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The Liberty Global decision must be given full consideration by taxpayers in determining whether a recommended tax planning strategy, including an entity restructuring, acquisition or divestiture, and regardless of whether such transaction is completely effectuated within the U.S. or involve a step or series of steps consummated in cross-border jurisdictions, will be respected by the Internal Revenue Service upon audit and review and further, by a court of applicable jurisdiction in the event of… Read More

Senator Wyden (D-Ore) who serves as Minority Chief on the Senate Finance Committee of Congress, has been highly critical of tax planning strategies and corporate tax shelters. During the Biden Administration and then Majority Chief of the SFC, Senator Wyden proffered reforms to partnership taxation and several are quite controversial. Senator Wyden has not forgotten about this list and should the Congress tilt back to the Democratic Party these "reforms" may well be given first consideration f… Read More

The Tax Court's holding and analysis in Temnorod v. Commissioner TC Memo 2025-127, reminds tax professionals and their clients (taxpayers) that the capitalization rules of Section 263 override the business deduction rules under Section 162 in determining the tax acquisitions to acquisition costs. In many business planning and transactions, expenditures are attempted to be deducted by the parties to the transaction in computing taxable income. In various instances, as reflected in a legion of ca… Read More

Limited partners in partnerships, or entities treated as partnerships for federal tax purposes, have tried through various methods and arguments that the distributive share of a limited partner’s income sourced from services or active business operations is not net income for self-employment taxes under the limited partner exception in Section 1402(a)(3). The Tax Court has not been that receptive to these reporting positions taken and upon IRS challenge has repeatedly held that the determi… Read More

The expanding universe of research based systems, cloud storage and software and generative AI platforms, will continue to present challenges and burdens to the proper application of our laws, including tax laws, with due regard to the attorney-client privilege, accountant-client privilege, the work product doctrine and the tax compliance rules and norms contained in the Internal Revenue Code. The increasing prompts to do legal research through AI may have good intentions and may well be support… Read More

Comment: Tax professionals looking at the statutory language of Section 245A may, at first blush, consider it easy to easy to "open the door" in claiming the 100% DRD for dividends from SFCorps in advising their clients. While in straight forward situations the "door is open", the width of the provision is far narrower than a literal read of the statute may otherwise suggest. One must go through a gauntlet of limitations and exceptions to get to where the DRD is allowed. Additional guidance… Read More

In Denham Capital Management LP, the Tax Court reaffirmed its commitment to applying the functional analysis test in determining whether the partners were "generally akin" to passive investors. The Tax Court concluded that five limited partners were more akin to employees rather than passive investors. Read More

The extent of the foreign company's geographical presence or "footprint" in the United States must be evaluated as a preliminary matter as well as current and/or anticipated sources of U.S. and non-U.S. source income from such business operations and associated enterprises. That includes careful review of Section 864(b) (trade or business) as well as treaty provisions, to the extent relevant, with respect to the presence of a "permanent establishment' (or not) in the U.S. Transfer pricing r… Read More