Heads the IRS Wins, Tails the Taxpayer Loses: Analyzing the IRS’s Inconsistent Positions on the Meaning of Limited Partner.



Business has evolved more quickly than tax law, and this has led the IRS to take conflicting positions about the meaning of “limited partner.” The IRS is characterizing this term broadly or narrowly in different contexts in furtherance of its goal of always maximizing tax revenue. When it comes to the passive activity loss rules in Section 469, the IRS argues that “limited partner” must be loosely defined. However, when a case involves whether certain amounts from partnerships should be subject to self-employment taxes, the IRS argues for a tight definition of “limited partner” under Section 1402. This article, which is the third in a series, compares and contrasts the positions taken by the IRS in two important areas.

Read the full article here.

About Hale E. Sheppard
HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

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