By Lauren Mack On July 22, 2015, the IRS issued a notice of proposed rulemaking regarding the classification of management fee waivers in exchange for partnership interests as disguised payment for services. Under the proposed regulations, allocations of income to partners that provide services to the partnership that lack “significant entrepreneurial risk” will be recharacterized by the IRS as payments for services. Background In 1984, …
FACTA’s Impact on Offshore and Domestic Hedge Funds
The Foreign Account Tax Compliance Act (“FACTA”) was enacted by Congress in 2010 as part of the HIRE Act and will become effective January 1, 2013. The legislation is a new cornerstone in the U.S. government’s long standing campaign to crack down on Americans who hide assets in overseas accounts to avoid U.S. income taxes. FACTA applies to virtually all non-U.S. funds making investments in …