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Tax Planning and Controversies

Running a profitable business requires successful tax planning and the right counsel at your side. Our tax planning team led by Dan Baucum is well versed in business purchases, sales, start-ups and split-ups as well as other tax issues that arise. And when tax disputes arise, our team fights hard to identify significant issues and develop strategies that lead to success.

Tax Planning

FBFK’s Tax Team offers comprehensive knowledge and in-depth experience as tax counsel in business purchases, sales, reorganizations, start-ups and split-ups. We can assist you with choosing the right business structure for your domestic and international businesses as well as with investments where taxes are an integral part of the transaction. Our attorneys have decades of experience in both government and private practice and are experts at tax planning related to LLCs, limited partnerships, S corporations, and other business entities including C corporations. Our team provides innovative tax solutions to your business and investment challenges in line with your goals. For closely held business owners, the FBFK team also seamlessly combines tax structuring with asset and estate preservation and planning.

Tax Controversies

FBFK’s Tax Team is by your side when facing high-stakes audits or tax appeals of an unfavorable audit. The FBFK team brings with them a thorough understanding of both IRS practice and federal tax issues that can arise during IRS audits and appeals. Our attorneys have significant IRS Chief Counsel experience representing clients in requesting IRS private letter rulings for complex federal tax issues and inadvertently terminated tax elections. Whether engaged at the beginning of a tax controversy, or called in after other attempts have failed, the FBFK team fights hard to identify significant issues and develop strategies to achieve the client’s objectives. They work to negotiate a resolution at the administrative level to avoid the additional cost and distraction that can accompany tax litigation. If litigation is inevitable, the FBFK team has the experience and know-how to position the matter for litigation and present the case to achieve the best result.

Practice Areas

The breadth of our capabilities and experience in business and transactional tax matters includes:

CORPORATE TAXATION

Tax free acquisitive reorganizations
Tax free dispositive reorganizations
Structured taxable acquisitions and divestitures, including Section 336(e) and Section 338 transactions
Tax free spin-offs, split-offs and split-ups
Corporate formations, joint ventures and liquidations
Financings and recapitalizations
Net operating loss limitations
Section 1202 transactions
S Corporation transactions and planning

EQUITY/INCENTIVE COMPENSATION PLANNING

Non-qualified stock option (NSO) plans
Restricted stock plans
Stock appreciation rights (SARs) and phantom equity plans
Carried interest and other “profit interest” or “promote” structures
Cash bonus plans
Section 409A compliance

PARTNERSHIP/LIMITED LIABILITY COMPANY TAXATION

Tax free formations, redemptions and liquidations
Tax-free “roll-over” transactions
Structured taxable interest and asset acquisitions and divestitures
Leveraged recapitalizations
Mergers and divisions
Disregarded entity transactions and planning
Negotiating and drafting Partnership and LLC agreements
Special allocations

OTHER BUSINESS TAX PLANNING

Choice of entity planning
Partnership agreements
Limited liability company (LLC) agreements
Buy-sell agreements
Installment sales
Personal goodwill dispositions
Private Letter Rulings
Bankruptcy and workout tax matters
Inbound and outbound transactions
Opportunity Zones

REAL ESTATE TAXATION

Tax free “like kind” exchange; or Section 1031 transactions
Capital gains planning
Carried interest or “promote” structures
Choice of entity planning
Acquisitions and divestitures

STATE LOCAL TAX

Income/franchise
Sales and use

TAX EXEMPT ORGANIZATIONS

Formation, qualification and operation of tax-exempt organizations under Section 501(c)
Prohibited transactions
State and local tax exemptions

Our Tax Planning and Controversies Team

Dan G. Baucum

Attorney / Shareholder
Tax Planning and Controversies

Carol Willis Butrus

Attorney / Shareholder
Estate Planning, Tax Planning and Controversies

Representative Tax Planning and Controversies Matters

IRS AUDIT DEFENSE

Successfully defended a family-owned manufacturing and real estate business based in Hawaii and Texas, negotiating and settling income tax issues raised during audit and avoiding potential gift tax assessments.

DEFENSE OF CHARITY’S BOARD MEMBER FROM UNPAID EMPLOYMENT TAXES

Defended volunteer charity board member from being held responsible for unpaid employment tax assessments stemming from Executive Director’s actions.

