Temporary and proposed regulations issued May 3, 2016, reaffirm Treasury’s position that an individual cannot be both an employee and a partner of the same tax partnership, and end the ability of tax planners to use a disregarded entity in conjunction with a tax partnership to change an individual’s self-employment…
In a recent ruling, the IRS confronted a partnership serving as a management company for investment partnerships and funds. Management fees were its sole source of income. The management company paid reasonable compensation subject to employment or self-employment taxes to its owner-managers. Following a planning technique available to S corporations,…