July 23, 2006
Ribstein Posts 2006 Cumulative Supplement To Unincorporated Business Entities Treatise
Over on Ideoblog, Professor Larry Ribstein of the University of Illinois College of Law has posted the 2006 Cumulative Supplement to Ribstein, Unincorporated Business Entities (3d ed. 2004). As Professor Ribstein notes, the supplement contains some interesting cases on partnerships and limited liability companies.
I have already found Professor Ribstein's supplement helpful in working on a paper, The Evolution of a Body of Law: The Limited Liability Company. In the paper, I examine how courts have created limited liability company law from both partnership and corporate law. I tentatively conclude that courts apply either partnership or corporate law indiscriminately and unsystematically without regard for legislative intent and the function and jurisdiction of the business entity that parties choose.
July 15, 2006
NYSBA Report To IRS On I.R.C. Section 956 And Partnerships
The New York State Bar Association Tax Section has submitted a letter and report to the IRS responding to the IRS’s previous requests for comments concerning Section 956 of the Internal Revenue Code and its application to partnership transactions. The IRS had asked for comments particularly with respect to “a loan by a controlled foreign corporation (“CFC”) to a foreign partnership in which one or more partners are shareholders of the CFC.” In a letter from Chair Kimberly S. Blanchard, Blanchard refers to the response in New York State Bar Association Tax Section Report No. 1114, stating:
[W]e believe that a loan by a CFC to a related foreign partnership should generally not be treated as an investment in U.S. property for Section 956 purposes (irrespective of whether the partners in the foreign partnership are U.S. or foreign persons) if the loan proceeds are not invested in U.S. property or otherwise distributed to any U.S. partners in the partnership. The report recommends, however, that an anti-abuse rule be enacted under which a loan by a CFC to a foreign partnership would be treated as an investment in U.S. property for Section 956 purposes if (i) the loan proceeds are loaned or distributed to a U.S. partner of the foreign partnership that is a “U.S. shareholder” of the CFC and (ii) one of the principal purposes for creating, organizing or funding the foreign partnership is to avoid the application of Section 956 with respect to the CFC.
To read the letter and report, go here.
Hat Tip: TaxProf Blog