Microsoft Corp. won a small victory on Wednesday in its showdown with the Internal Revenue Service over the agency’s use of outside counsel. A federal judge granted the company’s request for an evidentiary hearing to explore the IRS’s hiring of Quinn, Emanuel, Urquhart & Sullivan for a tax audit of the technology giant. According to Microsoft, the IRS’ move to bring in Quinn Emanuel last year to help conduct the audit is improper because the agency “is attempting to outsource an inherently governmental function.” Microsoft is also pursuing a separate lawsuit to get information about the IRS’ earlier use of Boies, Schiller & Flexner for the audit.
Microsoft claims that the IRS has improperly assigned key audit duties to Quinn Emanuel, including the task of interviewing Microsoft employees. Microsoft has been represented from the start of the dispute by Baker & McKenzie, and in late May added Bartlit, Beck, Herman, Palenchar & Scott to its team.
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