The U.S. Tax Court has held in ES NPA Holding, T.C. Memo 2023–55, that an interest in a partnership granted for services was a profits interest that was not taxable to the taxpayer under Revenue Procedure 93–27. The case helps to define what a partnership profits interest is, as compared…

Tax Notes Federal and Tax Notes Federal Today Federal: Compendium of Letters to the Editor This is a collection of links to letters to the editor of Tax Notes Federal that I have written over the past decade and a half. They cover all sorts of issues involving many different…

(For a parallel analysis of these issues in my latest letter to the editor of Tax Notes Federal, see my letter to the editor, here). I write today about two items of interest. The first item is an ILM (the “Section 741 ILM”) that holds that section 1221 can override…

I was granted permission from Tax Analysts to republish a compilation of my articles and letters to the editor that I have written in Tax Notes Federal on partnership tax law reform. Here is the link to the SSRN publication of the combined article, along with a link to my author page on SSRN. The download is free. But for this republication, my articles and letters on this subject are behind the Tax Analysts’ paywall.

In connection with the latest update to the IRS-Treasury Priority Guidance Plan, I wanted to make the following points generally about the concept and process of the IRS-Treasury priority guidance plan (business plan). 1. The business plan is not required by statute, regulation, or other authoritative public guidance. (For a…

In Rawat (Rawat v. Commissioner, T.C. Memo 2023–14, Tax Court Judge David Gustafson, who also authored the opinion in Grecian Magnesite (Grecian Magnesite Mining, Industrial & Shipping Co. SA v. Commissioner, 926 F. 3d 819(D.C. Cir. 2019), aff’g 149 T.C. 63 (2017), held that a sale of a 30 percent…

Updated Feb. 8, 2023 Recent news reports have disclosed the accounting firm Ernst & Young’s (EY) purported plan to separate its consulting business from its global audit practice. (Mark Maurer and Jean Eaglesham, “Accounting Firm EY Considers Split of Audit, Advisory Business,” The Wall Street Journal, May 26, 2022.) …

Updated Feb. 8, 2023 1. General Principle of Law The general principle of law underlying aggregate or entity treatment of a partnership is set forth in the 1954 Conference Report on Section 707: H.R. Conf. Rep. No. 2543, 83d Cong., 2d Sess. …

Taxpayers are straying outside the lines when it comes to so-called UP structures, whose name derives from the umbrella partnership real estate investment trust (UpReit), but can also involve C corporations (Up-Cs) and publicly traded partnerships (Up-PTPs). These structures have arguably been allowed to prosper and grow because of the…