Michael Cohen | TaxConnections

03 May 2024

TaxConnections Spotlight Interview Part 2: Chuck Levun And Michael Cohen On Partnership Tax Planning Challenges, And Surprising Cases And Mistakes They Have Seen

ax Connections Spotlight Interview Part 2: Chuck Levun And Michael Cohen On Partnership Tax Planning Challenges, And Surprising Cases And Mistakes They Have Seen

For more than thirty-seven years, Charles R. Levun and Michael J. Cohen have been presenting the preeminent seminars on flow-through taxation. The two flagship Tax Forum programs are Fundamentals of Flow-Through® and Tax Planning Forum®. Tax Forum is expanding its programs to include self-study (on-demand) training, as well as working on an additional course, which they will share with us soon.

Please read through Part 2 of this special interview, featuring Chuck Levun and Michael Cohen. Part 1 is focused on Tax Forum, its flow-through tax planning training programs, and the importance of education for CPAs, attorneys and other tax planning professionals.

To get a sense of how the Tax Forum programs are unique in the partnership, LLC and S Corporation tax training space, please register for Tax Forum’s complimentary webinar:

Avoiding Costly Mistakes: Four Essential Tax Concepts for the Non-Tax Business Attorney or CPA taking place on Thursday, May 16th at Noon CDT

Kat Jennings’ Question: Let’s jump right in …Do you see an increase in controversy in partnership taxation? Why or why not?

Michael Cohen’s Answer: For the most part, not yet. However, with the new budget for the IRS and the commitment to go after “large” partnerships, I would think that controversy will increase. However, for this commitment to be successful in shutting down “abusive” transactions, the partnership knowledge base of the IRS auditors will need to be expanded. I will note that virtually every year we have at least a half dozen IRS professionals attend either our Forum or Fundamentals courses.

Kat Jennings’ Question: What is the biggest challenge for partnerships going forward?

Chuck Levun’s Answer: Staying on top of developments is a biggie. There have been proposals floating around from Senator Wyden and others that would make substantive changes to some of the basic partnership principles. These changes are designed to hit perceived abuses of the partnership rules by large partnerships. Unfortunately, if enacted, they also would complicate life for the smaller partnerships, which are by far a large number of business entities and growing. Moreover, there are always new structuring techniques, new thought processes, etc. that are constantly being developed. Partnerships are such a dynamic area, given, as I said before, that partners have a tremendous amount of flexibility in structuring their transactions. It’s not like the S corporation arena where everything has to be shared on a pro rata basis, there can be only one class of stock, etc.

Kat Jennings’ Question: Tell us about any cases in partnership taxation that really surprised you.

Written by Michael Cohen | Posted in Complimentary Webinar • Partnership • Passthrough Entities • S Corp Training

24 Apr 2024

Spotlight Interview: Chuck Levun and Michael Cohen On Educating CPAs, Attorneys and Other Tax Planning Professionals, Part 1

Spotlight Interview Part 1:

Chuck Levun and Michael Cohen on Educating CPAs, Attorneys and Other Tax Planning Professionals – As Well as Their Seasoned Advice for Tax Professionals New and Old

For more than thirty-seven years, Charles R. Levun and Michael J. Cohen (the founders of Tax Forum) have been creating and presenting the preeminent seminars on flow-through taxation. The two flagship Tax Forum programs are Fundamentals of Flow-Through® and Tax Planning Forum®. In addition, Tax Forum is expanding its programs to include self-study (on-demand) training, as well as working on an additional course, which they will share with us soon.

Please read Part 1 of this special interview for Chuck’s and Michael’s descriptions of these programs and education in the flow-through taxation arena. Part 2 will focus on significant tax planning challenges that partnerships face … and the biggest mistakes Chuck and Michael have seen, that they will help you avoid.

Speaking of avoiding potential big mistakes, take a moment to register for Tax Forum’s complimentary webinar:

Avoiding Costly Mistakes: Four Essential Tax Concepts for the Non-Tax Business Attorney or CPA taking place on Thursday, May 16th at Noon CDT

You will appreciate what you will learn by spending time with these leading tax experts/educators.

Kat Jennings’ Question:

First of all, tell us about your favorite career accomplishments?

Chuck Levun’s Answer:

I’ve had many. However, perhaps my favorite is to have developed the Tax Planning Forum and the Fundamentals of Flow-Through tax programs with my partner, Michael Cohen. We’re in our 38^th year of presenting these partnership, LLC and S corporation flow-through programs for tax professionals, and I feel that we have assisted several decades of tax professionals to be better educated and better able to assist their clients in closely held business matters.