OFFSHORE TAX PLANNING

Provided taxpayer advice on tax reporting responsibilities and implementing a business reorganization plan to simplify U.S. tax reporting issues for an offshore business enterprise and evaluating strategies to reduce taxpayer’s current U.S. tax liabilities.

“EGG SHELL” AUDIT DEFENSE

Represented taxpayer in IRS audit involving allegations of failure to file accurate returns and report income.

FAMILY OWNED BUSINESS SUCCESSION PLANNING

Represented multi-generational family with strategic reorganization of operating business and real estate investments allowing younger family members involved in the business to assume operating roles in specific businesses with oversight working toward the goal of eventually taking operational control, while other family members not actively involved in the family business were guaranteed a financial stake in the business and investments.

PURCHASE OR SALE OF CLOSELY HELD BUSINESSES

Represented buyers or sellers in the sale of assets or equity in closely held business, including negotiating the letter of intent, negotiating representations and warranties, drafting the purchase or sales agreement, addressing securitization issues, transferring the assets or equity, and closing the deal.

FORMING AND OPERATING CLOSELY HELD BUSINESSES

Assisted clients in choosing the correct business entity for their start up, drafted and filed entity formation documents, and documented governance choices related to critical business choices and operations.

REAL ESTATE SPLIT UP INVOLVING LLCs AND S CORPs

Planned and implemented the reorganization of multiple entities to facilitate the tax favored split up of real estate businesses to multiple owners.

PERSONAL GOODWILL IN THE SALE OF C CORPORATION

C corporation sale structured so that a percentage of the sales proceeds paid directly to shareholder for personal goodwill avoiding corporate level double tax.

CONVERSION OF S CORPORATION TO LLC IN PARTIAL SALE

Planned and implemented tax free conversion of operating S corporation business into a LLC to accommodate buyer of 50% interest in the business who required that the business be operated as an LLC.

TAX FREE RETENTION OF PARTNER’S INTEREST IN REAL PROPERTY SOLD

Structured the sale of real property by a partnership to allow one partner to retain an ownership interest in the property through a tax free contribution in exchange for a membership interest in the LLC purchaser while other partners received cash in a taxable sale.

BANK HOLDING COMPANY TAX STRUCTURING

Provided tax structuring advice to a Texas bank holding company in its merger with and into an out-of-state bank holding company. Consideration for the transaction was a combination of cash and stock.

PRIVATE INVESTMENT FUND TAX PLANNING

Provided tax advice in the recapitalization of a limited partnership formed to acquire royalty and mineral interests. Arranged additional capital from bank loans and soliciting existing members for additional capital contributions to fund the repurchase of limited partnership interests from partners wishing to liquidate their investment.

INVESTMENT FUND TAX STRUCTURE

Provided tax advice to a newly created pooled investment fund focused on the acquisition of interests in real estate operating companies involved in the development of student housing, senior assisted living, modular housing neighborhoods and self-storage facilities.

PRIVATE REAL ESTATE FUND TAX STRUCTURE

Provided tax advice in connection with the creation of an investment fund to acquire interests in real properties across North America. The fund sought investments from foreign nationals wishing to invest in U.S. and Canadian real estate.

REAL ESTATE LIKE-KIND EXCHANGE

Provided tax advice to real estate investor in Texas involving unwinding several real estate partnerships with unrelated investor partners thorough the tax free like-kind exchange of the partnerships’ investment properties for previously identified replacement investment properties using a reverse deferred “parking” exchange structure to acquire replacement realty prior to the sale of the relinquished property.

PRIVATE EQUITY INVESTOR TAX ADVICE

Provided tax advice to equity investors in negotiations with the Fund Sponsor regarding proposed revisions of the partnership agreement affecting the tax treatment of the partners.

INSURANCE COMPANY AUDIT

Provided IRS practice advice and counsel to an international insurance conglomerate with a significant U.S. presence experiencing a problemed U.S. federal income tax audit In New York arising out of a large tax refund claim filed by its U.S. subsidiary. Assisted in responding appropriately to a combative situation involving an IRS Large Business and International audit team requests for information and unsubstantiated allegations.

IRS APPEALS

Prepared and filed written arguments with IRS Appeals protesting an auditor’s denial of a charitable deduction by taxpayer who gifted stock in a closely held business to charity. IRS Appeals reversed the auditor’s denial of a charitable deduction in favor of the taxpayer without a hearing solely based upon the written protest filed on behalf of the taxpayer.