Overview
Steven A. Felsenthal is a highly experienced partner who advises business owners, executives, and closely held companies in a wide range of areas including income tax planning and controversies, mergers and acquisitions, debt restructuring, estate planning and administration, strategic business planning, and real estate transactions. His work in real estate extends to the development and financing of subsidized housing, and he possesses deep expertise in the taxation of partnerships and real estate investments.
Steve has advised clients on numerous complex, tax-free real estate exchanges involving individuals, partnerships, LLCs, and corporations, as well as other tax-advantaged transactions. He also represents high-net-worth families and family offices, assisting them with wealth preservation strategies, generational succession planning, and navigating sensitive family conflicts.
Many of Steve’s client relationships span over 30 years, reflecting the trust and value he brings through his practical, creative legal solutions. His comprehensive legal knowledge allows him to address complex problems with clarity and effectiveness. He is also an experienced expert witness in tax disputes and professional malpractice cases involving attorneys and accountants.
Widely respected in the legal community, Steve has been recognized repeatedly as a Super Lawyer. In 2023, he joined Raines Feldman Littrell LLP after serving as a founding partner at Sugar Felsenthal Grais & Helsinger LLP.
Education
- J.D., Harvard Law School
- B.A., University of Illinois (Urbana), High Honors, Phi Beta Kappa
Admissions
- State Bar of Illinois
- State Bar of Michigan
- United States Tax Court
Significant Engagements
Federal Income Tax Planning & Litigation
- Represented substantial privately held agricultural company in structuring sale of business divisions. Obtained an IRS private letter ruling for tax-free split-off of the two divisions then handled tax planning and negotiation in subsequent sale of spun-off divisions to publicly traded strategic purchaser.
- Obtained an IRS private ruling allowing a tax-free non-pro rata split off of two family owned businesses due to personality differences between third generation siblings. Following split off, retained over long term for general corporate and tax representation by one company and numerous family members.
- Defended a manufacturing company in IRS audit that resulted in U.S. Tax Court litigation in which adjustment for treatment of expenses related to product prototypes would have resulted in a $2.5 million adjustment and a change in accounting method that would have negatively affected the competitive position of the business going forward. Resolved without trial for $35,000 without change in accounting method.
- Advised partners in real estate partnership on capitalization of existing mortgage debt, structuring transaction so as to reduce taxable income from cancellation of indebtedness.
- Defended real estate developer in IRS audit that resulted in U.S. Tax Court litigation in which his status as a qualified real estate professional for purposes of the passive activity loss rules was challenged. Developed a strategy at the audit stage that resulted in settlement of a $6 million adjustment for $6,000 without trial.
- Testified as expert witness about standards of tax practice in attorney malpractice case arising out of promotion of offshore trust tax shelter strategy.
- Testified as expert witness about standards of tax practice in multiple accountant malpractice cases related to Son of BOSS and similar tax shelter transactions. Assisted defense counsel in developing strategy that resulted in advantageous settlements for client.
- Represented manufacturing company in $35 million sale to strategic public buyer while retaining certain factories, including pre-sale restructuring to minimize state income taxes on transaction. Assisted in subsequent sale of retained factories.
- Advised principal shareholders in taking private transaction of manufacturing company involving reverse stock split and appraisal rights for public shareholders.
- Assisted manufacturing company in tax and corporate structuring for expansion of operations to Mexico, including establishment of maquiladora.
- Advised manufacturing company on near simultaneous strategic acquisitions of two competitors involving concurrent refinancing of company debt with new lender, which required that neither target company be aware of the other transaction until after closing.
- Represented chief executive officer in negotiation of advantageous employment agreement with public consumer products company. Advised company on tax and restructuring issues in face of financial difficulties.
- Represented large publicly held company in roll up of numerous construction service businesses in the Midwest region.
- General counsel to manufacturing company with hundreds of employees that was supplier to big box retailers.
- Represented substantial privately held agricultural company in structuring sale of business divisions. Obtained an IRS private letter ruling for tax-free split-off of the two divisions then handled tax planning and negotiation in subsequent sale of spun-off divisions to publicly traded strategic purchaser.
- Participated in development and formation of large chain of consumer retail service outlets. Continuing general corporate representation and assisted in obtaining operational financing. Represented company in strategic sales of outlets.
- Represented national retail chain through growth to over 60 company-owned stores and over 40 franchised stores in general corporate matters, real estate leasing and property acquisition, franchisee relations, debt financing transactions and ultimate advantageous sale of all stock of the company to strategic buyer while retaining the real estate on long term advantageous lease to Buyer. Retained by Buyer for other legal work following closing of the transaction.
- Continuing representation of proprietary trading firm since formation, including initial capital raise and follow on investments, development and implementation of employee equity incentive plan and general corporate issue.
- Representation of start up transportation company that has grown to one of the largest providers of livery services in the Chicago area in initial formation, equity offering, and follow on financing.
- Represented real estate developer in acquisition of manufacturing building in Chicago, including successful renegotiation of financing. Assisted in converting building to residential condos and first floor commercial rental space. Negotiated leases of commercial space.
- Structured acquisition of a major building in Chicago for real estate developer by purchasing defaulted debt of the owner, restructuring the debt and later acquiring the building through a deed in lieu of foreclosure, and subsequent sale of the building for substantial gain after short term hold to strategic buyer.
- Counseled numerous clients in connection with development, acquisition and redevelopment of federally subsidized housing and related tax issues in connection with allocation and syndication of tax credits.
- Advised numerous real estate syndicators in projects throughout the United States.
- Represented tenants in negotiating numerous downtown Chicago office leases.
- Counseled estate on treatment of investment in Madoff ponzi scheme for federal income and estate tax purposes.
- In connection with transaction to take private a manufacturing company, integrated estate planning for principal shareholders into the transaction to pass ownership of the company to next generation at significant estate and gift tax savings.
- Represented numerous wealthy family in estate and tax matters and family relations issues.
- Successfully settled multiple lawsuits that had been ongoing for a number of years before we became involved. Continued to represent the company as general counsel and in future litigation, including intellectual property disputes, environmental disputes with regulatory agencies and employment matters.
Publications, Recognitions and Speaking Engagements
Selected by peers as a Leading Lawyer in: Business and Individual Tax Law; Trust, Will & Estate Planning Law; Closely & Privately Held Business Law (2012-2018)
Selected for inclusion in Illinois Super Lawyers (2005-2007, 2009-2012, 2022-2025)
Each year Premier Tax Lawyers (PTL) researches and recommends leading tax attorneys across the United States. PTL lists only one attorney and firm in each city and inclusion to the guide is by invitation only.
Martindale-Hubbell AV Preeminent Rated, Chicago’s Top Rated Lawyers, Business and Commercial (2012); 5.0/5.0 Overall Client Rating – Martindale.com
Professional Affiliations
- American Technion Society, West Central Region, Board of Directors (1977-present)
- Instructor in Law, Illinois Institute of Technology/Chicago Kent College of Law (1978-1980)
- Chicago Council of Lawyers