In the recent case of Soroban Capital Partners LP v. Commissioner, 161 T.C. No. 12 (2023), the Tax Court held that the limited partner exception under section 1402(a)(13) does not apply to limited partners who the Court concluded were not limited partners “as such”; thus certain “limited partners” of a partnership may be subject to Self-Employed Contributions Act tax. The Tax Court in Soroban held that determining a “limited partner” for section 1402(a)(13) purposes requires a factual inquiry into the functions and roles carried out by such limited partner. If the factual inquiry shows that a limited partner is heavily involved in the partnership’s business and/or performed services for the partnership, such limited partner’s distributive share may be subject to Self-Employed Contributions Act tax.
Modernization of Canadian competition law and foreign investment review is well underway. Recent and further proposed legislative amendments will impact how dealmakers assess substantial and procedural regulatory risk for mergers. This update summarizes the recent legislative amendments to the Competition Act (Act) that came into effect on 15 December 2023 and proposed legislative amendments to the Act and Investment Canada Act. Dealmakers should be aware of these amendments as they plan mergers involving Canadian businesses in 2024.
Looking back at 2023, it is clear that the IRS has begun to increasingly assert anti-abuse doctrines, most notably the economic substance doctrine (ESD), in contentious tax controversies. Correspondingly, courts have had more opportunities to analyze and conceptualize the various anti-abuse doctrines. Courts in Liberty Global, GSS Holdings, and Chemoil have each offered unique and sometimes conflicting analyses in this regard. When reviewing these cases at a high level, a worrisome pattern emerges of courts conceiving of the traditional three anti-abuse doctrines as simply manifestations of a much broader substance over form tax principle. Further, despite the text of section 7701(o), courts are rejecting the idea that there exist certain transactions to which the ESD does not apply.
Almost two long years following the announcement of proposed rules revising the framework for regulating initial public offerings and business combinations of special purpose acquisition companies (SPACs), the US Securities and Exchange Commission (SEC) adopted in a three-two vote final rules on the topic. While much has changed in the SPAC market since the SEC’s proposed rules were announced – notably a cooling in the face of regulatory and economic headwinds – the final rules largely enact the SEC’s proposals from March 2022.
The Federal Trade Commission has just announced its annual adjustment to the notification thresholds that determine whether proposed transactions may trigger a filing obligation under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as amended. The corresponding adjustments to the HSR filing fee schedule also were included in the announcement. The adjusted notification thresholds and filing-fee schedule will apply to transactions that close on or after the effective date, which will be 30 days after publication in the Federal Register and no earlier than 26 February 2024.
The requirement that an inventor provides an enabling disclosure of their invention in exchange for patent protection lies at the heart of the patent system and is a central consideration for organizations across innovative sectors, especially those in life sciences and pharmaceuticals. This webinar delves into the dynamic landscape of patent enablement and plausibility standards, comparing and contrasting the nuanced approaches adopted in the US and Europe. In this session, we will discuss these recent developments, with a special focus on what they mean with respect to licensing, M&A and other transactions in the healthcare space and how you can anticipate issues as they arise in deals.
On 28 December 2023, the Treasury and the IRS issued a notice of proposed rulemaking regarding whether a debt instrument is worthless for US federal income tax purposes under Code section 166 (the “Proposed Regulations”). The Proposed Regulations would update the standards under Treas. Reg. § 1.166-2 used to determine when debt instruments held by regulated financial companies or members of a regulated financial group are conclusively presumed worthless.
Join us for our virtual New York 2023-2024 Employment Law Update on Tuesday, 13 February 2024 at 1 pm ET.
In this 60-minute session, our team will highlight what employers in New York and the surrounding areas need to know to effectively navigate 2024, with practical tips to handle the latest developments.
Earlier this year, Canada’s mandatory reporting rules were broadly expanded by lowering the thresholds to trigger a reporting obligation and increasing the information that must be reported to the Canada Revenue Agency As a result, taxpayers may be required to flag certain mergers and acquisitions transactions in real time if it could be reasonably concluded that one of the main purposes of entering into the transaction was to obtain a tax benefit.
In this In Focus video, our Canadian Tax and Corporate Transactions lawyers discuss how common contractual protection clauses could trigger an early reporting requirement and expose taxpayers to significant penalties if they fail to report.