Practice/Industry Group Overview
Cross Border Tax Planning
Tax lawyers at Edwards Wildman have extensive experience in designing tax-efficient structures for cross-border transactions. This work includes private equity funds buying and selling foreign portfolio companies, and multinational companies structuring foreign operations and financing transactions. Our tax experts regularly assist clients in structuring cross-border investments and acquisitions, including the formation of holding companies in many different jurisdictions, and the choice of entity for investment and operational entities in countries around the world. These tax lawyers are knowledgeable in all aspects of US income tax relevant to operations, investments, acquisitions and dispositions outside the US, including income tax and social security treaties, foreign withholding taxes on compensation, dividends, interest, rents and royalties and the application of the US anti-deferral tax regimes for “controlled foreign corporations” and “passive foreign investment companies.” We also advise non-US persons making investments and acquisitions in the US Inbound work includes representation of foreign institutional investors in US real estate funds and REITs. Our tax lawyers work closely with other Edwards Wildman lawyers with experience handling cross-border transactions and investments, including lawyers in our London office. In addition, we have more than 15 years of established relationships with independent, preeminent law firms in key global commercial centers in 37 countries through our founding membership in The World Law Group, a selective, international association of law firms.
- Assisted a private equity fund in structuring acquisition of US and Canadian assets of a major candy manufacturer to minimize US taxes on Canadian operations and Canadian taxes on sales of the operating assets.
- Assisted a public company in a tax-efficient sale of its stock to an Indian acquiring corporation.
- Assisted a private equity fund in structuring the acquisition of a US company with subsidiaries operating in Italy and the UK.
- Assisted US subsidiary of an Austrian parent corporation in the acquisition of Canadian corporation and subsidiary Canadian partnerships.
- Assisted a private equity fund in making a telecom investment in India through Cayman and Mauritius holding companies.
Edwards Wildman tax lawyers advise on a broad array of issues concerning tax-exempt organizations, including formation and application for recognition of tax-exempt status, planned giving, private foundations, charitable remainder trusts, excise taxes and intermediate sanctions, unrelated business income and joint ventures and other transactions with taxable organizations. The breadth of our experience reflects the many practice areas of the firm in which tax-exempt organizations play a central role: schools and colleges, venture capital and private equity where tax-exempt investors are dominant, affordable housing and the public finance practice on behalf of hospitals and universities.
Our tax department is a critical partner to the lawyers in our fund formation practice. Our in-depth involvement in the private equity and venture capital practice allow us to bring a wide range of experience to issues arising in designing Fund investment vehicles to meet a variety of needs. Our experience also allows us to advise and design general partner and management company structures to maximize returns for the professionals involved with each fund. Specifically, we regularly advise on management fee structures, tax-exempt issues including UBTI, offshore investor issues (ECI) and carried interest structures.
Our tax lawyers have extensive experience in advising debtors, creditors and other parties in bankruptcy proceedings and other types of insolvency workouts and restructurings. We help to structure the acquisition, disposition, restructuring and bankruptcy of financially troubled business entities. In this process, our tax lawyers advise debtors, creditors committees, banks, financial institutions, insurance companies, equity holders, investors, buyers and sellers. We advise parties on debt modifications, foreclosures, liquidating trusts and partnerships, settlement funds, and tax-efficient plans of reorganization to retain valuable tax attributes, and, in general, strive to align the tax objectives of debtors and creditors in the insolvency and restructuring proceedings.
Insurance and Reinsurance
Our tax lawyers regularly provide tax advice to the insurance and reinsurance department particularly with respect to mergers and acquisitions, captive insurance, excise tax, and other insurance tax issues relating to both companies and insurance products. We work closely with our colleagues in London on tax issues such as exposure to US excise tax on transactions occurring offshore with respect to US risks. We represent both onshore and offshore insurance and reinsurance companies and our tax lawyers have a wealth of technical knowledge and extensive practical experience in advising such companies and representing them in a variety of forums and jurisdictions. The diversity and strength of our tax practice give our insurance company clients access to in-depth experience that covers any federal tax issue that may arise.
Mergers and Acquisitions
Our corporate tax work is integral to the firm’s business law practice and requires that our tax lawyers work closely with business lawyers on the many aspects of tax planning for domestic and foreign corporations, their shareholders and investors. On behalf of our private equity and venture capital practices, as well as our public company clients, we structure tax-deferred and taxable acquisitions and divestitures, especially in the telecommunications, life sciences, media and information technology businesses. We regularly work on leveraged buy-outs and other corporate transactions that require navigating the tax restrictions on the use of debt financing. Although expertise in the complex and technical tax laws in this area is almost a given for any major law firm, we take pride in our ability to apply those laws creatively to obtain optimal results for our clients and to communicate clearly and concisely their impact on our clients and their transactions.
Private Equity and Venture Capital
Our tax lawyers are an integral part of the firm’s preeminent private equity and venture capital practice. Our lawyers have intimate understanding and knowledge of both US and international private equity transaction structures and issues. Our depth of experience enables us to provide practical solutions to novel and critical deal issues on a regular basis. We provide approaches to acquisition structures with a view to successful, tax-efficient and flexible exit transactions. We address not only the concerns of our private equity clients, but also issues involving the management team, particularly, equity rollover transactions. Our transactions increasingly feature the use of pass-through entities such as LLCs either as holding companies or operating companies. Our work in this area not only emphasizes an in-depth knowledge of corporate and LLC structures, but also hybrid structures designed to implement tax-efficient cross-border transactions.
