Service

Tax

While tax simplification and fairness are concepts with universal appeal, the undeniable fact is that our tax system has grown increasingly complex and probably will continue to do so.

It remains the case that similarly situated taxpayers may face vastly different tax liabilities depending upon their ability to fit within available exceptions, exemptions and safe harbors provided by a complicated and constantly changing structure of statutory, regulatory, and judicial guidelines.

We counsel clients regarding:

Acquisitions and dispositions

  • Limiting tax on acquisitions or dispositions (including state and local and transfer taxes)
  • Structuring tax-free reorganizations
  • Using pass-through entities to acquire businesses on a tax-deferred basis
  • Enhancing future deductions
  • Preserving existing tax benefits

Restructuring of entities and groups of related entities

  • Tax-efficient workouts
  • Achieving administrative efficiencies
  • Avoiding triggering deferred gain
  • Preserving deductions and losses

Individual tax matters

  • Choice of business entity
  • Planning for tax efficiency, including estate tax efficiency

Advocacy

  • Exploring resolution at the lowest possible administrative level
  • Presenting compelling written and oral arguments
  • Rigorously prosecuting or defending tax matters in Tax Court, U.S. District Court or Commonwealth Court

Tax-exempt organizations

  • Obtaining income tax, sales tax and real estate tax exemption
  • Obtaining and maintaining public charity status
  • Avoiding substantial unrelated activity
  • Avoiding private inurement and impermissible private benefit
  • Limiting unrelated business income tax
  • Avoiding self-dealing, excess benefit and impermissible or unwise conflicts of interest transactions
  • Meeting the charitable expenditures requirement

To assist companies in their resolution of tax problems, we deal regularly with the Internal Revenue Service and the Pennsylvania and Philadelphia Departments of Revenue. Through our association with the State Tax Committee of the United States Law Firm Group, we are able to assist clients with multistate tax issues in a comprehensive and efficient manner.

Our Tax Practice shares a strong foundation of technical tax knowledge and a broad understanding of current business practices. To that end, we are able to help our clients achieve their business and personal goals and objectives at the least possible tax cost consistent with the applicable law.

Partners in the Tax Practice frequently speak and write on tax issues. In the past year, our tax attorneys have participated in numerous continuing education programs sponsored by industry groups and the Philadelphia Bar Association.

Montgomery McCracken has a well-established reputation as a firm with the resources and talent to provide clients with outstanding service in all areas of federal, state, local, and international taxation.


Experience

Representative Matters
  • Structuring real estate partnership so that debt financing does not produce unrelated business taxable income (“UBTI”) for the exempt partners and structuring investment funds for tax exempt investors using UBTI blockers;
  • Obtaining a substantial Pennsylvania income tax refund for a New York City based real estate investor by persuading the State Board of Finance that our client was entitled to a credit for taxes paid to New York on dividends distributed by his New York “S” Corporation;
  • Structuring the conversion of a substantial Delaware-based investment holding company from a “C” Corporation to an “S” Corporation and minimizing taxes on the conversion by taking advantage of certain highly technical provisions of new legislation creating “Electing Small Business Trusts”; and
  • Creating the first national bank subsidiary for a 501(c)(3) nonprofit corporation.
Representative Clients
  • Large, regional business concerns
  • U.S. subsidiaries of foreign corporations
  • Major hospitals, universities and other nonprofits
  • Private foundations
  • High net-worth individuals
  • Mutual funds and hedge funds

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