000 in taxes, penalties, and interest based on expenses of his medical practice; negotiated a settlement resulting in a revised liability of $45,000.00.
• Trust Fund Recovery Penalty Litigation: Represented the CEO of a government contractor who was assessed a Trust Fund Recovery Penalty due primarily to the malfeasance of an accountant hired to oversee the company’s financial and tax operations. Successfully defended against the government’s motion for summary judgment and negotiated a settlement resulting in savings to the client of over $400,000.00.
• Levy Action against Government Contractor: Represented a successful and growing government contractor whose accounts receivables were attached by an IRS Revenue Officer; successfully advocated for the release of all levies, the imposition of which would have forced the client to cease its operations.
• Criminal Tax – Plea Negotiations: Successfully negotiated an agreement with the U.S. Attorney’s Office for client referred to the Department of Justice for criminal prosecution for certain tax felonies; client pled guilty only to misdemeanor tax charges and served a period of home detention, enabling him to continue working in the IT industry.
• U.S. Tax Court Trial – Worker Classification: Successfully litigated case in U.S. Tax Court after the IRS challenged client’s claim that he was an independent contractor and not an employee. This resulted in a proposed tax assessment of approximately $160,000. Mr. Kelly tried the case in U.S. Tax Court, after which the IRS offered a full concession.
• Interest Abatement: Asserted an interest abatement claim based on an IRS Appeals Officer’s failure to resolve certain partnership issues over a nine-year period; successfully negotiated an agreement whereby the IRS abated a significant percentage of the interest that accrued during the period, resulting in aggregate savings to the clients in excess of $400,000.00.
• Innocent Spouse: Successfully represented client whose former spouse had embezzled large sums of money from her employer after IRS alleged that client received the benefit of the embezzled funds and knew, or should have known, that his wife was a thief. Prior to the scheduled trial, the IRS conceded the case and agreed that the client should be relieved of any obligation to pay tax on the ill-gotten funds.
• University of Baltimore, J.D. (1996)
• University of Maryland, B.A. (1990)
• Mr. Kelly has completed graduate course work in accounting and is presently a CPA candidate
• Supreme Court of the United States
• U.S. Court of Appeals for the Fourth Circuit
• U.S. Court of Appeals for the Seventh Circuit
• U.S. District Court for the District of Maryland
• U.S. District Court for the District of Columbia
• U.S. District Court for the Central District of Illinois
• U.S. District Court for the Northern District of Illinois
•U.S. Tax Court
• U.S. Court of Federal Claims
• Maryland State Bar Association
• American Bar Association