Hedge Fund Alert quoted partner Jennifer Breen for an article on the implications of the US Tax Court’s November 28, 2023 decision in Soroban Capital Partners L.P. v. [IRS] Commissioner, wherein the court agreed with a request from the US Internal Revenue Service for a “functional analysis” of Soroban’s use of a long-held industry practice to claim a limited partnership exemption to making contributions to self-employment taxes.
“All the decision tells us is that we have to do a functional analysis to determine whether a partner is actually a limited partner for [Self-Employment Contributions Act] purposes,” Jennifer said. “As someone who practices in this area, I believe many firms operating in this industry have facts that demonstrate that their partners are in fact limited partners.”