Can Limited Partners be Subject to Self-Employment Tax?

Investment funds are often structured as limited partnerships. These partnerships allow professional managers to pool investor funds while maintaining operational flexibility. These structures typically have a general partner (“GP”) who manages day-to-day operations. Limited partners (“LP”) provide the capital and earn passive returns. The active manager and passive investor roles have different tax implications. Self-employment……

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Real Estsate Construction Delays Kill Tax Deductions

Real estate investors regularly pursue new ventures that require substantial upfront investments before generating any revenue. A successful investor might purchase land for a luxury resort, spend hundreds of thousands on architectural plans and permits, and begin construction on facilities designed to serve paying customers. These early expenditures represent legitimate business development costs, incurred with……

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What Makes a Tax Debt “Legally Enforceable” for Passport Certification?

The IRS has a number of tools it can use to collect unpaid taxes. This includes liens and levies, offsetting refunds, and, since 2015, requesting that the State Department deny or revoke a taxpayer’s passport. But what happens when a tax debt is old and seemingly beyond the collection statute of limitations? Can the IRS……

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Income Tax Due for Business Use of Employee Tax Withholding

Business owners facing cash flow challenges sometimes look to available funds to keep operations running. When those funds include employee tax withholdings that should be remitted to the IRS, the IRS has a number of tools at its disposal to recover the withheld but un-remitted funds. For the most part this includes pursuing the business……

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Does the IRS Have Authority to Certify ACA Employer Penalties?

The IRS has been sending notices to businesses about Affordable Care Act (“ACA”) penalties. The penalties are often very large in amount and, in many cases, come as a complete suprise to the business owners. This is particularly true for growing businesses that are right around the cutoff for the headcount requirements. Businesses with 50……

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Can Judge-Made Doctrine Override Tax Deductions Allowed by Congress?

The tax code provides specific rules for when taxpayers can claim deductions for losses. These are rules enacted by Congress. There are other so-called “judicial doctrines” that allow the courts to override the rules set by Congress. There are several of these that frequently come up in tax disputes, such as the economic substance doctrine……

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