Chaim Stern, partner in Alston & Bird’s Federal & International Tax Group, was quoted in a Law360 article, “2nd Circ. Forges Own Path in Limited Partner Tax Ruling” (subscription required), examining how differing federal appeals court tests could affect businesses seeking the self-employment tax exclusion for limited partners.
Chaim noted the courts applied distinct standards when assessing a partner’s role in managing a business, creating uncertainty that may require guidance from the Internal Revenue Service, U.S. Supreme Court review, or congressional action. He added that Treasury Department regulations may be more likely than a statutory fix.