February 2011 - The Tax Adviser

The authors discuss when shareholders should consider a conversion from a C corporation to an LLC. Possible disadvantages are explored, and tax costs and benefits are assessed.

The Third Circuit Court of Appeals may have opened the door to a new approach that could result in significantly increased criminal penalties for taxpayers who file false returns. Taxpayers who mail or e-file their tax returns and knowingly understate their taxable income thereon may be exposing themselves to the same money laundering charges levied against drug dealers and financiers of international terrorism.

This article reviews and analyzes recent rulings and decisions involving partnerships. The discussion covers developments in partnership formation, debt and income allocations, distributions, passive activity losses, and basis adjustments during the period November 1, 2009–October 31, 2010.