State and Local Tax
State and local tax practice involves a multitude of income, franchise, sales, use, property and other transfer taxes in jurisdictions around the country. Our tax lawyers advise clients on state tax issues when they set up or restructure operations in a state, and sell or acquire a business. Our goal is to design a business plan for each company that minimizes the state and local tax burden. In addition, our tax lawyers represent clients before state tax administrative agencies and in local court proceedings to resolve tax assessment disputes. We also handle trials and appeals in the appropriate judicial forum. We have particular expertise in advising clients, including investment funds, on state and local tax matters in making investments, buying or selling a portfolio company or choosing the most tax-efficient entity for starting a new business. In 2007, one of our partners was appointed by the Governor, Speaker of the House and President of the Senate as a member of the Massachusetts Study Commission on Corporate Taxation, whose recommendations have recently been enacted into law.
- We conducted a 50 state survey of sales and use tax registration and unemployment tax withholding requirements for an online database company.
- We regularly perform sales/use tax nexus analysis for several clients involved in mail order businesses.
- We represented a major multi-national retailer in a tax dispute with the Rhode Island tax authority regarding sales tax refunds on credit card bad debt sales.
- We represented several clients in Massachusetts and New York regarding domicile disputes with the tax authorities.
- We represented a multi-national manufacturer in a dispute with the Rhode Island tax department concerning tax incentives based on levels of Rhode Island employees.
- We represented the portfolio company of a private equity fund in a dispute with the Rhode Island tax authorities concerning consolidated return filing for a parent company with an operating company in Rhode Island.
We are fortunate to include lawyers in our Tax Department that were formerly employed by both the Tax Division of the United States Department of Justice and Chief Counsel’s Office of the Internal Revenue Service. We defend both companies and individuals in tax controversies both before the Internal Revenue Service and various state taxing authorities. Our experienced team has handled numerous controversies both at the administrative level with the IRS and at the trial level and appellate level in both federal courts and state courts. In all instances we seek to obtain the most favorable outcome for our clients either through settlement at the appropriate level or litigation.
Tax Credits and Syndication
The Tax and Benefits Department provides tax and syndication expertise to developers, syndicators and direct investors concerning projects financed with a variety of federal and state tax credits. These projects include affordable housing, historic rehabilitations, motion pictures and projects utilizing new markets tax credits or renewable energy credits. Services range from providing tax and structuring advice and rendering tax opinions to drafting partnership and LLC agreements, fee agreements, guaranties and other syndication documents. We are frequently engaged as “lawyers’ lawyers,” serving as co-counsel with real estate lawyers at some of the nation’s other largest law firms. We regularly work on projects sponsored by nonprofit organizations. Our tax lawyers have obtained several IRS private letter rulings on tax credit matters.
Our low-income housing tax credit experience includes projects for families, mixed-income projects, including large-scale 80-20 projects, projects for the elderly, including congregate care and assisted-living facilities, YMCA’s and other single-room occupancy projects for homeless individuals or individuals with substance abuse problems, projects for tenants with special needs, HOPE VI projects, USDA Rural Development projects, mixed-use projects with residential and commercial components and projects utilizing the Massachusetts low-income housing tax credit.
Representative recent low-income housing tax credit projects have included
- more than 2000 units of mixed income housing in several projects in New York City in which the affordable components have been syndicated separately from the market rate components;
- preservation of a Massachusetts portfolio of five projects containing approximately 700 units;
- transit-oriented development of 180-units of mixed-income housing in Newton, MA;
- an 80-unit HOPE VI project in Akron, Ohio; and
- historic rehabilitation of the former Church School in Ware, Massachusetts as 29 units of housing for elderly and disabled residents also utilizing state low-income housing tax credits.
We have represented developers and investors in the syndication of federal historic credits through master lease-pass-through structures and have provided tax opinions regarding those structures. Recent examples include the rehabilitation of the former Waltham Watch Factory complex in Waltham, MA as office and commercial space and a number of historic buildings in Rhode Island as market rate housing. We have also worked on numerous affordable housing and new markets projects which utilize historic rehabilitation tax credits.
In recent years many states have enacted their own rehabilitation tax credits to encourage the rehabilitation of older buildings. We have represented the syndicators of state tax credits for the rehabilitation of old mill properties in North and South Carolina, the former Charles Street Jail in Boston and affordable housing in Woonsocket, Rhode Island. We served as tax counsel for the development and syndication of a mixed-income assisted living project in Ayer, MA which received the first allocation of Massachusetts historic tax credits (as well as federal historic and low-income housing tax credits).
New Markets Tax Credits
We represent allocatees of these credits, serve as special tax counsel to tax credit investors and also represent the businesses receiving the benefits of NMTC financing, known as QALICB’s. Working with lawyers in our Public Finance Department, we have developed structures for leveraging NMTC’s with tax-exempt Section 501(c)(3) bonds. Representative projects include timberlands throughout the eastern United States, healthcare facilities and commercial buildings.
Film Tax Credits
We have a significant practice representing investors and brokers in state film tax credits. Purchasers of such credits include large multistate corporations as well as individual investors. We have represented investors and brokers purchasing and selling film tax credits in virtually every US jurisdiction allowing such credits including Rhode Island, Massachusetts, Connecticut, New Jersey, Illinois, Pennsylvania and Tennessee. Such transactions may be structured as direct purchases of credits from a film production company or as a subordinated loan to the production company secured by the tax credits resulting from the production.