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TREASURY FINAL REGULATIONS ADDRESSING USE OF US LLCS TO DISGUISE BENEFICIAL OWNERSHIP

The post under the link below concerns new Treasury final regulations addressing the use of U.S. single-member LLCs to disguise foreign beneficial ownership of the LLC and its assets.

Here is the link:  http://www.lexology.com/library/detail.aspx?g=1d2a521d-d225-4cfe-a58a-9d610bdb2101&l=7TAYUBB

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DISGUISED SALES

The concept of “disguised sales” is key in federal partnership taxation; it is thus key for most multi-member LLCs.  The blog post under the link below provides a brief but up-to-date and very clear explanation of the concept.

Here is the link:  http://www.taxlawforchb.com/2016/10/happy-halloween-partnership-disguised-sales-get-it/

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SEMINAR ON NEW PARTNERSHIP AUDIT RULES

On January 23, 2017, I will be teaching a 1.5 CPE-credit seminar from noon to 1:30 PM at the Manchester Chamber of Commerce (54 Hanover Street) on how to advise LLC clients about the IRS’s draconian new partnership audit rules. Lunch will be supplied. For further information, please call me at (603) 856-7172. To enroll, please e-mail Amanda Nelson at anelson_law@yahoo.com.

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THE NEW PARTNERSHIP AUDIT RULES

The new partnership audit rules under the Bipartisan Budget Act of 2015 are extremely problematical not only for large LLCs taxable as partnerships but also for small ones.  These rules radically need not just interpretative Treasury and IRS regulations and rulings but Congressional amendment.  A new bill for that purpose has been introduced.  The post under the link below provides an excellent summary of the bill.  Every LLC lawyer whose clients include LLCs taxable as partnerships should have at least a general awareness of the bill’s contents.

Here’s the link:  http://www.lexology.com/library/detail.aspx?g=8df43642-afda-47de-b72f-544c5e6313e6&l=7T9NXGH

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RESPONSIBILITY FOR FEDERAL EMPLOYMENT TAXES

The managers of LLCs, like those of other business entities, must make timely payment of federal payroll taxes owed in respect of their employees; if they don’t, they may face serious IRS consequences.  In the new post under the link below, Lou Vlahos of the FarrellFritz law firm discusses a recent Tax Court case concerning a corporate “responsible person” issue.  The principles underlying the case apply equally to LLCs.

Here’s the link:  http://www.taxlawforchb.com/2016/11/when-irresponsible-partners-are-responsible-persons/

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TAX ISSUES IN PURCHASES AND SALES OF BUSINESS ENTITIES

If your practice involves forming LLCs, I can guarantee you that before long, it will also involve assisting your LLC formation clients in buying and selling LLCs and other business entities.

The following post by Lou Vlahos of the FarrellFritz law firm contains an excellent summary of several key federal tax rules governing these sales and purchases.

http://www.taxlawforchb.com/2016/10/acquisitive-deals-capitalized-costs-and-termination-fees/

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NEW PARTNERSHIP TAXATION REGULATIONS

On October 5, 2016, the Treasury Department released important new regulations governing major issues in partnership taxation.  As readers will know, partnership taxation is by far the most common federal income tax regimen of multi-member LLCs.  The post under the link below provides a brief but excellent summary and evaluation of the new regulations.

Here is the link:

http://www.lexology.com/library/detail.aspx?g=2d4d5537-f684-4498-8c84-db616baae1b6&l=7SS836V

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LIABILITY FOR SMLLC MEMBER FOR WITHHOLDING ON EMPLOYEES

About 75% of all LLCs are single-member LLCs whose members are individuals.  The case cited below holds that these individuals, as such, can be personally liable for their single-member LLCs’ failure to withhold on employee wages.

HEBER E. COSTELLO, LLC, SCOTT D. COSTELLO, SINGLE MEMBER,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
UNITED STATES TAX COURT
Filed September 29, 2016

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PROPOSED NEW IRC SECTION 2704 REGS

The proposed new Treasury regulations under IRC Section 2704 are important not only for estate planners but also for LLC lawyers concerned about asset valuation issues.  See new blog post under the following link:

http://www.lexology.com/library/detail.aspx?g=e040eb25-8473-4330-aefe-3d411736a05c&l=7S4SLE8

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PARTNERSHIP AUDIT RULES

Every operating agreement for a multi-member LLC taxable as a partnership should contain comprehensive partnership audit provisions under TEFRA and under the Bipartisan Budget Act of 2015.  Once reason that, as of January 1, 2018, BBA will replace TEFRA for most such LLCs is the unending tax litigation that TEFRA has inspired over the past 34 years.  A very recent example of this litigation is the case discussed under the link below.

Here’s the link: http://www.taxnotes.com/tax-notes-today/litigation-and-appeals/tefra-didnt-preclude-court-considering-partners-defense/2016/09/07/18588966

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