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Partnerships › Tax Liability › Self-Employment Tax

Proskauer - Tax Talks

The Tax Court in Soroban Holds that Limited Partners Were Too Active To Be Treated As “Limited Partners” and are Subject to...

Proskauer - Tax Talks on

On May 28, 2025, in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban II”), the Tax Court held the active role of limited partners in a fund manager caused them to fail to qualify as “limited partners”...more

Stinson LLP

U.S. Tax Court Issues Ruling on Self-Employment Tax Exception for Limited Partners

Stinson LLP on

On Wednesday, May 28, the U.S. Tax Court ruled in Soroban Capital Partners LP v. Commissioner that a "functional analysis" test applies when determining whether a limited partner who contributes services to a partnership may...more

Morrison & Foerster LLP

Tax Court’s Decision in Soroban—Potential SECA Tax Implications for Management Fee Income

Morrison & Foerster LLP on

On May 28, 2025, the U.S. Tax Court issued its decision in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) (“Soroban”), holding that “limited partners” of a management company organized as a Delaware limited...more

Rivkin Radler LLP

The Limited Partner Exclusion From Self-Employment Tax – But Who Is A Limited Partner?

Rivkin Radler LLP on

An Agency Under Siege - The mission statement of the IRS reminds taxpayers that it is their responsibility to understand and meet their tax obligations, while it is the role of the IRS to “enforce the [tax] law with...more

Husch Blackwell LLP

U.S. Tax Court Rules That Limited Partners of an Investment Manager Are Subject to Self-Employment Tax

Husch Blackwell LLP on

On May 28, 2025, the United States Tax Court held that the limited partners of a limited partnership providing investment management services to various investment funds were not limited partners within the meaning of...more

Cooley LLP

Soroban: An Update After US Tax Court Ruling

Cooley LLP on

On May 28, 2025, the US Tax Court ruled that investment manager limited partners in Soroban Capital Partners were active limited partners and, as such, were ineligible for the limited partner exception to self-employment...more

White & Case LLP

The IRS Continues Winning Self-Employment Contributions Act (SECA) Tax Against Limited Partners in Private Equity and Hedge Funds

White & Case LLP on

Recently, the Internal Revenue Service ("IRS") has successfully asserted that limited partners in private equity and hedge funds that are organized as limited partnerships were subject to tax under the Self-Employment...more

WilmerHale

Court Decision on Limited Partner Exception to Self-Employment Tax

WilmerHale on

On May 28th, the U.S. Tax Court issued a decision in Soroban Capital Partners LP v. Commissioner (T.C. Memo 2025-52) holding that all of the income allocable to the partnership’s limited partners (not just the amount...more

Cadwalader, Wickersham & Taft LLP

Another Appeal Adds Fuel to the Limited Partner SECA Tax Debate

Cadwalader, Wickersham & Taft LLP on

Denham Capital Management LP (“Denham”), a private equity firm, has appealed the recent U.S. Tax Court decision that declined to revisit its interpretation of the “limited partner exception” under the Self-Employment...more

Ballard Spahr LLP

Partners Must Pay Self-Employment Tax on Partnership Income—Even From a 'Disregarded Entity'

Ballard Spahr LLP on

The IRS has published Final Regulations finalizing its prior guidance that partners in a partnership must pay self-employment tax on their partnership income, even if they work for an entity owned entirely by the partnership...more

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