Last week, Sen. Warren reintroduced her “Ultra-Millionaires” wealth tax proposal to the Senate. Query her timing. The measure has the proverbial snowball’s chance in Hell of being enacted by this Congress.Perhaps the Senator...more
In Soroban Capital Partners, LP v. Commissioner, the U.S. Tax Court determined that the exception to net earnings from self-employment in Section 1402(a)(13) of the Internal Revenue Code of 1986, as amended (the “Code”) ...more
A U.S. Tax Court ruled on November 28, 2023, that limited partners in a partnership may be obligated to remit self-employment tax if they are not actually “limited” with respect to their involvement and relationship to a...more
Private equity, hedge fund, and other investment fund sponsors should be aware of the recent development in the Internal Revenue Service’s (IRS’s) audit campaign with respect to potential liability for Self-Employment...more
Taxpayers have long attempted to limit the application of the Self-Employment Contributions Act (SECA ) taxes to income that is akin to employment income and not investment, or passive income, by relying on Code §1402(a)(13)....more
The Payroll Protection Program (PPP) under the CARES Act can provide eligible businesses with a forgivable loan from the government to be used to keep and pay employees, and for certain other purposes, and to help businesses,...more
In general, self-employed individuals are subject to employment taxes on their net earnings. The wages paid to individuals who are non-owner-employees of a business are also subject to employment taxes, regardless of how...more
The IRS recently released temporary regulations clarifying that an employee of a disregarded entity is liable for self-employment tax if the employee is a partner in the partnership that owns the disregarded entity. See...more
In new regulations issued on May 4, 2016, the IRS clarified that partners in a partnership (including members of a limited liability company that is taxed as a partnership) that owns a subsidiary that is a disregarded entity...more
Employees of partnerships, LLCs or their disregarded entity subsidiaries who receive equity in such entities may be treated as “self-employed” for tax purposes. On May 3, 2016, the US Treasury Department (Treasury)...more
The Treasury Department (Treasury) and the Internal Revenue Service (Service) have issued temporary regulations (Regulations) clarifying the federal employment tax treatment of the owners of partnerships and other entities...more
Tax practitioners often face this issue: client is a limited liability company taxed as a partnership for federal income tax purposes (“LLC”), and it wants to issue equity to a current employee (“Individual”) without...more
The Office of Chief Counsel of the Internal Revenue Service (the "IRS") recently issued internal guidance in the form of a Chief Counsel Advice (the "CCA") indicating that the IRS has taken the position that the "limited...more
A recent response by the Internal Revenue Service Chief Counsel (CCA) to an inquiry from one of its field office agents addressed the question of whether management fees earned by an investment manager organized as a limited...more
In CCA 201436049 the IRS concluded that owners of an investment fund management company LLC were not eligible for the limited partner exception to Section 1402 self-employment taxes. Ultimately the IRS found that the income...more