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Archive for the ‘Tax Controversies’ Category

Charles Egerton and Edward Waters on the Tax Consequences of a Mitigation Bank in the Journal of Passthrough Entities

Published: June 1st, 2018

By: Edward A. Waters Charles H. Egerton

Charles H. Egerton and Edward A. Waters, attorneys in Dean Mead’s Tax Department co-authored the article, “Update of the Tax Consequences of the Formation and Operation of a Mitigation Bank”, published in the Tax Tip column of the Journal of Passthrough Entities, Volume 21, Issue 3, May-June 2018, a publication of CCH.

Compensation to Law Firm Shareholder-Employees Disallowed by Tax Court

Published: March 17th, 2016

By: Stephen R. Looney

In Brinks,[1] the Tax Court once again applied the independent investor test to recharacterize compensation paid by a professional corporation, a law firm, to its shareholder-employees as nondeductible dividend distributions, and held the corporation liable for accuracy-related penalties for mischaracterizing the dividends as deductible compensation. This case should serve as a warning for many mid-size […]

Steve Looney Speaks at 60th Annual William & Mary Tax Conference

Published: November 12th, 2014

By: Stephen R. Looney

Steve Looney, shareholder and chair of Dean Mead’s Tax Department spoke at the 60th Annual William & Mary Tax Conference in Williamsburg, VA, on November 7, 2014. He presented on “Reclassification Risks For Compensation Paid by S and C Corporations to Shareholder-Employees“. In addition to covering unreasonably high compensation in the “C” corporation context and unreasonably […]

IRS Rules That Members of LLC Are Not “Limited Partners” for Purposes of Avoiding Self-Employment Tax

Published: September 24th, 2014

By: Stephen R. Looney

  In ILM 201436049 (9/5/2014), the IRS found that members of a management company LLC (“Management Company”) were not “limited partners” within the meaning of Section 1402(a)(13) and therefore were subject to the self-employment tax on their distributive shares of income of the Management Company.   Under the facts of the ruling, a limited liability […]

Can a Partner of a Partnership or a Member of a LLC Be treated as an Employee?

Published: August 21st, 2014

By: Stephen R. Looney

  On 6/13/2014, Curtis Wilson, IRS Associate Chief Counsel (Passthroughs and Special Industries) stated that he is concerned about the rumored use of a disregarded entity to enable a partner to be treated as an employee for withholding purposes.[1]  Under the purported structure, a partnership creates a wholly-owned entity that is disregarded for federal income […]

IRS Issues Final Regulations on Back-To-Back Loans

Published: July 24th, 2014

By: Stephen R. Looney

  On July 23, 2014, the Department of the Treasury issued Final Regulations on basis increases for back-to-back loans involving S corporations.  The Final Regulations adopt the proposed regulations without substantive change, except for changes allowing a retroactive effective date (which is a positive change to the Proposed Regulations) and minor clarifying revisions.  The Proposed […]

IRS RECOGNIZES ALL SAME SEX MARRIAGES

Trust and Estate Attorney Orlando
Published: August 29th, 2013

By: Matthew J. Ahearn

Today, the United States Treasury Department and the Internal Revenue Service issued a very significant and consequential ruling, Revenue Ruling 2013-17, addressing tax issues arising from the recent U.S. Supreme Court decision of U.S. v. Windsor, 133 S. Ct. 2675, issued on June 26, 2013. For federal tax purposes, the IRS will now recognize all same-sex […]