tax

Limited Partners May Be Subject to Self-Employment Tax

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.

Whistleblower Program

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.

International Tax Loopholes – The Playing Field Is Not Level

 A recent Bloomberg article reported that the offshore cash hoard of U.S. multinational companies had risen by $206 billion last year as the companies continued to avoid U.S. taxation (see article here http://www.bloomberg.com/news/2014-03-12/cash-abroad-rises-206-billion-as-apple-to-ibm-avoid-tax.html).  Personally, I find it amazing that the popular press and its American readership see prudent corporate tax […]

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