My Brief Career as an Environmental Tax Lawyer

Posted on April 28, 2015 by Michael McCauley

On April 15 of this year, I thought about the following quote:

 

"Taxes are what we pay for civilized society."

--Oliver Wendell Holmes Jr.

U.S. Supreme Court Justice

 

And then I reminisced a bit.

My career as a federal tax lawyer was very brief. About 25-30 years ago, I represented a client which thought it was paying too much in "Superfund" taxes.  These taxes are levied on companies which manufacture and produce chemicals. The money is then used by U.S. EPA and others to fund hazardous waste disposal site clean-ups.

I certainly was not a tax lawyer. But one of our senior partners who was in charge of managing work for a chemical company client needed help. He was an excellent tax lawyer, but he said he knew nothing about Superfund taxation. Since I was doing a lot of Superfund clean-up work at the time, I drew the short straw for arguing the merits of this matter before the IRS.

I can't remember now whether the company had a good legal basis for contesting the tax. It might have had something to do with the fact that the client company recycled some amount of used chemicals into making new product. Thus, the Company believed, some of the same chemicals were taxed twice -- once when they were originally manufactured and then again when they were recycled into new product. I do remember that the client's top management thought that the Superfund tax on chemical production in general was very "unfair." [The client never got to the point of considering the "fairness" of the strict, retroactive, joint and several liability regime for generators under the Superfund Law.]

The Company President and I went out to Washington to discuss the merits of our case with officials of the IRS and the Treasury Department. We got out of our cab in front of the Internal Revenue Service Building on Constitution Avenue one bright sunny morning in April. I looked up at the imposing building. Emblazoned in granite across the top of the building was the above quote from Justice Holmes.

I turned to my client and asked him to look up and read the quote. Then I said, "Jon, this is why we are not probably going to win our case here today." And we didn't.

The Company was not interested in pursuing a judicial appeal. So ended my career as a tax lawyer.



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