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Phillips Murrah’s legal team welcomes tax attorney

Jessica Cory

Jessica N. Cory

Phillips Murrah law firm is proud to welcome Jessica N. Cory to our downtown Oklahoma City office.

Phillips Murrah welcomed Jessica to the Firm’s Tax Law Practice Group as an associate attorney.

In her practice, Jessica represents businesses and individuals in a wide range of matters, including general tax planning, business succession planning, and the structuring of complex transactions.

Jessica has advised clients regarding corporate and general business matters, including choice of entity, formation, tax-free reorganizations, acquisitions and dispositions, and tax planning.  She has particular experience working with flow-through entities, including disregarded entities, limited liability companies, partnerships, and S corporations.  Jessica has also successfully represented clients in disputes with the Internal Revenue Service.

Prior to entering private practice, Jessica gained valuable experience service as a judicial clerk for United States District Court Judge Robin Cauthron in the Western District of Oklahoma.  She then received her Masters of Law in Taxation at New York University School of Law and worked for a law firm in Houston, Texas before joining Phillips Murrah.  Jessica is licensed in both Oklahoma and Texas.

Jessica has written and presented on a variety of tax topics, including choice-of-entity in light of the 2017 tax reform, the tax implications of foreign ownership of real property, changes to the partnership audit procedures enacted in 2015, and defending against the trust fund recovery penalty.

Jessica grew up in Killeen, Texas but now lives in Oklahoma City, Oklahoma.  In her free time, she enjoys spending time with friends and family, traveling, and training for her next race.

NewsOK Q&A: Budget act makes auditing partnerships easier, more efficient

From NewsOK / by Paula Burkes
Published: January 19, 2018
Click to see full story – Budget act makes auditing partnerships easier, more efficient

Click to see Erica K. Halley’s attorney profile

Erica K. Halley represents individuals and businesses in a broad range of transactional matters.

Q: What is the Bipartisan Budget Act of 2015 and why should LLCs and other partnerships pay attention?

A: Effective this month, the Bipartisan Budget Act of 2015 changes how the Internal Revenue Service audits and assesses taxes of entities taxed as partnerships, including most limited liability companies. One such change includes replacing the “Tax Matters Partner” with the “Partnership Representative,” which is much more than a mere name modification. In essence, the act makes auditing partnerships easier and more efficient for the IRS, so understanding the weight of designating your Partnership Representative is critical in preparing for your company’s increased exposure to potential audits beginning this year.

Q: What is the difference between the Tax Matters Partner and the Partnership Representative?

A: There are two key differences between the Tax Matters Partner of the past and the Partnership Representative of the present and future. First, the Partnership Representative isn’t necessarily a partner (or member, in the case of an LLC) of the entity. Like a manager of an LLC, a Partnership Representative may be any person the company deems fit to serve in such role, who may or may not be an owner of the company. Second, the Partnership Representative has complete authority to act on behalf of the company when communicating with the IRS. Importantly, and unlike the laws previously in effect, there’s no statutory obligation to notify the partners or members of the existence or status of an audit, much less include them in any decisions that may significantly impact the tax treatment of the company.

Q: What do businesses need to do to prepare for the change?

A: The partners or members of a company will need to agree on the expectations they have for their Partnership Representative and the desired scope of his or her authority. Then, they should amend their company’s governing documents, such as their partnership agreement or operating agreement, accordingly. In addition to providing for the appointment, removal and replacement of the Partnership Representative, they also should consider demanding timely notice to each partner or member of all IRS communications. Other considerations include requiring the Partnership Representative to make certain elections on behalf of the entity, or obligating the Partnership Representative to use his or her best efforts. Companies also may want to add certain indemnification provisions that bind the Partnership Representative to his or her duties with respect to an audit. Finally, and essentially, they must designate their Partnership Representative on their entity’s return each year. As the IRS isn’t bound by any partnership or operating agreement, if a company fails to make the designation on the return, the IRS may select a company’s Partnership Representative for them.

Valuation discounts under threat

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Sept. 14, 2016.


Robert O. O’Bannon is a Director who represents business clients in a variety of transactional matters with an emphasis on taxation and wealth planning issues for both businesses and individuals.

Robert O. O’Bannon is a Director who represents business clients in a variety of transactional matters with an emphasis on taxation and wealth planning issues for both businesses and individuals.

By Phillips Murrah Director Robert O. O’Bannon

The current economic downturn in the oil and gas industry, combined with the low-interest-rate environment and the availability of valuation discounting techniques, creates a number of unique opportunities for tax planning, which include gifting or sale of equity interests in a family business to children or trusts created for their benefit.

However, recently proposed regulations by the U.S. Department of the Treasury to Section 2704 seek to eliminate most forms of valuation discounting for intra-family transfers of businesses. The proposed rules will likely take effect in 2017. Fortunately, the new rules would apply only to transfers that occur after the effective date.

The following are some proposed rules that would affect valuation discounts.

3-year lookback
Proposed Treasury rules would restrict changes in ownership intended to trigger a minority ownership discount, which occurs when a fractional ownership interest is worth less than its proportional share of the enterprise business. New rules would impose a three-year lookback to determine whether a minority valuation discount should apply, which is intended to limit “deathbed transfers” used to create a minority interest.

Restrictions required by law
If state law restricts the ability of a family-owned entity to liquidate, but allows partnership agreements to override the restriction, it will not be considered as “required to be imposed” and cannot be used to reduce the value of an interest for transfer tax purposes. Additionally, if state law restrictions cannot be removed by the family-controlled entity, but state law restrictions are specific to family-controlled entities, it will also be ignored.

Disregarded restrictions
Proposed regulations will create a new classification of restriction that is to be ignored in valuing interest in a family-controlled entity. Valuation discounts will be disregarded that include provisions that restrict the right of each interest holder in a family-controlled entity, whether a family member or not, to liquidate or redeem the interest in cash or other property payable within six months of liquidation or redemption.

These proposed rules are complex, and high-net-worth families who wish to seek valuation discounts may want to consider quick action in light of impending changes to tax law.

Robert O. O’Bannon is a director at Phillips Murrah law firm who represents clients in a variety of matters with an emphasis on taxation and wealth transfer planning issues for businesses and individuals.

Director Sally A. Hasenfratz featured on “The Exit Plan Show”

Recently, Director Sally A. Hasenfratz was featured on The Exit Plan Show, and online interview series hosted by financial adviser, Norman A. Hood.

From http://exitplanshow.tv/:

The Exit Plan Show – We interview America’s top advisors to help business owners enjoy more freedom, grow companies faster and retire on their own terms.

Sally is a member of the firm’s Real Estate, Tax, and Family Wealth and Business Succession Practice Groups. She represents individuals and both privately-held and public companies in a wide range of transactional matters.

See the video below by clicking on the PLAY button. Two more episodes are to be published and will be posted on this website as they are made available.