In White vs. Commissioner, decided on July 3, 2018, the Tax Court, in a memorandum opinion, sustained the Internal Revenue Service’s position that a service provider to an informal partnership should not be treated as a partner. As a result of this determination, the other joint venturer was responsible for the full amount of unpaid taxes resulting from the venture business. Mark Leeds and Guoyu Tao of the New York office of Mayer Brown explore the holding of White and its implications for implementing carried interest provisions in private funds and on management fee waiver transactions.
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