Mergers, Acquisitions, Divestitures

Tax matters (among others, subject to IRS and state regulation)

Tax ramifications must be contemplated when structuring a business, in acquisitions, mergers, divestitures, and obviously during audits and disputes. Matters concerning income tax, sales tax, real estate tax, capital gains tax, to name a few, are common place. Without careful tax planning (and sometimes even after tax planning) the IRS or a state department of revenue may claim a business failed to pay the actual taxes owed based on a variety of reasons, despite good faith efforts. For example, the IRS may allege that a company or its owners reported losses based on a claimed basis which it believes has not been substantiated. Rules governing basis vary on a variety of factors such as the type of entity your own. In other situations, a state department of revenue may claim a business underpaid sales taxes despite always having used an accountant for its reporting.

Such cases can even give way to potential claims against an accountant. In some cases, a department of revenue can claim that business owners failed to report proper taxes based on the idea that a ‘common enterprise’ exists among a number of their separate business entities. Therefore, both the planning and, if necessary, the audit stage of tax matters require detailed analysis, precision and strategy.

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