The IRS recently took a shot across the bow of limited partners of investment management companies with respect to the application of self-employment tax (or, SE tax, for short). In fact, the ruling could potentially affect limited partners (including LLC / LLP partners) in every industry. While this tax issue has been fought on several levels over the past 20 or more years, it had gone dormant since 1997. Now, an IRS Chief Counsel Advice (ILM 201436049 (05/20/2014)), released on September 5, 2014, (the “ILM”) demonstrates that the IRS may be ready to renew the fight.
In late July, Treasury Secretary Jacob Lew sent a letter to key members of Congress calling for the nation to embrace a “new sense of economic patriotism” and stop supporting corporations that are moving their tax home out of the U.S. to reduce their corporate income tax burdens by taking […]
As part of a massive overhaul of the regulations governing our country’s financial system, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in July 2010. Included in this regulation was an enhancement to the U.S. Securities & Exchange Commission (“SEC”) Whistleblower Program with the hopes that through providing financial incentives (awards), individuals would be willing to provide tips to the SEC and other regulators regarding fraud. Based on the activity of the Program and the awards provided, it appears that the Program has assisted the regulators in its attempt to protect the investors by prosecuting fraudsters.
The IRS has recently issued a ruling confirming that offshore funds can, in certain circumstances, defer incentive fees payable to U.S. asset managers. Revenue Ruling 2014-18, released by the IRS on June 10, 2014, (the “Ruling”) opens a deferred compensation pathway that has been closed since 2008. Moreover, the ruling […]
Bitcoin, the virtual currency that tech savvy consumers can use to purchase anything from the latest music on iTunes to a Lamborghini off a showroom floor, has been around since 2009 but just recently hit the radar of U.S. regulators. Recently, the IRS issued Notice 2014-21, which provides clarification on […]
A few months back I wrote about the Nelson case, a Tax Court case dealing with a U.S. individual who claimed she was a “trader” for federal income tax purposes [http://withumonwallstreet.com/2013/12/04/another-investor-in-trader-clothing/]. In that piece I suggested that the trader / investor analysis being utilized by the modern-day Tax Court had […]
Every broker or dealer (“BD”) is required to maintain a specified level of net working capital, as defined in Securities Exchange Act Rule 15c3-1. The dollar threshold is the greater of the regulatory minimum, which ranges from $5,000 to $1.5 million, or a specified percentage (generally 6-2/3) of the BD’s […]