A Sea Change for Waive-rs? - Proposed Regulations Address Tax Treatment of Management Fee Waivers

August 14, 2015

The U.S. Treasury Department and the Internal Revenue Service have issued proposed regulations under Section 707(a)(2)(A) of the Internal Revenue Code of 1986, as amended, covering the circumstances when certain arrangements between partnerships and their partners will be re-characterized as disguised payments for services. The transactions covered by the Proposed Regulations include so-called “management fee waiver” arrangements commonly employed by private equity fund managers, although the Proposed Regulations address any transaction involving disguised payments for services under Section 707(a)(2)(A).

Read "A Sea Change for Waive-rs? - Proposed Regulations Address Tax Treatment of Management Fee Waivers."