Michael and I have also been very fortunate to have served as the editors-in-chief of the Journal of Passthrough Entities during its entire 20-year publication, and to have written 400 monthly Partner’s Perspective columns for the Wolters Kluwer (CCH) Partnership Tax Planning and Practice Guide. These vehicles enabled us to learn and assist others to learn at the same time.

But maybe, the most rewarding aspect of all this is the opportunity we have had to not only educate other professionals but also to assist them in growing their practices and retaining clients who are in need of creative business structuring. I also have been involved in mentoring other professionals, both officially and unofficially. More recently, I have been involved with both the Chicago Bar Association and the ABA Tax Section in their mentoring and diversity programs. These mentoring relationships have turned into friendships, and it’s been amazing watching young professionals blossom and grow.

Kat Jennings’ Question:

What is Tax Forum and what is its origin?

Written by Michael Cohen | Posted in Partnership Training • TaxConnections

23 Apr 2024

Avoiding Costly Mistakes: Four Essential Tax Concepts For Attorneys And CPAs (Complimentary 1-Hour Webinar Thursday, May 16th)

Avoiding Costly Mistakes: Four Essential Tax Concepts For Attorneys And CPAs (Complimentary 1-Hour Webinar Thursday, May 16th)

Register For Complimentary Webinar

Even smaller matters might have big traps and significant tax implications – leading to unexpected tax liabilities for your clients and potential malpractice claims for the professionals.

During this one-hour webinar, the Tax Forum team of Chuck Levun, Michael Cohen, and Scott Miller will provide a top-level look at …

Converting an existing S corporation to an LLC on a tax-free basis to obtain “charging order” protection
Simple business structuring to circumvent the $10k deduction limitation for the portion of state and local income taxes attributable to partnership/LLC and S corporation income
How not to cause your client to be one of the estimated 500k+ LLCs that incorrectly thought it was going to be taxed as an S corporation but, because of certain language contained in its operating agreement, is not an S corporation
Personal goodwill and the C corporation business sale – identifying situations in which double tax can be avoided

Any one of these could make the difference between you being a hero or creating a significant problem for your clients.

This webinar is geared for attorneys and CPAs who handle matters (even on a limited basis) involving closely-held businesses and smaller mid-market companies.

Please bring your questions, as the presentation will include a live Q&A session.

About Tax Forum:

Tax Forum presents flow-through tax programs that are considered the preeminent training seminars for professionals who handle partnership, LLC and S corporation tax and business planning.

Written by Michael Cohen | Posted in Complimentary Webinar • TaxConnections

19 Dec 2023

Cryptocurrency: Tax Basics And Income Considerations

Cryptocurrency and other digital assets such as nonfungible tokens often feel like an unexplored universe, where the laws of nature haven’t yet been discovered. Where the system that is being developed, and the rules that will govern, have the potential to upend the current economic structure. As that monumental shift continues to grow, and current rules, such as existing tax law, are being applied to digital assets, certified public accountants, tax attorneys, and enrolled agents are acquiring the skills and experience necessary to assist cryptocurrency holders with their tax compliance requirements. Some advisors are even navigating the sparse but developing IRS rules and notices to provide planning advice and tax management strategies. While it is key to have knowledgeable advisors helping you manage your tax responsibility, it is also helpful for the cryptocurrency owners and investors themselves to have a basic understanding of the following ways in which their cryptocurrency transactions may generate a tax bill.

INCOME EVENTS:

The federal government currently considers cryptocurrency to be a form of property, rather than currency. As a result, certain transactions, such as making a payment using cryptocurrency or exchanging one type of cryptocurrency for another, might actually generate an income tax liability. Some potential income recognition events include the following:

Receiving cryptocurrency as payment for goods or services: A recipient is taxed on the value of the crypto that such recipient receives as payment for selling goods or performing services. The taxable amount is based on the value of the coin at the time it is received. Cryptocurrency values continue to fluctuate dramatically, so it’s possible that by the time the recipient’s tax payment is due, the coin has decreased in value to where it’s worth less than the tax that’s due on it. It is therefore important to set aside sufficient cash in US dollars to pay income tax on cryptocurrency that is received as payment for goods or services. In addition to being subject to income tax, the value of the coin received as payment may be subject to self-employment tax if the payment is connected to a trade or business.
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Written by Michael Cohen | Posted in Cryptocurrency

06 Oct 2023

FinCEN Beneficial Ownership Reporting Guidance

In late September, Treasury issued its Small Entity Compliance Guide through its Financial Crimes Enforcement Network, a document that is 50 pages in length and sets forth detailed guidance about the new FinCEN “beneficial ownership” reporting requirements. And on September 27^th, Treasury issued proposed regulations that delay required reporting for “reporting companies” that are formed on or after January 1, 2024, and before January 1, 2025, from 30 days after formation to 90 days after formation. A reporting company in existence prior to January 1, 2024, is not subject to the reporting requirements until the end of 2024. (Note that no reports will be accepted prior to January 1, 2024, and forms have yet to be published for purposes of reporting.)

