Senator Thom Tillis introduced a bill (called the “Tackling Predatory Litigation Funding Act”) that would impose additional significant taxes on litigation funding investments. Rep. Kevin Hern (R-OH) introduced a similar bill in the House of Representatives. The bill would apply to taxable years beginning after December 31, 2025, which could include
Senators Crapo and Wyden Release Draft Bipartisan Taxpayer Rights Legislation
I. Introduction
On January 30, 2025, Mike Crapo (R-ID), the Chairman of the Senate Finance Committee, and Senator Ron Wyden (D-OR), the Ranking Member of the Senate Finance Committee released a discussion draft of the “Taxpayer Assistance and Service Act” (the “bill”), a bipartisan taxpayer rights bill intended
Tax Proposals Potentially Being Considered by the U.S. House Budget Committee in Reconciliation
On January 17, 2025, multiple news outlets and other sources reported the existence of a memorandum circulated by the U.S. House of Representatives Budget Committee to the House Republican Caucus (the “Memorandum”) containing an extensive list of budget proposals that may be considered in connection with the new Congress’s widely expected budget reconciliation legislation. The Memorandum, which is publicly available via link from a number of news outlets,[1] contains approximately fifty pages of proposals covering a wide range of policy areas and enumerating scores of potential specific legislative proposals (along with estimated budget effects in most cases), some of which are seemingly mutually exclusive. Included in the memo are a number of tax-related proposals, including tariff proposals, which are briefly set forth below.
Tax Court Reaffirmed Soroban’s Holding that Active Limited Partners of State Law Limited Partnerships May Be Subject to Self-Employment Tax
On December 23, 2024, in Denham Capital Management LP v. Commissioner (T.C. Memo. 2024-114), the Tax Court reaffirmed its earlier ruling in Soroban Capital Partners LP v. Commissioner (161 T.C. No. 12.) that active limited partners of a state law limited partnership are not entitled to the “limited partner exception”
Post Election – Expect Tax Legislation
I. Introduction
With clear Republican victories in the White House and the Senate, and a very slim majority for either side in the House of Representatives, we can expect tax legislation in the coming year. It is expected that the President elect will likely seek to enact his economic agenda
Final Regulations on Domestically Controlled REITs
- Introduction
On April 24, 2024, the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) issued final regulations[1] on the definition of “domestically controlled” real estate investment trusts (“REITs”) (the “Final Regulations”). The Final Regulations retain
Tax Relief for American Families and Workers Act of 2024
On January 17, 2024, Senate Finance Committee Chairman Ron Wyden (D-Ore.) and House Ways and Means Committee Chairman Jason Smith (R-Mo.) released a bill, the “Tax Relief for American Families and Workers Act of 2024” (“TRAFA” or the “bill”). All of the provisions in the bill are taxpayer favorable, except
CTA – The Large Operating Company Exemption – Not Everybody Can Be A “Big BOI”
In 2021, the Corporate Transparency Act was enacted into U.S. federal law as part of a multinational effort to rein in the use of entities to mask illegal activity, including proposed rules (effective January 1, 2024) requiring certain types of entities to file a report identifying the entity’s beneficial owners
Tax Court Holds That Active Limited Partners of State Law Limited Partnerships May Be Subject to Self-Employment Tax
Introduction
Section 1402(a)(13) of the Internal Revenue Code provides that the distributive share of “limited partners, as such” from a partnership is not subject to self-employment tax.[1] Managers of private equity and hedge funds are routinely structured as limited partnerships to exclude management and incentive fees from self-employment
Senate Finance Committee Requests Public Comments on Digital Asset Taxation
On July 11, 2023, the Senate Finance Committee released an open letter to the Digital Asset Community asking a variety of questions in connection with possible future legislation. Public comments must be emailed to the Senate Finance Committee staff at responses@finance.senate.gov by September 8, 2023. The questions are related to the following nine general areas.
- Marking-to-market for traders and dealers;
- Trading safe harbor;
- Treatment of loans of digital assets;
- Wash sales;
- Constructive sales;
- Timing and source of income earned from staking and mining;
- Nonfunctional currency;
- FATCA and FBAR reporting; and
- Valuation and substantiation.
The balance of this blog describes each area, lists each question, and discusses certain of them.