Leveraged Partnership Transactions and Tax Opinions Since Canal Corp.

Structuring Transactions and Tax Advisor Engagements to Withstand IRS Scrutiny and Avoid Penalties

Recording of a 110-minute premium CLE/CPE webinar with Q&A

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Conducted on Wednesday, June 22, 2011

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Course Materials

This teleconference will provide tax law advisors an analysis of the Canal Corp. decision, among others, on leveraged partnership transactions, discuss its troubling impact on tax opinion practice, and outline strategies for structuring partnership transactions and tax advisor engagements to withstand IRS scrutiny.

Description

Canal Corp. v. Commissioner handed a victory to the IRS in its challenge of a leveraged partnership distribution that the court concluded was really a disguised sale.

One of the keys to the decision was a loan guaranty that the court determined had only a remote possibility of the guarantor actually being liable to the other party. With no economic risk of loss, the grantor could not be allocated any part of the debt incurred by the LLC.

Most troubling for practitioners was the imposition of $36 million in accuracy-related penalties, despite the taxpayer’s reliance on its tax advisor’s opinion. The court's criticism of the advisor’s engagement fee will require advisors to reevaluate fee structures for potential conflicts of interest.

Listen as our authoritative panel of tax attorneys discusses the impact of Canal Corp. and other recent case law on leveraged partnership agreements and how to structure agreements to avoid a determination of a disguised sale. The panel will examine the impact of the case on tax opinion practice and how practitioners should reevaluate their engagement practices.

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Outline

  1. Structuring leveraged partnership transactions
  2. Structuring loan guarantees and indemnities
  3. Impact on tax opinion practice

Benefits

The panel will review these and other key questions:

  • Will the Canal Corp. ruling significantly limit leveraged partnership transactions?
  • How can counsel structure these transactions to withstand IRS scrutiny?
  • Under what circumstances may a fixed fee or contingent fee arrangement render a tax opinion unreliable?
  • When, if at all, should courts defer to the opinion of a reputable tax advisor in deciding whether to assess penalties against the taxpayer?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Jonathan M. Prokup
Jonathan M. Prokup
Shareholder
Chamberlain Hrdlicka

His practice encompasses a broad array of tax matters, from structuring complex financial transactions to representing...  |  Read More

Robert Heller
Robert Heller
Partner
Covington & Burling

His practice focuses on tax aspects of corporate and partnership transactions including mergers and acquisitions,...  |  Read More

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