There is a long list of “narrow” exceptions to the reporting requirement that generally relate to entities for which the government already has information as to beneficial ownership, such as a “securities reporting issuer,” an “insurance company,” a “broker or dealer in securities,” etc. So what is a reporting company? Generally, subject to the above exceptions, it is (1) a newly formed corporation, LLC or partnership created by filing a document with a secretary of state or other similar office, or (2)(i) an existing “small business” that employs 20 or fewer persons or has reported gross receipts or sales of $5,000,000 or less on its prior year’s federal income tax return, and is (ii) a corporation, LLC or partnership created by filing a document with a secretary of state or similar office. (There also are filing requirements for certain “foreign companies.”) Essentially, the reporting requirements entail disclosure of any person who exercises “substantial control” over a reporting company or who owns or controls at least 25% of the ownership interests of a reporting company.

Written by Michael Cohen | Posted in TaxConnections

19 Sep 2023

You Are Invited To Annual Partnership, LLC & S Corporation Tax Planning Forum

This premier seminar, the “Annual Partnership, LLC & S Corporation Tax Planning Forum,” or simply the “Forum,” is an intensive flow-through entity tax planning seminar, which incorporates recent developments from Congress, Treasury, the IRS, case law and the many issues raised throughout the year by our attendees into the hottest flow-through planning techniques. Presented entirely new for the 37th year, the Forum provides attendees with cutting-edge strategies to take advantage of tax planning and business planning opportunities. As the Forum deals with advanced techniques, it is best suited for tax professionals who have a good working knowledge of flow-through taxation.
Read a summary of anticipated topics to be covered at the 2023 Tax Planning Forum.

This program is presented in a transactional format, so the faculty members will utilize practical examples to illustrate the issues to be discussed. An analysis of recent legislation and the latest cases, regulations and rulings will be integrated into each session. Program content and timing are based upon the current status of the law and may be modified if warranted by new developments. (Some of the program may not be covered orally.)

Structuring Techniques for 2023 and Beyond – An In-Depth Look at Closely Held Business Planning

-Analyzing any new tax legislation and its impact on flow-through planning
-Soroban and other §1402(a)(13) SE tax developments
-When is a QIO triggered and the impact of Clark Raymond
-The “no step-up” holding in Rev. Rul. 2023-2 and planning alternatives when low-basis property is held by an irrevocable grantor trust
-Structuring to maximize the benefit of SALT workaround payments
-CCA 202309015 and the controversy as to when the sale of a partnership interest may not generate capital gain
-Sorenson and where we stand with Wandry valuation clauses
-ES NPA Holding and the unsuccessful IRS challenge to nontaxability of a profits interest issued in a tiered structure: What was the IRS thinking?
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Written by Michael Cohen | Posted in Partnership And S Corp Seminar • TaxConnections

23 Aug 2023

The Seventh Circuit Issued Its Long-Awaited Decision In Hoops, LP v. Commissioner: Held That A Partnership Could Not Deduct Deferred Compensation

The Seventh Circuit issued its long-awaited decision in Hoops, LP v. Commissioner, Docket No. 22-2012 (7th Cir. Aug. 10, 2023), in which it held that a partnership could not deduct deferred compensation due under a non-qualified deferred compensation plan to two NBA players when the deferred compensation liability was assumed by the purchaser of the Memphis Grizzlies NBA basketball team. This result means that the seller’s amount realized on the sale includes the amount of the liability assumption, yet the seller is not entitled to a deduction for the deferred compensation at the time of the sale. At this Fall’s Forum programs, we will be discussing this important case and how to structure a sale of a business where the buyer is assuming a non-qualified deferred compensation liability to avoid this whipsaw.

Registration Is In Full Swing For Our 2023 Tax Forum programs.

Capacity is limited for our in-person programs in Las Vegas and Orlando. Register Now before registrations and rooms fill up.

For those of your who prefer the comfort of your own home/office, please join us for any of the 14 virtual Forum and Fundamentals programs… the first of which kicks-off in two months on October 17th.

We look forward to seeing you… either in person or remotely… very soon!

In the meantime, we are always happy to address your questions related to any passthrough or closely held business matter that comes up in your practice. Please do not hesitate to call us at 800-286-4760 or email either of us.

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Written by Michael Cohen | Posted in Partnership Training • Pass-Through CPE